Investing for Dividends

Investing for Dividends

Investing for Dividends is known as Investing for cashflow. Here you invest in the stock market for cashflow rather than the capital gains. Most of the people lose money in the stock market because they invest for the capital gains while smart investors are those who invest for the cashflow.

In fact, there are several people around the world who have worked hard for 10 years day and night and build the portfolio of Dividend paying stocks and today they are enjoying their early retirement while travelling the world.

The main advantage of dividend income is that, it is a tax free income. Because the company has to pay Dividend Distribution Tax (DDT) which is very low in comparison with Income tax. Thus, building your own Dividend paying stocks portfolio is a wise financial decision if you want to retire early.

Now, the only key of building the successful Dividend Portfolio is – Start Early.

Yes, This is the 95% advise that anyone needs. You will find a list of dividend paying stocks on any website on the internet but to make it a winning portfolio on which you can live for the rest of your life, you need to Start Early because than and only the compound interest will work on your portfolio more to make you rich.

If you want to retire early or retire with financial freedom than Investing for Dividend is a sound financial strategy. Rather than investing for only capital gains, you should go for this way. This is because in this strategy, even if the stock prices fluctuates, you will still receive a Dividend Income from your Investment which you don’t receive if you invest only in Growth Stocks only for Capital Gains.

So Invest for the Cashflow (Dividends) Stocks and enjoy the steady passive income.

Investing for Dummies

Investing for Dummies

Investing for Dummies is a great book series in the USA. You can find whole the series of books on Amazon Book store. The Author Eric Tyson covers all the aspects of investing in very simple and easy to understand language for us. If you are totally news to the Investing than I strongly recommend you to buy these books.

 

About Eric Tyson - (EricTyson.com)

Eric Tyson is a best-selling personal finance book author and has penned five national best sellers. He is also the only author to have four of his books simultaneously on Business Week's business book bestseller list.
His Personal Finance for Dummies, a Wall Street Journal best-seller, won the Benjamin Franklin Award for Best Business Book of the Year. His book, Let's Get Real About Money, is an action oriented guide to developing and practicing the best financial habits and strategies. Eric's syndicated newspaper column is read by millions of readers weekly. He is a former columnist and award-winning journalist for the Sunday San Francisco Chronicle.

Eric's work has been featured and quoted in hundreds of local and national publications and media outlets including Newsweek, The Wall Street Journal, Los Angeles Times, Chicago Tribune, Forbes, Kiplinger's Personal Finance Magazine, Money, Worth, Parenting, USA Today and on the NBC Today Show, ABC, Fox News, CNBC, PBS Nightly Business Report, CNN, and on CBS national radio, NPR's Marketplace Money and Bloomberg Business Radio. He's also been a featured speaker at a White House conference on retirement planning.
Tired of working as a management consultant to Fortune 500 financial service firms which more interested in maximizing short-term profits than in providing sound financial products and services, Eric founded in 1990 the nation's first financial counseling firm which works exclusively on an hourly basis. He started his new company with a simple mission: to provide objective, cost-effective personal financial advice, especially to non-wealthy Americans. Through family and friends, Eric had seen many otherwise intelligent people make horrendous mistakes in managing their money, in part, because the failure of our schools and colleges to teach personal finance.

Bond Investing for Dummies

Index Investing for Dummies

Mutual Funds for Dummies

Personal Finance for Dummies

Thus, all of the above are the great Investing for dummies series of Books. All of them are packed with tons of Personal Finance & Investment Advises. Buying all of these books is worth it.

Investing for Beginners

Investing for Beginners

Are You a Beginner & have you never heard anything about the Investment? Than This Article is for you. After reading this article, you will understand that why and how you should Invest? I will explain you in very simple language in this article that why & how you should invest?

What is Investment & Why You should Invest Your Money?

Well, the first very basic question comes is Why anyone should invest his money? Well, first of all let us understand what is investment and how it works? Well, see. In very simple words,

Investment means making your money work for you rather than you work hard for money.

Yes, Investment is the science and art of making money out of money. Every morning, you wake up and run to your job place, do the job or provide some kind of professional service in the economy (Doctors, Lawyers, Actors, Artists, Freelance writers). This is because you have the potential to make money in the economy and that’s why you do this.

But do you know that your money has the same potential as you to make more money? When you will realize and understand this fact, you are on the path of Financial Freedom & Becoming rich. Believe me, Your money has the same potential as you to go in the economy, work harder than you and earn more money. But to make money from money, you will have to make it work harder for you. And this process of making money work harder for you to make more money is known as Investment.

Rich people know this fact since their very early life and that’s why they have started focusing on making their money work for them since their early twenties or even before that. Warren Buffet had started investing when he was just 13.

