Archive for August, 2009

Investment in the financial markets, if done in a knowledgeable manner, can yield lucrative levels of return. Such informed investment-making decisions, are not, however, very easy to take. Financial planners, with their professional expertise can help beginners in choosing proper investment policies. Some of the most important tips that financial advisors provide to newbies regarding investment are:

a) At the outset, one needs to realize that there are no set patterns or rules for investment. Investment decisions depend on the circumstances, market conditions and can also change with the risk-tolerance levels of investors,

b) The exact working procedure of investment procedures needs to be properly understood before an individual can take investing decisions. All details of investment transactions should be well-understood too,

c) Investment targets and desired rates of return need to be laid down at the start itself. This facilitates easy formulation of investment policies, including the amount of money to be invested.

Once the above tips are followed properly, a new investor needs to follow the following broad principles (as advised by most financial planners):

a) Stock Values are more important than Stock Prices à While low-priced stocks are attractive, one needs to examine the cause of the low price levels of any stock. Indeed, in a bullish market, the perpetual low prices of a stock might indicate that the company that is making financial losses,

b) Consider the Return On Net Worth à Return on net worth is obtained by dividing after-tax profits by the net worth. Rising levels of return on net worth of a stock make it a suitable channel of investment,

c) Risk-diversification à In order to avoid huge losses at any time, one needs to hold a mix of low, medium and high-risk stocks. This diversification of risk helps in protecting the invested amounts,

d) Stock-price Analysis à one needs to understand the mechanism via which stock prices are determined. Future market expectations and projections regarding market conditions play a large part in determining stock prices,

e) Tax-paying companies à an investor has to understand the financial health of a company before (s) he invests in its stocks. A company that pays high tax levels generally has high levels of profit, and is of sound financial health, compared to those that pay little, or no, taxes. Hence, one should invest in stocks of high tax-paying companies,

f) Analysis of the Free Cash Flow à The reported profits of any company can be divided in two parts: Cash actually flowing in the company and alterations in the profit and loss account of a company (via an increase in the number of debtors). While investing, investors should prefer stocks of companies that have greater portions of profits going back in its own reserves,

g) Optimization à Often, beginners make the mistake of trying to maximize returns by investing in excessively high-risk stocks. This is uncalled for, and one needs to try to optimize one’s return, by holding a mix of different types of stocks,

h) Future prospects of a company à While past performance of a company is extremely important in determining the value of its stocks, what is even more important is its future prospects. The prices of stocks are, more often than not, determined by the future prospects of the company. Such prospects, hence, should be considered more important than past records,

i) Investing in equities over time à In order to obtain the best return from equities, one should avoid investing the whole amount at one time. Investments in equities should be done at different suitable times and market conditions.

These tips regarding investment, as suggested by professional financial planners and advisors, should help beginners understand the basics of investment and then, to optimize their expected rates of return.

Like many first home buyers you are probably wondering about the First home owners grant for investing in real estate. Am I eligible and how much will I get? Due to the current financial crisis there have been some changes to the grant for investing in real estate that are very beneficial for anyone who is thinking of making their first real estate investment. In fact the government has just doubled the grant for investing in real estate. The $7,000 grant has risen to $14,000 whilst the $14,000 grant has been increased to $21,000. Let’s have a look at the different types of grants for investing in real estate and the history of the first home owners grant and real estate investing.

The Grant for investing in real estate (first home owners grant/scheme) was first introduced in 2000 in an attempt to help first home buyers make their first real estate investments or buy their first home. In reality the grant simply offset the taxes that home buyers need to pay when buying a property. In its original form the grant for investing in real estate was set at $7,000 – how things have changed of late.

How Much Will I Get?

Currently all first home buyers who are purchasing an already existing property will be entitled to a grant of $14,000. If you are purchasing a newly built home or build your own property you will be entitled to $21,000. For the first time in the history of the first home owners grant the new home owners may be able to use some of the grant money to pay for their property rather than just use it to pay for the taxes.

Am I Eligible?

