Archive for the ‘Personal Investment’ Category
Sunday, April 24th, 2011
Three Ways To Maximise Your Roi When Purchasing Investment Property Part 2
Property Investment is growing in importance today in the global investment arena as more and more developing economies open up giving us the chance to make vast capital gains offshore. This article deals with how to buy property at a bargain so as to boost your ROI and continues from the previous article in our three part article series on how to maximise your ROI when purchasing investment property.
Most people, know the stock market adage, buy low sell high and attempt to apply it to many areas of their life. Most do not know the science of analyzing and quantifying this increase in prices and the real estate arena is no different. The best way to increase your ROI is to purchase a property when it is undervalued thus adopting Benjamin Grahams value investing model. Spend some time looking at the class of property that you wish to acquire and then focus on looking for a bargain.
Once you know what class of investment property you are in, spend some time looking at the statistical data. The more savvy investors would then perform technical analysis on the real estate purchasing and rental data to generate a graph. Note that there is no need to do this yourself and most real estate brokers that have investment property divisions, can generate the graphs for you. Spend some time asking why the rental is increasing and ascertain the risk factors to the rental market for your particular class of investment property.
The whole purpose of this mathematical analysis before you actually go down and fall in love with the property is to adopt a dissociated mindset and be a real estate fund manager mindset. This allows you to screen out loss making properties before you even get pressured by the real estate agents or potential sellers to purchase or take a look at their properties. Thus you should imagine your role is as one of acquiring property investment bargains which meet your mathematical investment criteria and which pass your physical inspection.
In conclusion, property investing like most other forms of investment, the money is made when buying the property. Spend some time figuring out what your property investment objectives are and focus on achieving them. This is a three part series and we will continue in the next article on buying a property in a hot rental area and boosting your property investment ROI.
Tags: Acquiring Property, Adage, Article Series, Capital Gains, Developing Economies, Estate Arena, Global Investment, Grahams, Investment Arena, Investment Property, Mathematical Analysis, Mindset, Property Investment, Real Estate Agents, Real Estate Brokers, Risk Factors, Savvy Investors, Statistical Data, Stock Market, Three Ways
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Saturday, April 16th, 2011
Systematic investment plan, as the very name suggests, refers to the time-tested strategy of buying and selling stocks at a pretty lower estimation. Unlike other investment plans systematic investment plans are quite risk free in nature.
It helps to create wealth in a regimented manner over a longer period of time. Many investors compare it with a wonder drug that cures all your investment related injuries. The winds of change have already set in with more and more people getting interested in opting for systematic investment plan. Systematic investment plan helps your money grow at a much faster rate without much trouble.
This very fact has been attested by the recent media reports. The reports suggested that the systematic investment plans are a great way to save money over a longer period of time. The minimum amount that can be invested is low compared to other investment options. The frequency of investment is usually monthly or quarterly. The systematic investment plan resembles a recurring deposit where you put small amount every month, which is automatically deducted, from your salary cheque. The only difference is that the amount is invested in a mutual fund.
Some of the benefits of systematic investment plan are as follows-
- Systematic Investment plan is a safe and convenient mode of investment perfectly suited for amateurs who are new into this field.
- Due to dollar cost averaging market timing becomes irrelevant making it all the more easier for investors.
- Systematic investment plan has also got a much greater power of compounding.
- Systematic investment plan also helps to save money on a regular basis.
- It is a hassle-free mode of investment, which requires you to devote just a few hours to get things done.
- Systematic investment plan serves as a great tool to counter inflation.
- It is a much cost-effective option of investment.
Important points to remember while making a systematic investment plan-
- Investing becomes a much simpler task if you can find the best time to buy and sell.
- Go for an automatic timing mechanism to avoid market oscillations and reap rich dividends easily.
- To reap the maximum benefits go for long-term investment plans (10- 15 years generally).
- Do a proper market research before taking the final leap. In this age of information boom there is really no dearth of information. You can stumble upon loads of information by only a click of the mouse button to answer all your nagging doubts.