So Now, you understand that, why you should Invest? Well, because you want to become rich, financially free and enjoy your life. This is because you don’t want to work for the rest of your life living paychecks to paychecks and dying with a huge debt and unpaid bills leaving behind you.

How to Invest Money? – Where to Invest Money? -

Now, the second obvious question comes is, How to invest money? Where rich people invest their money to get more richer? Well, Rich people Invest their money in Assets. Now, let us understand what is Asset?

Well, Asset Is something which puts money into your pocket by providing Capital Gains or Cashflow

Anything in this world which can fulfill the above criterias is the Asset. This Blog is an Asset because every month it generates money for me and put that cashflow in my pocket. So this Blog is my Asset. Here are the Examples of Assets.

Stocks, Bonds, Gold, Silver, Precious Metals, Oil, Real Estate, Mutual Funds, Art, Vintage Cars, Web Properties, Websites, Blogs, Domain names, Intellectual Properties, Movies, Music, Collectible Items, Sports Teams, Vintage Guitars are the few examples of Asset. However, anything can be your Asset and you can invest in it.

So buying any one or more assets from the above list out of your money is known as the Investment. Warren Buffet is the Stock Investor, Jim Rogers is the Commodity Investor, George Bush is the Crude Oil Trader & the Investor…etc…

Investment is a game of Money & Time Both -

Most of the people in this world have a false belief that, Investment is a game of Money. Well, this is the partial truth. The full truth is that, Investment is the game of money & Time both. You can only invest your time and still make money.

Say for Example, Take the Example of this Blog. This Blog is my Investment of Time only. I have not invested a single penny behind this blog to start it. I have only invested 6-8 hours a day behind this blog and today This Blog is my most valuable Asset.

Bill Gates has invested over 10,000 hours of his time to develop the world best OS (Operating System) Windows and after that Investors & Venture Capitalists have invested their money in Microsoft Corporation and Bill Gates has become the richest man in the world.

Thus, you can invest both your money and time and make a fortune. So What are you waiting for? Start Investing Now. You are not the Beginner now. Now you know that, what is investment, why you should invest and where to invest your money?…

Investing in Silver

Investing in Silver

Silver is a precious metal and has been regarded as a form of money just like gold and store of value. However, since the end of the silver standard, silver has lost its role as legal tender in the United States.

In 1971, the President Nixon has removed the gold standard and the silver standard and after that the US Dollar is just the tender. Modern Money is backed by the full faith of the governments around the world but does not have any intrinsic value in it.

China is the largest consumer of Silver since several centuries. However, recently China has started motivating their citizens to invest in silver. This may be because of the money printing activity of the US Government. Recently, the federal reserve has increased it’s monetary base from $ 800 Billion to $ 2 Trillion. In other words, the US Government has printed almost $ 1.2 Trillion out of thin air only.

And there is a potential danger that this will dilute the purchasing power of the existing money in the circulation. China is the largest holder of UD Treasury Securities. This means that China will be affected the most in terms of purchasing power because of the money printing activities of the US Government.

And that’s why the Chinese Government has started motivating their citizens to start investing in Silver.

US $ 5 Silver Certificate

American Silver Eagle Bullion Coin

How to Invest in Silver? -

There are various forms in which you can store the silver. Here are the various methods of  investing in Silver.

- Bars
- Coins
- Rounds
- Exchange Traded Funds
- Certificates
- Accounts
- Derivatives
- Mining Companies
- Spread Betting

You can invest in silver from the any of the above ways. According to many global investors, right now the silver price is undervalued and it will go high further and thus it’s the best time to buy silver at low price. Because you will never find silver at such low price.

Investing in the Stock Market

Investing in the Stock Market

It really surprises me when people say that they are afraid of investing in the stock market. They argue that, I prefer to invest safe and that’s why I invest in the bank fixed deposits, bonds and debt instruments. Because I want to play it safe.

But well, let me tell you that, the Bank Savings Accounts, CDs & Fixed Deposits are also not the 100% safe because here also the risk of inflation eroding the purchasing power of your money over the time. The main problem is that, people can’t see the inflation and that’s why they assume that it doesn’t exists. But the thing that you can’t see doesn’t means that it doesn’t exists.

Inflation & Tax both are the silent killers of your money. Both of them will slowly erode the purchasing power of your money but Stock market Investments don’t attract any long term capital gains tax if hold for more than 1 year period as well as they beat the inflation very well in the long run.

In the United States, the inflation is 2-3% per Annum and the Stock market returns in the past 20 years is 11% annually on and average & that is 8-9% actual annual return from the stock market in the long run. Now, this is amazing. No other Asset class in the USA has given this much return in the long run after beating the inflation.

And that’s why I advise people to invest in the stock market. Now, by investing in the stock market doesn’t mean trading in the stock. Investment means pure long term investments based on the fundamentals of the companies.