The eligibility criteria of the grant for investing in real estate is pretty straight forward. You (and your partner) must not have received an Australian home buyer’s grant before. You (and your partner) must not have owned residential property prior to 1st of July 2000 in Australia. You (at least one person) must be an Australian citizen. You must be a real person eg. Not a company. Finally you (at least one person) must occupy the house for a minimum of 6 months commencing within the first 12 months of purchase.

This last criterion is the most important if you are thinking about claiming the grant for investing in real estate for an investment property. This definitely doesn’t mean that you can’t get it you just need to be smart about it. Many property investment courses say you can’t use it for an investment property but this is simply not true. One of the best property investment tips I ever received was to use the first home owners grant for an investment property that needed some small renovations. I went to a property investment course that taught me about the best ways to renovate for capital gains and then used the grant for investing in real estate to pay my mortgage for 6 months whilst I renovated the property. It was the perfect way (and still is) to get into the investing property world.

Self-Investment

Normally, people think of investing in terms of stocks or bonds, real estate, or some other type of property. But the biggest and most rewarding kind of investment is self-investment, purchasing things which build mental power and proficiency.

The progressive business knows that how strong it will be five years from now depends not on what it does five years in the future but rather on what it does, invests, this year. Profit comes from only one source: investment.

There’s a lesson for every one of us. To profit, to get the extra reward above a “normal” income in the years ahead, we must invest in ourselves. We must invest to achieve our goals.

1. Investment in education. The education is the soundest investment which you can make in yourself. But let’s understand what education really is. Some people measure education by the number of years spent in school or the number of diplomas, degrees and certificates earned. But this quantitative approach to education doesn’t necessarily produce a successful person. Ralph J. Cordiner, Chairman of General Electric, expressed the attitude of top business management toward education this way: “Two of our most outstanding presidents, Mr. Wilson and Mr. Coffin, never had an opportunity to attend college. Although some of our present officers have doctor’s degrees, 12 out of 41 have no college degrees. We are interested in competency, not diplomas.” A diploma or degree may help you get a job but it will not guarantee your progress on the job. “Business is interested in competency, not diplomas.”

To many other people, education means the quantity of information a person has stashed away in his brain. But the soak-up-facts method of education won’t get you where you want to go. More and more we depend on books, files, and machines to warehouse information. If we can only do what a machine can do, we are in a real fix.

Real education, the kind worth investing in, is that which develops and cultivates your mind. How well-educated a person is, is measured by how well his mind is developed-in brief, by how well he thinks.

Anything which improves thinking ability is education. And you can obtain education in many ways. But the most efficient sources of education for most people are nearby colleges and universities. Education is their business.

Many people earn degrees these days in evening programs, but the degree, which in the final analysis is only a piece of paper, is not their primary motivation. There are going to school to build their minds, which is a sure way to invest in a better future.

And make no mistake about this. Education is a real bargain. An investment of only few thousands will keep you in school one night each week for a full year. Compute the cost as a per cent of your gross income and then ask yourself, “Isn’t my future worth this small investment?”

2. Invest in idea starters. Education helps you mold your mind, stretch it, train it to meet new situations and solve problems. Idea starters serve a related purpose. They feed your mind, give you constructive material to think about.

Where are the best sources of idea starters? There are many, but to get a steady supply of high-quality idea material, why not do this: resolve to purchase at least one stimulating book each month and subscribe to two magazines or journals which stress ideas. For only a minor sum and a minimum of time, you can be tuned in to some of the best thinkers available anywhere.

At a luncheon one day I overheard one colleague of mine say, “It costs Rs. 1,000 a year. I can’t afford to take the Readers Digest, India Today, Business World.” His friend, obviously a much more success-minded person, said, “Well, I’ve found that I can’t afford not to take it.”

Again, take your cue from the successful people. INVEST IN YOURSELF.

Invest in yourself. Purchase those things that build mental power and efficiency. Invest in education. Invest in idea starters.

