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You may have decided you would like to start investing in property but you are not exactly sure how to go about it. One thing you should do before you begin is to research the financing options that may be available to you.
Most people, when they first begin their endeavor with property investing, find that financing is their only means of purchasing property. The following is some information regarding real estate financing and investment strategy that may be beneficial to you.
When you hear the term “leverage” applied to real estate financing and investment, you will find that this term simply means to use borrowed money for financing your property investment. Your initial investment will be the money that you use for a down payment.
In order for this leverage to be beneficial in your real estate finance and investment strategy, you will want to secure the borrowed money at a low-interest rate and make sure the term of the loan is over the longest period of time that is possible. This is to avoid yourself from being tied up in the property and having least money for your own or other investment usage.
You do have to remember, however, that the risk of your investment is tied in directly with leverage. If you place a small down payment on the property, the leverage is high and the ratio of the amount owed to the value of the property is high, making the property a high risk. The more money you put as a down payment on the property, the lower the leverage and the lower the risk.
Many, in their real estate financing and investment strategy, use pyramiding to acquire more properties. What this simply means is that you are using the equity on one property to help you purchase another.
For example, you purchase a property for $100,000 by making a down payment of $20,000 and borrowing $80,000. The properties value at the time of the purchase is $110,000. Six months later, you have a positive cash flow of $1,000 a month on the property and its value has increased by $40,000 due to your renovations. You now have equity of approximately $70,000 or more in the property.
You take out a home equity loan of $30,000 and this is used for the down payment of another investment property. This is also known as pyramiding and is a real estate finance and investment strategy used by many.
Pyramiding through sale is also another real estate finance and investment strategy used by many, as well. In this method, when your property’s value has increased, you sell instead of taking out a home equity loan.
In the example above, if the same property was sold for its value of $150,000, you would use the money to pay off the initial loan of $80,000, deduct your initial investment of $20,000, what you have paid in interest and principal, as well as the cost of renovations, to discover you’ve made a profit of approximately $25,000 to $30,000 in a matter of a six-month period. This money can then be used as a down payment on another property.
Before you begin investing in property, it is crucial to understand what real estate finance and investment strategy you plan to use. However, it is also important to understand that property investment comes with risk. Research the facts and figures before you make any decision with your real estate finance and investment strategy.

After graduation and working for a few years, I have learned that working for money is very tough. From what I have concluded from Rich Dad series, I know that I must make money work harder by investment. So when I heard that I could make money easily by investing in shares, I quickly rushed into it. I did not come from a strong financial background like accounting. Neither did I attend any share investment courses before I have started my investment in shares. With a little savings, I simply jumped into it.
Maybe I had what you called beginner’s luck. I managed to make a bit of money from my first few trades. Then my ego became inflated. I thought that I was rather good at trading shares. Also, my greed came into the way too.
I figured out that if I could make $100 from a single trade, then if my invested capital were to increase to 10 times the original capital amount, then I would have made $1000 easily. If I could make $1000 per trade then basically, I could achieve financial freedom in a very short time. That idea really got me very excited. But the only issue was that I did not have such a large amount of capital.
Here is the bad news! I found a way to get around the issue of not enough capital. There is this thing known as contra trading which solves my issue. The rules for contra trading vary from country to country.
The basic idea of contra trading is that I am able to earn money without any capital. If I buy shares of a company today on the stock exchange, I only need pay up the purchase amount within the next 3 days. If I happen to sell all the shares within the next 3 days period, then I do not need to fork out any money at all. The sale amount will be able to cover the purchase amount.
For example, if I were to buy 10,000 shares at $1 today from the stock exchange, then I would need to pay up $10,000 plus the transaction fee within the next 3 days. Let say the price of the shares increases to $1.20 on the next day. And I sell all the 10,000 shares at that day. Then the sale amount will be $12,000 minus the transaction fee. This sale amount is definitely greater than the purchase amount. So my profit will be the sales amount minus the purchase amount without the need to fork out any initial capital.
You must be wondering why I mentioned that it is a bad news when I found out about contra trading. Well, let look at the above example again.
if I were to buy 10,000 shares at $1 today from the stock exchange, then I would need to pay up $10,000 plus the transaction fee within the next 3 days. Let say the price of the shares drops to $0.80 on the next day. Since the price has dropped, I will not want to sell and make a lost. But let say on the last day, the price of the shares still do not recover. If I want to hold on the shares, I will need to pay the purchase amount. Since I do not have the money, I will need to sell at shares at a lost. If I do not sell my shares and do not pay up the purchase amount, the stock exchange will do a forced sell on my behalf at an even lower price. No matter what, I will still end up with a lost.
Well, that is exactly what had happened. That is the reason that I told you it is bad news for me to find out about contra trading at such an early stage. Instead of making money, I ended up losing money. The amount that I had lost almost wiped out whatever little savings that I had. And I woke up from my dream that I was a good trader. Because of this painful lesson, I learned that it does not pay to rush into investment without knowing what I was doing. And I decided that I want to learn more so that I may recover my loss.
After study and learning more about shares investment, I have learned that a few general guidelines can be applied to any kind of investments.
Firstly, I must get educated in the type of investment that I am investing. With this knowledge, I will be able to identify the risks involved in that type of investment.
Secondly, I must find out if there is an existing system to manage the risks involved so that the investment becomes more viable. I will avoid inventing the system because it will cost too much money and effort due to mistakes.
Thirdly, I will always start with a small amount when investing in any new type of investment. This is so that I may gain experience and learn more about the practical side of the investment. Since I only risking a small amount, my loss will be capped if I make any mistake.
Next, I will only invest after I have set aside my emergency funds and taken care of my insurance needs.
Lastly, I will only invest the amount of money that I can afford to lose. This investment amount should be a separate amount from my emergency funds.
* DISCLAIMER *
The author only provides the material and information as a layperson’s views about an important subject. The materials and information are from sources believed to be reliable and from his own personal experience, but he neither implies nor intends any guarantee of accuracy.
All the materials, information and procedure in this book are only the author’s personal opinion. You must consult your own professional advisor and other reputable sources on any matter that concerns you or others.
The author, publishers and distributors are not competent and do not profess to give legal, accounting, medical or any other type of professional advice. The reader must always seek those services from competent professionals who can review your own particular circumstances.
The author, publisher and distributors particularly disclaim any liability, loss, or risk taken by individuals who directly or indirectly act on the information contained herein. All readers must accept full responsibility for their use of this material.