- Get in touch with only reputed fund managers or brokers to avoid difficulties in investment.
- Take advice from friends or relatives who have invested in systematic investment plans.
- Take proper calculated moves and then decide the time span of investment.
Systematic regular investment helps you to adjust easily with the highs and lows in the market and makes the process of saving money all the more easier. So, do not ponder over your investment plans. Start saving money at a very early age through systematic investment plan and keep your retirement blues at bay.
Tags: Amateurs, Estimation, Free Mode, Hassle, Inflation, Investing, Investment Help, Investment Options, Investment Plans, Investors, Market Timing, Money, Mutual Fund, Nature, Salary, Selling Stocks, Systematic Investment Plan, Time Tested Strategy, Tool, Winds Of Change
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Sunday, April 10th, 2011
Recently, investors commence sharing in the penny stocks. This action occurred especially after investors began to realize that they had the ability to invest chump change in a selection of companies. In short, investors could invest a few pennies or dollars in small companies around the United States. Since Forex and the stock market exchange industry has higher risks many newcomers to the stock market will invest in penny stocks.
Penny stocks allow investors to put up five bucks and potentially win $25. If the investors lost their money, so what, it was only a few pennies or dollars.
For the most part, it is simple to invest in penny stocks. Investors must open broker accounts online to get started. These accounts are compared to bank accounts. Brokers will charge small fees, which is subtracted from the account each time a holder invests in the stocks. These fees will cover basic account duties that the broker tends to.
Brokers do not give advice. These people invest in stock markets themselves. To get advice the investors must pay nominal fees for stock newsletters. The freebies will mislead investors, so experienced investors will avoid these offers. Most of the freebies will also direct investors’ right into scammer hands.
Paid newsletters are regulated by the law. You pay a few pennies to get the information. This is a great option if you intend to invest in penny stocks.
To find a broker visit the Internet. You will find quality services and other offers to help you learn about penny stocks. Read the paid newsletters so that you know what you are getting into. NEVER step in to stock market without being informed.
You will find plenty of stock articles online too. Use the articles as your guide to learn about stock markets. Be careful since some articles may mislead you just as the free newsletters will. Make sure you search for articles that include facts and evident links to verify statements, recommendations, et cetera.
When you are informed, you get the most of your stock experiences. If you are new to the stock market, start with the penny stocks first and then move to other types of stock marketing.
Forex stock market, (Foreign Stock Market Exchange) exchange and stock markets often request that you invest a large amount of cash to get started. Learn the ropes by starting out small and then moving to larger investments in stock markets after you feel confident that you know what you are doing.
Tags: Bank Accounts, Broker Accounts, Chump Change, Exchange Industry, Five Bucks, Forex Market, Free Newsletters, Freebies, Invest Stocks, Investments, Investors, Market Exchange, Newcomers, Pennies, Penny Stocks, Quality Services, Stock Articles, Stock Market, Stock Markets, Stock Newsletters
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Saturday, April 2nd, 2011
Most of us come to this cross roads in life, which with the excess money, is it advisable to pay off the debt or to invest. Joshua Kennon, an advisor on debt management is of the following view. Debt can be categorized into two types one with high rate of interest and second with lower rate of interest. Credit Cards belong to the first category, they demand higher rate of interest and hence when an individual has more debt in the form of credit card repayment, it is only advisable for him to go ahead and pay off the interest occurring from the credit card and not think about the investment. In case of the second categories of debt, which is lower rate then it, is advisable that he invests in those investments, which gives higher returns. According to Mr. Kennon two things must be taken into consideration, a. What is the rate of return of the investments? b. What is the rate of interest of the various debts? Only if an individual can convince himself that paying off a debt would help him to reduce some of his burden and thereby increase the monthly amount saved.