Mutual Funds Versus Direct Stock Investing -

In the United States, most of the people don’t have any time to manage their own investments and that’s why the concept of mutual funds came into exists. Mutual Funds pool the money from several small investors like you and me and collect the large amount of capital. It has it’s own fund manager and the team of research analysts.

The Fund manager invest your money on behalf of you and make a portfolio for you. However, the Index mutual funds have given much more return than the actively managed funds in the long run because the index mutual funds are associated with very low fund management charges.

Vanguard Index Mutual funds are the best long term investment vehicles in the USA.

The earlier you start investing in the stock market, the more compound interest will work in your favour and make you rich over the time. And that’s why i advise people to start investing in the stock market as early as possible means NOW.

Remember,

The Best Time of Investing in the Stock Market was 20 years Before &
The Second Best Time is NOW…So Start investing in the Stock Market NOW…!!!

Investing in Real Estate

Investing in Real Estate

Real Estate is the best asset class if you want to generate money from both the Cashflow & Capital Gains. I am talking about Rental Properties. Since past 2 decades, the Real Estate in USA & parts from all around the world has been appreciated a lot. However, since 2007, because of the Sub Prime Mortgage Crisis in USA, the Housing Bubble has burst and the real estate prices all around the USA has come down drastically.

Now, many people are afraid of investing in the real estate. This is because previously people used to think the prices of the real estate goes only in one direction and that is up. But it’s not the true. Today those investors, who had invested in the real estate for the Cashflow are much better position than those who had invested for merely capital gains.

And That’s why I advise people to invest for the Cashflow rather than Capital Gains. You should always calculate the ROI (Return on Investment) before doing the real estate investment. And if the Cashflow is negative you should not buy that real estate. You should only invest in the real estate if it gives you the positive cashflow.

If you want to become a real estate Investor than I can suggest you a great course.

Real Estate Cashflow – Apartment Building Cashflow

You will find lots of real estate investment strategies in the above course. You will become master in real estate investing after you learn this course.

REMFs & REITs -

Now, not the everyone can afford to invest $ 100,000 to buy their own rental property. And here the concept of Real Estate Mutual Funds (REMFs) & REITs (Real Estate Investment Trusts) comes. They are just like the regular equity mutual funds means they pool the money from large number of small investors like you and me and after that they invest in various real estate, infrastructure and rental properties projects. Their main objective is to generate rental income and distribute among the Investors.

Thus, now if you have just $ 1000 in your pocket than also you can invest in Real Estate via REMFs & REITs.

Right now in USA, the prime location properties are in the process of foreclosures and this is the opportunity to invest in the real estate at bargain price for me. So take the advantage of foreclosures around you and spot the great property for you.

Investing in Bonds

Investing in Bonds

Bonds constitute the major part of anyone’s portfolio. The World’s Bond Market is worth of Trillions of Dollars which is much more than the Equity market of the world. As of 2009, the size of the worldwide bond market (total debt outstanding) is an estimated $82.2 trillion, of which the size of the outstanding U.S. bond market debt was $31.2 trillion according to BIS.

So you can imagine that How big the Bond Market is?

What Are Bonds & How they Work?

Let us understand the Bonds in simple language. Well, whenever a Corporation (Private Entity) or the Government wants to borrow money to expand its various projects or fuel its growth, it issues the Bonds also known as Debt Paper. Now, the Individuals, Investors, Other Corporations & The Governments from all around the world buy these bonds and finance the bond issuer.

Say for Example if you buy $ 100 Bond of J P Morgan than it means that you are lending $ 100 to J P Morgan. Suppose if you buy $ 10,000 worth of US Treasury Bonds than it means that the US Government is borrowing $ 10,000 from you.

Bond Ratings -

Corporate Bonds are rated from AAA to CCC Grades according to its credit worthiness. High Quality Bonds are graded as AAA while poorest quality bonds are traded as CCC. However, AAA Rated bonds give you the lowest yield while the CCC rated bonds will give you the highest yield.

Theoretically, the world has assumed that the US Treasury Bonds can never ever default. Because the Government of USA can never default in it’s payments and that’s why the US Treasury Bonds are the safest bonds in the world and that’s why they are the lowest yield bonds in the world.

Bond Mutual Funds -

There are so many Bonds available in the market that, choosing the best bonds itself is a job.  And that’s why the concept of mutual funds came into exists. Here the fund manager of the mutual fund invest in bonds on behalf of you.

Bond Allocation in Portfolio -

Any Portfolio should have 2 Basic Components – Equity & Debt (Bonds). Now, Bond Allocation in any portfolio should be based on the age of the investor. If you are near your retirement than you should allocate more money in Bonds and less in the Equity and if your age is young and the retirement is away, you should invest more in equity and less in bonds.

So Start Investing in Bonds because any portfolio is not the portfolio without Equity & Debt Components.