Investing for College Education

Investing for College Education

Which is the best time to start Investing for College Education of your Children? Well the Answer is -

NOW…!!!

Yes, The answer is now. According to my theory, the day you have strike this idea in your mind, you should start investing from that day only for your child’s college education. Now, you will ask me that, but I don’t have children because I am not married yet. Well, please don’t give me excuses.

My Answer will be the Same.

If you are not married than it’s fine. But Than also start investing for college education of your children NOW.

Now, you understand how important starting early is? Even if your children are not born, The Best Time to Start Investing for anything in this world is still NOW. This is because the power of compound interest. The compound interest is so powerful over the time that, it multiplies your money in a breath taking manner. But for that, you have to stay invested for the long time horizon say for example more than 10 years.

Even if you are just married today and don’t have any kids than also it is advisable to start investing for your kids. Because the more early you start, the more compound interest will work on your investments and the more capital you will accumulate for your children for their college education.

In USA, the college education fees are getting higher and higher every year and that’s why it is advisable to start investing small amounts of money early but regularly rather than earning a lot when your child grows and near their college education.

So now you have read and fully understand this article. So now it’s the time to start investing for College Education for your Children.

Investing for Children

Investing for Children

Do you have children? Have you ever planned for the financial future of your children such as College Education, Marriage, Career…etc?

Most of the people in United States never think about the financial future of their children. And when they start thinking about their children’s financial future, It’s too late. Yes, This is true. I receive so many queries from USA like, I want to Invest for my child’s future but don’t get enough time from my job or I want to plan the Investments for my child’s future but what’s the hurry? They are just kids and many other excuses.

But well, according to me all of the above are the excuses and nothing else. Ideally you should start Investing for your Children from the first day they born. Yes, Starting Early is that much early in the game of Investment. There are several Child Insurance & Investment schemes available in the US Market. You can chose any investment scheme from the financial market.

However, the thing is that, You have to TAKE ACTION & START INVESTING EARLY. Starting Early is the only key of the Financial success. This is because those who have started early will accumulate more wealth than those who have started late or never ever invested.

Several people I know from USA have their children in High School but they are so much deep in debt that they simply can’t start investing. So your financial life is directly related to the Investment success. If you are a deep in debt than you will never ever invest for your child’s future.

So first of all, chose the sound financial life. Stay away from debt, spend less than you earn and start investing for children as early as possible means now…!!!

Investing for College Students

Investing for College Students

Are you a college going student? Than let me ask you a question. The Question is – Have you Started Investing? I know that many of you will think that, what a crazy question is this? How can a college going student start investing? After all, the college life is the time to enjoy a life and spend money and still there is a long way to go for retirement (probably at 65) than what is the need of Investing for College Students?

Most of the college students think in this way. They think that Investment is a game of old people. Once you get old or near your retirement, you should start investing. But well, this is a Myth. The Truth is that, you should start investing as early as possible in your life means Now.

Warren Buffest has started investing in the stock market when he was just 13. Today he is 80 and he is world’s second richest person after Bill gates. Starting early is very necessary even if you are in your college life. No matter how small the amount of investment is but you should start investing from your college life.

You can do a part time job in your college life and make some extra money or you can save money from your pocket money and start investing in mutual funds, stocks, bonds, gold, domain names, blogs, web properties or any other asset.

There are several assets available in the market. Rather than adopting a hyper consumer life style in the college life, you should try to understand the importance of investing in your early life. Unfortunately, most of the college students spend their time, money and energy behind unproductive things and when they enter into the real life, suddenly all the college life enjoyment disappears.

And they started thinking that, working hard at the job place and living paycheck to paycheck is the life. What they have lost in the college life is TIME & not the money because the lost money can be recovered but the lost time can never be recovered no matter how much money you have…!!!

Investing for Income

Investing for Income

There are basically 2 ways of Investing.

01) Investing for Capital Gains &

02) Investing for Cashflow (Income)

I prefer the second form of investing – Investing for Income. Most of the people in this world think that, Investment is only a game of money. But well, this is not true. Investment is a game of money and time both. You can also create Income generating asset from the investment of your time only.

Say for Example this Blog. This Blog is the Income generating asset created as a result of Investment of my time only. I have invested 6-8 hours a day since last 2 years behind this blog and today this blog provides passive income for me without much effort.

You can also invest your money and acquire the income producing assets such as Dividend Stocks, Mutual Funds, Rental Properties, Businesses…etc..

Why Smart people Invest for Income?

Well, This is because Investing for Income (Cashflow) means you are investing in those assets which provide you a steady cashflow. If you invest for the cashflow than you don’t have to worry about the daily ups and downs of that asset class.

Say for example, if you have invested in Dividend paying stocks than you don’t have to worry about the daily price fluctuations of that stock because even if the price of that stock goes down, you will still make a good income in the form of Dividends.

Another Example is – This Blog. I don’t have to worry about the daily ups and downs of the valuation of this Blog. This is because as long as I receive a cashflow from this web property every month, I don’t need to worry about its valuation.

And that’s why Rich people invest for the Cashflow.

Cashflow Versus Capital Gains Strategy -

Both the Investment strategies have their own pros & cons. Nothing is better than the other. If you invest for Capital Gains than the main advantage is the tax advantage. Unless you sell your assets, you will not have to pay any tax. This is really good.

But at the same time the main disadvantage of investing for capital gains is that, for the most of the time of your life, you won’t be able to enjoy this money because most if the time of your life, it will remain on paper only unless you sell whole of that asset.

While this is not a case of Cashflow Investing. Here you Invest for Income so you can enjoy that money for the whole of your life (However, you will have to pay on your realized Income).