According to Debt adviser Steve Bucci. There are two methods, which an individual can adopt, one is to pay similar kind of debts i.e. debts having similar interest rates, which are smaller in amount and easier to pay. The second one is to pay the one, which has higher interest rates like credit cards. Accordingly when an individual pays off a number of debts then he feels good about himself and can start concentrating on the next amount of debt to be paid or the investment he would like to venture into. In case of debts, which attracts higher rate of interest, an individual can pay that first such that he is left with more cash later so that he can concentrate on the other debts. But whatever be the choice the individual must chose one, which suits him; the most and can give him more convenience. Steve Bucci also advises that paying off debts must reflect on ones credit rating. When an individual starts to pay off debts to lender then he is left with lesser debts and his credit rating would go up. This in turn would help him in the long run when he has to take a bigger debt for other types of investment.
Tags: Adviser, Ahead, Convenience, Credit Card Repayment, Credit Rating, Cross Roads, Debt Help, Debt Management, Excess Money, Interest Credit Cards, Interest Rates, Invest, Investment, Investments, Joshua, Paying Off Debt, Paying Off Debts, Rate Of Interest, Rate Of Return, Steve Bucci
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Tuesday, March 29th, 2011
Mutual Funds are a long term investment. Period. Nothing short-term about them, no day trading. They are meant for the serious investor that is willing to take the time needed to grow their wealth over a long period of time. Why are mutual funds like that?
Well, a mutual fund is a collection of stocks, bonds or money market securities, which have been bundled together in one offering based on not only the goal, but the past performance of the individual components. They are taken as a whole, and as such, when some of the holdings in a fund rise, others may be falling, so the growth potential is not as extreme as, say, just one stock or bond. Over time though, mutual funds, can grow up to 8-9% a year, while the stock markets can gain anywhere from 10-11%.
There are a variety of mutual funds that an investor can hold. Some examples are Bond Mutual Funds, which are mutual funds that are comprised of bonds that are offered by a company, State or Federal Government, or Mortgage and Asset-backed bonds.
Another type of mutual fund is the Stock Mutual Fund, or Equity Fund, as some have coined it. These funds are comprised of holdings in various stock companies, and as such, can be a bit riskier due to the volatility of the stock market.
You can even invest in a Precious Metals Funds that invest in Gold, Silver, Platinum, Palladium, and even Rhodium. When an investor contributes to a Precious Metal Funds, they will receive a certificate that represents the holding.
There are some terms associated with Mutual Funds that the investor should be aware of. The first is the Net Asset Value, or NAV, for short. The NAV is a calculation that takes the Funds total assets and minuses the total liabilities. This calculation is done daily, at the end of trading, to reflect the true value of the Fund.
Another term is liquidity, which is used to describe the amount of time it takes to convert the investment to its cash equivalent with the minimal amount of fees or price discount. Mutual Funds are not known for being liquid, thats why we started out saying that they are a long term investment.
One of the most important factors in dealing with Mutual Funds is the Prospectus. The prospectus is a legal document that contains information about the Mutual Fund, such as what holdings are invested in, what the goal of the fund is, what the past performance of the fund, listing of fees, the manager of the fund, the risks of the fund, and the strategy to achieve the optimal investing balance. Anytime you have a question about a Mutual Fund, you can always refer to the Prospectus, and you can always have one mailed to you, or made available to you through download, when searching for a Mutual Fund to invest in.
Tags: Asset Value, Cash Equivalent, Day Trading, Equity Fund, Investment Period, Long Term Investment, Money Market Securities, Mutual Fund, Mutual Funds, Net Asset, Palladium, Precious Metal Funds, Precious Metals Funds, Silver Platinum, Stock Companies, Stock Market, Stock Markets, Stocks Bonds, True Value, Volatility
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Sunday, March 20th, 2011
There are so many life insurance companies out there to choose from nowadays that there are literally hundreds of different companies who offer life insurance. This is great as it gives people a variety and choice, and allows them to make a decision on the best possible supplier to meet their needs. However, there are some drawbacks to having a wide range and vast selection to choose from, that sometimes it can become intimidating and often overwhelming for an individual to be able to make a decision and pick one single life insurance company.