Yeah, you may have ideas, good ones. And you may have a solid business plan that will make you more money than even you can comprehend, but without the capital to make your first investment, your plans may never become a reality.
To get started in real estate investing, many new investors look for ways to finance their first project. These financing options include borrowing equity from their home, taking out a second mortgage, using credit cards, or taking on a business partner. While all of these options have been proven successful strategies by more than a few investors, they are risky and may cost you more than you think.
The first rule about real estate investing and investing in general is to never invest more money than you can afford to lose. If you max out your credit lines in the hopes of making a profit, what will happen to your financial stability if the investment fails? Can you really afford the payments and interest required to pay off these lines of credit? If you have to borrow all of the money needed to get started, the answer to these questions is not going to be positive.
To make your financial future as stable as it can be, you should be able to produce the majority or a good chunk of the money needed to make the investment yourself. This may mean that you have to start off your career in real estate investing on a much smaller scale than you previously planned, but the sacrifice is well worth the peace of mind and well being of your family.
You should start saving for real estate investing just as you would any other major type of purchase. Figure out when you would like to make your first investment and how much money you would like to invest. Then, figure up how much money you will need to put back each week to meet that goal.
Don’t forget about interest-bearing accounts either. If you have some time before you want to make your first investment, you can multiply your savings by purchasing bonds or by investing it in stocks. Of course, you wouldn’t take as much risk with this investment as you would other types of investments, but you could earn a good deal of interest on your savings which will only help you meet your goal sooner.
Once you have made your first investment and seen profit in it, you can take part of this profit and invest it in future projects. If you keep doing this with each investment, you will soon be able to invest on the scale that you dream about without ever having to go into debt and risk your home and family to do it.

Whether you are strategic planning to start your own business, looking forward to some profitable work from home opportunities or searching for a suitable business partner, preparing the perfect setup for a business is one of the first and most important steps that you need to take. From having the right financial capital, good networks and right kind of entrepreneurship to strategic planning and careful decision-making, establishing a business in today’s ever-growing corporate market takes a lot of careful strategic planning and intelligent investment. Once you get the precise guidance for making your business enterprise find the right place in today’s corporate world, making your enterprise proceed smoothly and gaining a cutting edge over your competitors become much easier jobs.

There are several websites that offer valuable guidance and suggestion to help commercial investors, entrepreneurs, business experts, financiers, developers and those planning to start their own personal business enterprise from home in establishing successful and profitable business. People from a variety of fields find these websites very helpful for providing investment guidance and motivation. Whether you are a veteran businessman or a new entrant in the domain of global commerce, investment guidance websites operating twenty-four hour a day and for seven days a week will provide you the right guidance to meet your specific business requirements.