I Personally like Investing for Income (Cashflow). This Blog is my Cashflow Investment and creating this blog my life changing financial decision because that day (March 2008), I chose investing for the Cashflow rather than the Capital Gains…!!!

Investing for Retirement

Investing for Retirement

Many people in their thirties think that What is the hurry of investing? There is till a long way to go for the retirement. But well, this is Myth. The truth is that, ideally you should start investing for retirement from the first day of your active earning life means probably from your twenties. Yes, ideally you should start investing for retirement from the day you get your first job.

Start Investing Early is the key of peaceful retirement. This is because the earlier you start, the compound interest will work more in favour of your investments to grow them large over the time. If someone has invested for 15 years for his retirement and the some other persons has invested for 20 years for his retirement than the second person will have much more retirement corpus than the first person.

The only 5 years of difference in starting investment can make a huge difference in the wealth later on. And that’s why when people ask me that, What is your advise about Retirement Planning? I say them that – Start Early.

Because this is the 90% advise that anyone needs to become financially Independent on retirement. And those who have started investing very early in their life have accumulated so much corpus in their early life that, they managed to retire in their forties and early fifties.

My another concern about Investing for retirement is that, most of the people think that investing for retirement means invest in the 401(k) plan and than wait and watch until your retirement to see weather the money has grown in your 401(k) plan or not? But well, believe me, The 401(k) Plan and the Social Security Plans are not sufficient enough to become financially independent after your retirement.

You will have to invest somewhere else rather than these plans for a financially peaceful retirement say for example in your own Business, Mutual Funds, Dividend Stocks, Rental properties…etc.. Investing only in 401(k) plan and Social Security scheme doesn’t guarantee any kind of financial peace after retirement.

So keep in mind these few key concerns about investing for retirement and plan your retirement accordingly.

Investing for Kids

Investing for Kids

This article is not for the parents who want to invest for their kids. This article is for kids who want to learn the game of investing. “Investing for Kids” means Investment exercises for Kids for the purpose of this article.

Ok so are you a School or High School Going Kid & want to learn how to invest money? Than this article is for you. Let me tell you honestly that when I was a Kid and I used to say my parents that, I want to learn how to invest money, they used to say me that, Investment is not a game of kids because it’s risky. Once you grow mature, you learn what is investing and start investing.

But well, this was a Myth. The only problem of following my parents’ advise is that, you will be very late by then and Investment is a game of money & time both. And the winning formula of successful investing is - “Start Early”. Warren Buffet has started investing in the stock market when he was just 13 years old and today at the age of 80 years he is the second richest person of the world.

Here are the various ways by which Kids can invest money -

01) Stocks & Mutual Funds: Kids and teens under the age of eighteen cannot acquire most investments directly. They can, however, own them through a UGMA account or some other type of trust.

But yes, it is possible to invest in the stock market and mutual funds via UGMA account if you are a kid. Simply subscribe some finance blog and start learning about stock market investing.

02) Domain Names – Yes, Domain Names. I know that your parents will surprise if you tell them that you are investing in Domain Names. But believe me, Domain Names are the real estate of the Internet and they are the most valuable properties on the Internet. The Domain name Loan.com was sold for whooping US $ 3.1 Million in 2001. So you can imagine that how profitable this asset class is.

Simply go to GoDaddy.com and buy a Domain name for you. It costs just US $ 10

03) Invest in Web Properties (Blogs, Websites, Forums) – Flippa.com & SitePoint.com are the Internet marketplaces for web properties. Here you will find a web property for sale starting from as low as $ 100. Web Properties are the Information age Investments which give much higher return than the traditional offline assets such as stocks, bonds, gold and real estate.

04) Invest in Collectible Items – Yes, Collectible items are also the form of Assets such as Stamps, Coins, Coke Crowns, Vintage Cokes, Vintage Toys, Clocks, Knives, Insects & many other collectible items.

Thus, you can start investing in any one or more of the above assets. Most of the people around the world believe that only stocks, bonds, gold, real estate and mutual funds are the assets to invest but it is not true. All of the above assets can be the great investments for Kids & Teens.

Investing for Deflation

Investing for Deflation

As all of you know that, US Economy may slip into the Deflation. However, the Fed has printed almost $ 1.2 Trillion and pushed it into the economy so the chances are very likely that, we will experience the Hyperinflation rather than the Deflation because the newly printed will dilute the purchasing power of the existing money in the circulation which will cause hyperinflation.

Now, what it means by Deflation? Well, it’s exactly the reverse of Inflation (Hyperinflation). Means here the purchasing power of money increases over the time. This means that goods, services & Assets in the economy become cheaper and cheaper day by day. Initially it looks cool but this is not good for economy & businesses in the long run because the businesses will post the low earnings on the wall street and their share prices will go down and thus the erosion of wealth.

Now, What to do as an Investor during the time of Deflation?

Well, it’s very simple. Here are two ways for Investing for Deflation -

01) According to Financial Experts, “It is always advisable to become a lender (Debt/Bond Holder) rather than a Borrower during the time of Deflation.”

It means that during the time of deflation, you should invest in the debt funds, bonds and any other kind of debt instruments. Because during the time of deflation, your money becomes more valuable day by day (Exactly reverse of the Inflation). So it is not advisable to borrow money but to lend money.

02) Cash is the Best Investment during Deflation – Well, This is because during the time of deflation, your money becomes an Asset. Otherwise, money is not an Asset because the inflation erodes its purchasing power over the time. But during the time of deflation, the value of your money increases day by day because the goods and services in the economy become cheaper and cheaper. Thus, Money (Cash) is the best asset during the time of deflation. So Invest in Cash during the time of Deflation.

So follow the above 2 basic principles of Investing for Deflation and you will always win during the time of deflation.