Monumental Life Insurance
Monumental Life Insurance is definitely one insurance company that should be considered as a leader in their market. The Company is a member of the AEGON Insurance Group, which is an international group that has a number of pension, insurance, and financial services organizations – and it also presently ranks as one of the largest insurance services groups throughout the globe.
Other than the Monumental Life Insurance Company, there are many other life insurance companies that one may choose from; it is important to be aware of all the options that are open to you before any decisions are made on any one particular company and policy.
Other Companies
Besides the Monumental Life Insurance Company, one of the best life insurance companies around is the London Life Insurance Company. They are a renowned world leader and provider of life and health insurance, as well as retirement and investment plans, and mortgages for your home covering a lot of financial services products. The company offers a wide range of different financial products and services, and most help meet the needs of differing individuals throughout the world.
In terms of insurance, this organisation helps people plan on meeting their needs of the future, this can be establishing a career, or trying to start a business or family and London Life Insurance have a lot of different policies for individuals to choose from that ill be right or you.
By having the right life insurance cover and protection policy allows an individual person to feel whole lot safer and provides them with peace of mind, especially since they are aware that when they die they will become a financial burden on their family, by passing on all of the costs to their family and these not being covered by anything. However, by having one of these policies, their family will be given a lump sum from the life insurance policy towards paying the costs of the funeral and other expenses, this is relieving to all of those involved.
When you go about choosing life insurance cover, you should take this process with great sincerity; although there are many different good life insurance companies around, there are many other companies that are cowboys and the important thing here is that you are able to spot them from the rest. You will want to steer clear of these bad apples, and not enter into business with them. If you take your time and put effort into researching this process ad getting the best possible outcome a great life insurance policy or plan that you are looking for then you will have accomplished what many others have too.
Tags: Aegon, Aegon Insurance Group, Best Life Insurance Companies, Different Companies, Financial Services Organizations, Health Insurance, Insurance Services, International Group, Investment Plans, Largest Insurance, Life Insurance Companies, Life Insurance Company, London Life Insurance, London Life Insurance Company, Monumental Life Insurance, Monumental Life Insurance Company, Pension Insurance, Renowned World Leader, Retirement Investment, Single Life
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Monday, March 14th, 2011
Laidlaw Investment Banking – History – 160 Years of Change
The Webster-Ashburton Treaty established the United States-Canada border east of the Rocky Mountains. John J. Greenough received a patent for the sewing machine paving the way for a boom in New Yorks furnishings and apparel industry. Anesthesia, in the form of ether, was successfully used in an operation for the first time by Dr. Crawford Long, and would soon to come into widespread use during Americas Civil War. The British Empire, following on the Treaty of Nanking ending the First Opium War, annexed Hong Kong, which would one day become gateway to the worlds largest population center. The New York Curb Exchange, later to change its name to the American Stock Exchange, opened for business, trading in securities not qualified for listing on the New York Stock Exchange. And the original Laidlaw & Company was born.
MilestonesLandmarks of Laidlaw & Company
1842 – Two young New Yorkers, Devid Heran and James Lees establish Heran & Lees, a commision merchant house in New York City.
1854 – Henry Bell Laidlaw enters the employ of the firm, now known as Hewitt Lees & Company.
1866 – The firm begins to assume the role of private banker. Henry Bell Laidlaw becomes the partner of James Lees.
1873 – Henry Bell Laidlaw assumes leadership of the firm. Charles E Laidlaw joins his brother, Henry, and the firm changes its name to Laidlaw & Co.
1878 Laidlaw & Co., becomes a member of the New York Stock Exchange(NYSE). Charles Laidlaw becomes a Governor of the Exchanges, serving the next 13 years.
1880 – The firm moves to a new location, 14 Wall Street, where it remains for the next 30 years.
1894 – James Lee Laidlaw, the eldest son of Henry Bell Laidlaw, becomes a partner of the firm.
1901 – The firm acquires a substantial stock brokerage wire business, which makes it the first NYSE member firm to establish securities branches in Toronto and Montreal.
