A lease option agreement is sort of a rent-to-own deal. You rent the property from the owner for a fixed period (usually no more than a few years), at the end of which time you have the option to buy the property. Normally, the seller requires some sort of down payment (often less than a typical mortgage lender requires), which should be applied to the purchase price, along with monthly rent equivalent to about 1 percent of the purchase price.
A lease option agreement can be a great way to finance the purchase of an investment property, assuming you’re working with a seller who deals aboveboard, and you have a great plan in place for obtaining cash or alternative financing by the time your option to buy the property rolls around. [click to continue…]
The word bond basically means an IOU. You lend your money to Uncle Sam, to General Electric, to Procter & Gamble, to the city in which you live — to whatever entity issues the bonds — and that entity promises to pay you a certain rate of interest in exchange for borrowing your money. This is very different from stock investing, where you purchase shares in a company, become an alleged partial owner of that company, and then start to pray that the company churns a profit and the CEO doesn’t pocket it all.
Stocks and bonds complement each other like peanut butter and jelly. Bonds are the peanut butter that can keep your jelly from dripping to the floor. They are the life rafts that can keep your portfolio afloat when the investment seas get choppy. Yes, bonds are also very handy as a source of steady income, but, contrary to popular myth, that should not be their major role in most portfolios. [click to continue…]
Benjamin Graham’s arrival on Wall Street in that summer of 1914 was not much more than a chance encounter. There were no telltales that Graham would live in that world for the next four decades, synthesize a dominant theory of value investing, and in the process create a class of thousands of superinvestors like himself.
Among the chief disciples is one-time student and employee Warren Buffett, who graces Graham with the ultimate accolade. Graham has been dead for more than three decades now, but there are still uncanny touches of his style in the discipline that has made Buffett and dozens of other disciples very rich men. [click to continue…]
Amazon Kindle 2, the next generation wireless reading device, has just arrived. With a sleek and thin design that makes Kindle 2 as thin as a typical magazine and lighter than a paperpack, the new Kindle has seven times more storage and now holds over 1,500 books. It has a longer battery life and faster page turns. An advanced display provides even crisper images and clearer text for an improved book-like reading experience. And Kindle 2 even reads to you with new text to Speech feature.
With just over 1/3 inch and 10.2 ounces as well as 25% longer battery life — you will enjoy the convenience of reading what you want, when you want it, the immediacy of getting a book wirelessly delivered in less than 60 seconds, and Kindle’s ability to “disappear” in your hands so you can get lost in the author’s words. There is no monthly wireless bills, data plans, or commitments. Amazon pays for Kindle’s wireless connectivity so you won’t see a monthly wireless bill.
Get your Kindle 2 now!
Helping You Reduce Risk
In their purest forms, hedge funds are about reducing risk. A hedge fund is structured to reduce the risk of the portfolio without sacrificing return. Financial research has shown that investment return is closely related to the risk that an investor takes. In most cases, a hedge fund investor has other investments outside of the fund that carry market risk. The different risk-and-return profile of the hedge fund can offset the risk in the other investments, making the investor, as a whole, better off.
Helping You Weather Market Conditions
Political turmoil, natural disasters, and economic upheaval, for example, all are reflected in the daily machinations of stocks, bonds, currencies, and commodities. Hedge funds are set up to work through this upheaval for two reasons: (1) They have access to a wide array of risk-management techniques that can help limit the effects of market downturns, and (2) They have less oversight and more freedom in their operations, which allows them to move quickly to profit from the wild swings in markets. A hedge fund manager simply makes a trade when the time is right. [click to continue…]
You may not consider yourself to be rich but if you have an estate in excess of $2 million, you certainly need an estate plan. Here are five common mistakes that are made in relation to estate plans, along with simple solutions to avoid them.
Not Having an Estate Plan
It’s a fact -– most people do not have estate plans. They have living trusts and wills — but these are not estate plans. Unfortunately, most people believe that their estate planning process is completed merely with a living trust and a will but nothing could be farther from the truth for wealthy individuals. A living trust helps rid your estate of probate but it doesn’t solve your estate planning needs. Likewise, a will may help in expressing your post-mortem desires but it is not an estate plan.
This is a crucial mistake. For example, John Wayne didn’t have an estate plan, he had a will. Yet 25 years after his death, his estate is not yet settled. Again, trusts and wills are not estate plans. Some people recognize this mistake and take the necessary step of going to an attorney and having an estate plan developed. However, it is only too common that they then fail to actually implement the plans, such as putting their assets in a trust or follow-up on other aspects of the plan. [click to continue…]
Chances are, you have owned a term life insurance policy for years. You probably purchased the policy to provide for a beneficiary after your death. However, for many term life insurance policyholders, the purpose and value of the policy begins to change with each passing year or the policy is about to expire and conversion would be too expensive. A life settlement is the solution that can add flexibility to your estate plan.
A life settlement is a financial transaction in which a life insurance policy owner sells an unwanted or unneeded policy to in institutional investor for a lump sum dollar amount. The institution becomes the new owner and beneficiary of the policy and is responsible for all subsequent premium payments. It gives you cash to use however you like: pursue a dream, travel, help a grandchild with college tuition, etc. [click to continue…]
The early warning signs of financial trouble can be as obvious as a lost job, a layoff, or a huge medical bill, or as secretive as an addiction. In either case, you and your partner (if you have a partner) should remain on the lookout for these warning signs and work together to build a strong financial foundation that can protect you from foreclosure:
Budget
Make sure you have at least as much money coming in as is flowing out each month. If you have a partner, you and your loved one should agree, upfront, on how much to spend and what to spend it on. When partners are off spending money on their own pet luxuries, problems often arise.
Pay Your Bills
When the bills arrive, prioritize them and pay them as soon as possible, so they don’t stack up. If you have a partner, pay your bills together. Blaming your spouse for overspending is easy when you don’t know how much it costs to heat your house or feed your family. You both need to be aware of where the money’s going, so you can hold yourselves, and one another, accountable. [click to continue…]
Although bankruptcy may be that miracle cure you sought for your financial woes, you may encounter some unpleasant side effects. The disadvantages of filing bankruptcy are:
You can lose assets. Depending on how much your home is worth and where you live, it is possible, but unlikely, that you’ll lose it by filing bankruptcy. In most bankruptcies, debtors don’t have to give up any of their belongings, but…
Bankruptcy is a matter of public record. As more and more records are stored on computers and accessible on the Internet, searching that data becomes easier and easier for anyone who’s interested. In other words, if your nosey neighbor wants to know whether you filed bankruptcy, how much you owe, and who you owe it to, the information may be just a few mouse clicks away, [click to continue…]
With the following savings options, the principal is guaranteed (or close to guaranteed), and the rate of return should keep you even with or slightly ahead of the inflation game:
Local Savings Bank
There’s something to be said for keeping at least a small balance at the neighborhood bank. I do. Need a loan someday? It may be easier if you are a regular customer. Local businesses are also more likely to accept a check drawn on a local bank. Then there’s the “bank experience,” which may be especially important if you’re a parent. Each of my two children has a saving account at the corner bank, and they love going there for the free plate of cookies.
At all savings banks in the United States, deposits are insured up to $100,000 by the Federal Deposit Insurance Corporation (FDIC). Even if the bank goes under, you’re covered. The interest rates paid by local banks tend to be very modest, more modest than those paid by most bonds. [click to continue…]