The said article has been written by Iyer Subramanian. He works with Bombay Chamber of Commerce and Industry as Joint Director-HR. He can be contacted through mail: iyerpdkgnm@yahoo.com

Real estate investments are very popular these days. Whether you make commercial property investment or residential property investment, you can pave the way for impressive earnings. However, real estate investing is one option, which requires considerable amount of knowledge about all its aspects and this is where real estate investment firms enter the scene. These firms lend helping hands in making you financially independent and let you relax about your post-retirement years.

If it is your fist attempt to earn monetary benefits from investments in real estate, here are few reasons why you should approach one of the real estate investment firms.

Evaluation Of Various Investment Plans

The market of real estate investing is flooded with a number of plans like commercial real estate investments and equity real state investment plans. However, you should have the talent to choose most rewarding plan out of these. A real estate investment firm can help you to evaluate various investment plans in this category, so that you can witness your money growing at a dependable rate. These real estate investment firms have huge networks of real estate professionals and investment experts and thus, they can provide you with profit-bearing investment products.

Saving Your Time And Efforts

Real estate investing certainly requires an individual to spend time and efforts to achieve desirable success as an investor in this market. If you are in a regular job or an active social being, it might be difficult for you to reserve time in this direction. But, you can always take advantage of real estate investment firms to devote time and efforts on your behalf.

An Array of Beneficial Services

The real estate investment firms offer a wide spectrum of services to its clients. For instance, portfolio diversification, debt analysis, tax related issues and due diligence are some of the issues handled proficiently by these firms. You can seek advice from these firms on any aspect of real estate investing at any point of time.

Thus, you can begin your journey towards successful real estate investing with the help of these dedicated investment cradles.

While searching for a good investment firm, you might come across a number of options. However, a search under the lens can help you to figure out, which option is better for you. Concrete Equities is a good suggestion, as the firm is positively reviewed by its clients and market spectators.

It can be more than said that in the year 2009 that “Global Tax Planning” brings with a host and hosts of new, newer and newest concepts and procedures that may well be new or not even known by yourself , your family , banking , business advisers and even the most savvy of your knowledgeable friends and financial business acquaintances.

It can be well said that when selecting and using “tax havens” , as well as implementing global tax saving strategies you will require initial , workup information. Among these are basic , relevant information regarding global investing, private accounts , transferring funds, mail and email forwarding, secret safekeeping, computer privacy procedures as well as methods , personal privacy , counter intelligence as well as information sources.

One may well ask “Why Take the Global Approach to Investing and Investments ?” The answer to begin with , is that investing “offshore” will give you what might be called a “Launching Pad or Pads” to obtain direct access to a wrath of a vast quantities and availabilities to many investments and investment opportunities that are simply not available or available to North Americans – be they American , Canadian or other Nafta resident residents and investors. This alone is one , or more than one major reason why you may well want to create and utilize a foreign entity for investing globally. It can be more than said that investments made through your offshore investment account and accounts may be held in stable , and even rapidly appreciating and growing currencies such as Swiss Francs. British Pounds Sterling and Euro currency holdings.

It is conservatively estimated , that in 2008, over 61 % of the world’s investment opportunities in stocks , bonds as well as other investment opportunities and vehicles are found outside the North American boundaries . Thus a whole new world of investment opportunities affords the voracious investor. One only has to read the newspaper , financial source materials as well as on line financial authorities to come to the realization that many offshore economies are growing more rapidly than what were once the “established” or what were considered the base or basic industrial economies. Investing globally will provide you , your family and friends as well as financial acquaintances an opportunity and opportunities to invest in the high and higher growth regions of the world. All told you will be left with a vastly greater range of investment opportunities. All the while , while reducing your risk and risks through diversification of assets over a range of various countries – whose investment and investment opportunities not only were unavailable to you if not downright hidden from view as well as growth opportunities.

It can be well said , if not emphasized greatly , that with the wrath of modern communications avail be to the average person and investor – be they the technologies of the INTERNET and computerization , communication devices such as fax machines , world travel , and even modern day post , that the globe has not only become a smaller place but a much larger realm in terms of investment opportunities and global investment opportunities that abound to to the average person as well as modern investor in the calendar year of 2009. Happy , safe and private global investing.