1902 – Henry Bell Laidlaw dies. Under his leadership, the firm expanded from a small private bank to an influential banking and brokerage concern.
1902 – Henry Bell Laidlaw dies. Under his leadership, the firm expanded from a small private bank to an influential banking and brokerage concern.
1942 – Laidlaw merges with Mackay & Co. By the end of World War II, Laidlaw & Co., is activity engaged in investment banking, asset management, and securities brokerage.
1961 – Hambros Bank Ltd., Londons largest merchant bank, becomes a limited partner in Laidlaw & Co.
1973 – Laidlaw acquires Coggeshall & Hick, Inc., and the name is changes to Laidlaw Coggeshall, Inc.
1976 – Gottried Goli von Meyern Hohenberg, a general partner at Adams & Peck, join Laidlaw as a Senior Vice-President. Two years later, Laidlaw acquires Adams & Peck, and the firms name is changes to Laidlaw, Adams & Peck.
1988 – Laidlaw Holdings, Inc., is incorporated in Delaware for the purpose of consolidating the Securities Brokerage, Investment Banking, International and Asset management Divisions.
1994 – Europe Continents Holding (ECH), an international trading firm based in Luxembrourg, purchases shares of Laidlaw Holdings, Inc.
1995 – A majority interest in Laidlaw Holdings, Inc. is purchased by Pacific USA Hodlings Corporation, and Larry D. Horner, the Chairman of Pacific USA Holdings Corporation, becomes the Chairman of Laidlaw Holdings, Inc.
1996 – Laidlaw acquires Howe & Rusling, Inc., an investment firm, founded in 1930.
1999 – Laidlaw Global Corp. launches an interest based company called Global Electronic Exchange. A new month later, Laidlaw acquires Westminister Securities, a NYSE member firm and Laidlaw Pacific (Asia). Ltd., a Hong Kong SFE member. In June of the same year, Laidlaw Holdings becomes a public company under the name Laidlaw Global Corporation. Anastasio Carayannis becomes President and spurs unprecedented growth of earnings.
2000 – Laidlaw Global Corp. launches Globeshare.com one of Global Electronic Exchanges products, offering the first global online trading site.
Tags: American Stock Exchange, Banking History, Brother Henry, Crawford Long, First Opium War, Henry Bell, James Lees, Laidlaw, Largest Population, Location 14, New York Stock, New York Stock Exchange, Nyse Member Firm, Population Center, Sewing Machine, Stock Brokerage, Substantial Stock, Treaty Of Nanking, Webster Ashburton Treaty, York Stock Exchange
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Thursday, March 3rd, 2011
Late night TV is convinced that investing in real estate is the best way to make a million. Many investors are looking at big returns with no money down. While that is unlikely, it is possible to make money in real estate.
But you have to know that this is simply an investment, and with investments come risk. If you don’t know what you are doing, you could loose a lot.
Investing in real estate takes forethought and preparation. It could be broken into two parts: choosing your investment and exiting your investment.
Choosing your investment
Beginning investors should start with a small project. For example, Justin has been involved in real estate for over ten years now, and has invested in many commercial and residential properties. He has found that the key to his investments are to purchase in a good location.
Justin started with a simple duplex, which he later refinanced to buy a four-plex. He painted and made a few changes to the four-plex, and sold it for a seven-plex. He also bought another four-plex. He renovated the units and made minor repairs and sold it for a decent return.
He found that fixer-uppers really work well if you live nearby and can do most of the work yourself. This cuts your expenses. Justin learned with each investment and learned to be conservative. Don’t let the dollar signs rush you into anything.
Whether you are looking to buy a house, a duplex or an apartment complex, you need to carefully review the property’s economics. Are the rents you plan to charge reasonable? Are your expenses correct? Can you live with the cost of the mortgage? What happens when a unit is empty? Do you still have enough income?