Starting a new business involves investment in a number of ways. One of the first and foremost decisions you have to make is what type of business you want to run, the products you want to deal with and the specific business goals you have in mind regarding the same. Next comes arranging the capital that you can invest and the strategic planning according to which you want to proceed in your commercial venture so that you get to reap the maximum amount of profit in the minimum amount of time. While for businessmen conducting their commercial enterprises for long time periods, points such as these come naturally, for entrepreneurs in their respective commercial fields, proper guidance in the respective commercial fields play a major role in giving their business venture the correct start. From starting a business and finding the right investor to selecting a venture capital and finding the right business partner, investment guidance websites guide you in almost every aspect of your commercial enterprise.

One of the primary factors for a successful business is finding the right exposure for your products and services. In order to gain the best perspective of where exactly your business stands in the current commercial market, you must have clear knowledge about the prevailing market scenario. You can gain an edge over your competitors dealing with the same line of products and/or services by properly understanding the market demands at a particular point of time and what your rivals are offering. Investment guidance websites provide you with a look into making the best business investments so that your commercial venture is able to capture the market (of the relevant product) in minimum amount of time with maximum revenue generated in your favor.

No matter whether you are a veteran in the commercial arena or a newcomer, some fundamental features of marketing remains the same for all types of businesses. Investment guidance websites provide you the right direction and insight regarding the same so that you get a clear picture of the current market scenario and thereby, able to strategically plan your commercial venture. Finding the right franchise is a major step towards establishing marketing channels for a business. An investment guidance website can help you take this decision most effectively with careful attention paid to the exclusive requirements of your commercial venture. If you have developed a new product and want to get it off the ground, investment guidance websites will give you the correct guidance to launch you business venture successfully. In many cases, prospective businessmen are also on the lookout for businesses for sale. Depending on your specific business requirements and commercial goals, investment guidance websites working for this purpose will inform you on the most suitable businesses available for sale at any given point of time. From Investors and Angel investors to venture capitals, investment guidance websites provide you information on just about each and every aspect of your commercial venture.

If you are already running a successful business and want the right strategic planning to expand it further, finding the right kind of capital and business partner often forms one of the chief aspects of your strategy. Investment guidance websites help you find the right capital for your commercial requirements and according to your specifications and particular needs, find you the best business partners. If you are looking for the best scope to sell off your business with best exposure of your products and generation of maximum profit, these investment guidance websites provide you customized guidance so that you get the best deals in selling off your business in shortest possible time. While advertising for your franchise and looking for the best applicants, investment guidance websites can help you with proper insight for selecting the people most competent to meet your business requirements and take your commercial venture to new heights.

In addition to the amount of capital, making the right financial investments at the right time plays a crucial role in giving your business a great start and profitable progress. For the best commercial progress, you have to know exactly where to invest your capital. Investment guidance websites provide you the right type of financial guidance so that at every step you can make the right business investments and thereby, generate the best possible revenues in shortest possible time. For many entrepreneurs and newcomers into the domain of commercial venture, starting a business involves borrowing a lump sum amount of capital from a reliable source. In most cases, banks play a central role in providing this financial capital to business-starters. However, as the rates of interest charged by the banks in these cases are significantly higher, businessmen often seek more affordable means of obtaining the business loans. Investment guidance websites provide you information on many other alternative sources, in addition to banks and financial companies, from where you can conveniently borrow the required amount of capital for starting your business enterprise.

Investment guidance websites are complete online business directories designed to help you in making the right business decisions and make the right commercial moves at the correct points of time in order to gain the best business revenues and flourish your commercial enterprise in the best ways possible. They can prove to be extremely helpful if they are properly utilized for your business goal.