You may not want to be a landlord and prefer to buy a house, fix it and flip it. While you can make a lot of money if you are wise, there are still a lot of issues involved. You have to look at the neighborhood, the market and the budget you have for repairs. Do you have enough money to pay the mortgage if the property does not sell quickly? What if you have to go over budget on necessary repairs? What if things are uncovered that devalue the home? What will you do then?
Large cities tend to be better investment areas than small towns because there are more tenants and buyers. Communities on freeways are attractive as investments due to the access to metro areas. Vacation areas and towns are also fairly stable.
Exiting your investment
Things happen. The economy, interest rates, job opportunities and construction trend impact every real estate investor. You need to watch the trends and keep in touch with local brokers, appraisers, investors and real estate attorneys.
No matter what you are investing in, you need an exit strategy. You need to know when you will sell, if you will take money and pay taxes or complete an IRS 1031 tax deferred exchange. Does your plan include enough money for your retirement? Will you pay off the property or refinance it and use the proceeds to buy another investment? What if the value of the home drops?
A weak economy is something you should watch. You need to know if a depressed market will pull out of it or last. This tells you when to exit. If you can’t find buyers when you are ready to sell, what will you do? Can you restructure your mortgage or have it assumed by a buyer. Check out what loan assumption costs are and if financing terms change with an assumption. You should research your financing options before you make any decisions, paying attention to more than just interest rates.
You need to think well into the future. Plan for the best and the worst. If you invest with a friend, what will happen if they need to pull out? Do you have enough money to handle emergencies or will you need to liquidate the real estate?
Your exit strategy is vital in making your decisions for the future. Plan with your goals in mind. The key is to take your time, pick the right property and live with what happens. In the worst case, the market goes away from where you expect and the value of the home goes down — at least you can have the tenants pay for the mortgage.
Tags: Apartment, Budget, Decent Return, Dollar Signs, Duplex, Economics, Forethought, Investing In Real Estate, Investment Properties, Investments, Investors, Landlord, Late Night Tv, Money Down, Mortgage, Neighborhood, Rents, Residential Properties
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Friday, February 25th, 2011
Home equity stands for the capital of the house, and it is the over all price of a house. The equity is an equivalent of the capital and a home equity refers to the capital that is equivalent to the price value of the house. The home equity investment is the investment that is made in constructing the house and making it value appreciate. This investment allows you to take up loan from the financial institutions depending on the rate of appreciation of the value of the house.
Home equity loan is also referred to as second mortgage. There are different types of equity loan depending on the loan amount you receive. One of the equity loans allows a borrower to opt for a fixed loan amount which is provided on a monthly basis. This loan amount is decided considering the value of the house. Hence constructing the house and making its price is an investment that allows you to obtain a loan.
The home equity investment is a wise choice as in most cases the price of a piece of land and the constructed house only increases with time. There are a number of ways by which one can make a better investment. The home equity loan amount is provided on a credit earn basis. The borrower has to earn credits which are allocated depending on the earning capacity, the history of the credit of a borrower and the value of the house. If a person is able to get a good score the equity loan is provided. If the credit history of a person is not good then the loan is denied.
There is a latest type of equity loan where in an investor is not required to show any documents related to the income. There are no verifications made but one has to compromise in terms of the loan amount that is calculated. This is not a bad option for those who do not earn a very good income.
The equity loans are generally opted for, for renovation purposes, or to pay the medical bills. A person who is not capable of paying of the bills related to renovations made or the medical bills can opt for the equity loan to pay of he bills. Making use of these simple concepts a person can generate income and thus keep away from taking high interest loans.
When the equity loan is applied for a small amount of fees is levied which includes the assessment and the other costs incurred by the company to decide for the loan amount. The loan money borrowed against a home equity loan may be used for getting rid of the debts, or to pay for some medical services availed.
These are one of the frequently used loans for consolidating the debts or to make urgent payments. Thus home equity should be considered as a source of investment. A person can get a loan against the home equity. This loan can be put to use for the general as well as specific expenses.
Tags: Credit History, Equity Investment, Equity Investments, Equity Loans, Financial Institutions, Home Equity Loan, House Loan, Investor, Medical Bills, Renovation, Score, Second Mortgage, Verifications, Wise Choice
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Friday, February 18th, 2011
15 Startling Reasons Why Your 401(k) May Be Your Riskiest Investment
Financial institutions have a distinct genius for marketing. They are able to get millions of Americans to hand over their money with very little thought taken, very little knowledge of the so-called investments offered, and even less control of their investments.
When the evidence is plainly presented, it becomes overwhelmingly clear that putting money into 401(k)s and similar qualified plans is not investing at all–it is one of the riskiest gambles for most individuals. Read the following reasons why I say this, and ask yourself if it’s time to reconsider your 401(k).
1. Limited Opportunity For Cash Flow
Qualified retirement plans, such as 401(k)s and IRAs, do not provide immediate cash flow, which means that you cannot benefit from them through velocity and utilization. The theory is that letting the money sit allows it to compound, but for most people this really means that it stagnates. Most people will not choose to utilize these funds even when a particularly compelling opportunity arises that will make them far more than the 401(k) would, even accounting for the penalties. This means that numerous legitimate opportunities are passed by as people stay “in it for the long haul.”
2. Lack of Liquidity
The money is tied up with penalties attached for early withdrawal. Although there are a few technicalities that allow penalty-free withdrawals, the restrictions are so numerous that very few know how to get around them.
3. Market Dependency
The performance of the funds is dependent upon market factors that most individuals do not have the knowledge nor the ability to understand or mitigate. This means that your retirement plans are based on unknowable projections, making for a dangerous and uncertain planning environment. Uncertainty causes fear, and fear leads to mistakes, worry, scarcity, and ultimately lost hopes and dreams. Do you want to live your ideal life only if the market cooperates?
4. The Match Myth
“Take the match–it’s a guaranteed 100 a year, based on an average return of 8 annually, but that means that some years will be lower, some will be higher. If in one year your fund is down 10%, you’re tapping into your principal to take your interest withdrawal. At that point, you have only two choices: 1) start withdrawing principal, or 2) leave the money alone until your funds are up again.
14. No Holistic Plan
I’ve witnessed on many occasions people whose finances are in shambles and although they have much more pressing needs, they diligently contribute to their 401(k). They’ve been convinced to do so, of course, because of the match, tax deferral, etc. It’s like a person trying to take care of a scraped knee when their wrist is slit. What they really need is a macroeconomic approach to their finances that will help them identify, prioritize, and manage all pieces of their financial puzzle, with all pieces coordinated and working together.
15. Neglect of Stewardship
Ultimately, the most destructive aspect of 401(k)s is that they cause many individuals to abdicate their responsibility, abandon self-reliance, and neglect their stewardship over their own prosperity. People think that if they just throw enough money at the “experts” that somehow, some way, and without their direct involvement they will end up thirty years later with a lot of money. And when things don’t turn out that way they think they can blame others–despite the fact that they only have themselves to blame.
Conclusion
Qualified plans are promoted on such a wide scale because those promoting it have vested interests–and their interests don’t necessarily coincide with yours.
If you currently contribute to a 401(k), stop and think about it for a minute. What is it really doing for you, now and in the future? The desire to save money for retirement is wise and prudent, but after reading the above, do you think it’s possible to find other investment philosophies, products, and strategies that would meet your financial objectives much more quickly and safely than a qualified plan? Are you really comfortable exposing yourself to this much risk? How can you mitigate your risk, increase your returns, and create safe and sustainable investments? How can you create more control and better exit strategies, reduce your tax burden, and increase your cash flow?
Your financial future depends on your answers to these questions.
Tags: Cash Flow, Environment Uncertainty, Fear, Financial Institutions, Free Withdrawals, Gambles, Genius, Hopes And Dreams, Investment Institutions, Investments, Iras, Legitimate Opportunities, Liquidity, Little Knowledge, Long Haul, Market Factors, Retirement Plans, Scarcity, Technicalities, Velocity
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