Financial education plays an important role in my life. Ever since I have realized that it is important to make money work harder for me, I have been constantly reading and learning about financial education. With the new knowledge that I have gained each day, I have realized that I am improving in my ability to identify risks in an investment.
Identify risks is the first step to evaluate an investment. If I want to be a sophisticated investor as defined in the Rich Dad’s series by Robert Kiyosaki, then I definitely need to be able to identify risks in an investment. If I do not know what are the risks involved, I will not be able to manage the risks. If I cannot manage the risks, then I will have a high chance of losing money in the investment. That is something that I want to avoid. If I had foolishly invested without the knowledge of the inherent risks in the investment, then I would be considered to be a gambler than an investor.
Every investment has risks that are obvious and risks that are hidden. Someone with a little knowledge can easily detect the obvious risks. But for the hidden risks, it takes someone who is experienced in that field to see.
Take stock investment as an example, what are the obvious risks and hidden risks involved?
The first obvious risk is the risk of losing money. If I have invested in a stock and the share price drops, then I will be losing money.
The second obvious risk is that a company can go bankrupt. When a company go bankrupt, the shares of the company become worthless.
The third obvious risk is that a company may de-list from the stock exchange. When a company de-list from the stock exchange, the shares become worthless.
What about the hidden risks?
Firstly, there is a risk of addiction in stock investment. This will cloud my judgment in selecting stocks to invest. Where does the addiction come about? When the share price goes up, I feel excited because I am making money. The effect of excitement is like drinking liquor to feel high. When the share price goes down, I feel depressed because I am losing money. The effect of depression is like taking alcohol to feel low. This up and down of emotions is a source of addiction. In fact, this risk exists in investments such as options, currencies and commodities.
Secondly, there is a risk of falling in love with a stock. Again, this will impair my judgment in selecting stocks to invest. How do I fall in love with a stock? Well, all I need to do is to make money from a particular stock a few times. Thus, I have attached a positive experience of making money by investing in that stock. When I am selecting stocks to invest, I will have tendency to select that stock again even though the technical analysis or fundamental analysis says otherwise.
Thirdly, there is a risk of the government changing the policy thus affecting the stock market. If a government changes the policy that impacts investment negatively, foreign investors may withdraw their funds from the stock market. This will result in the stock market crashing. In other words, I will lose money in my stock investment.
Next, there is a risk of external events that will affect the stock market. For instance, a terrorist attack will affect the stock market because the confidence of investors is shaken. Similarly, a great natural disaster will affect the stock market.
Then, there is currency exchange rate risk. This is true if I have invested in stock that is listed in foreign currency in a local stock exchange. Another possibility is that I have invested in a stock listed in a foreign stock exchange. If the share price increases, then I should be making money. But if the foreign currency depreciates in value against the local currency, then I may end up losing money.
Lastly, there is a risk of leverage. Before I am allowed to trade in a stock market, I will need to have a brokerage account with some money. Usually, the brokerage firm will allow me to leverage by trading up to several times the amount of money in my brokerage account. Sometime, the brokerage firm provides margin account for trading to enhance leveraging.
Leveraging is a two edged sword. It can work both ways. If the share price goes up, I can make more money by leveraging. If share price goes down, I will end up with a lot more money to pay because of leveraging. Leveraging is like a magnifying glass that will magnify my trading mistake.
The list of hidden risks may not be incomplete since I am still learning about stock investment. The main point that I want to raise is that financial literacy is important as highlighted in the Rich Dad’s series by Robert Kiyosaki. I have simply used stock investment to illustrate my point.
* DISCLAIMER *
The author only provides the material and information as a layperson’s views about an important subject. The materials and information are from sources believed to be reliable and from his own personal experience, but he neither implies nor intends any guarantee of accuracy.
All the materials, information and procedure in this book are only the author’s personal opinion. You must consult your own professional advisor and other reputable sources on any matter that concerns you or others.
The author, publishers and distributors are not competent and do not profess to give legal, accounting, medical or any other type of professional advice. The reader must always seek those services from competent professionals who can review your own particular circumstances.
The author, publisher and distributors particularly disclaim any liability, loss, or risk taken by individuals who directly or indirectly act on the information contained herein. All readers must accept full responsibility for their use of this material.

Usually people don’t choose financial advisors; they simply get in touch with them. Many a times in some private banks you will find a super consultant or super advisors who will sell you everything like insurance, credit card, and even mutual funds. Banks are distributor of mutual fund and not the advisors.

Mind it; if you are investing advice from any bank you actually take advice from a distributor and it that case it is not necessary that you get a fair and quality advice.

An adviser should be one who can provide his customers with real value based advice rather than simply pushing sales in order to earn a better commission. Advisor’s role assumes significant importance in an exuberant scenario like the present one, when it is easy for investors to lose track of their objectives and make wrong investment decisions. Conversely, an association with the wrong investment advisor can spell disaster for investors. We present a few pointers which will help investors gauge if they are with the wrong investment advisor.

If the Advisor is offering rewards in terms of payback.

Select an advisor for his ability to recommend the right investment avenues and manage your investments rather than his willingness to refund commission. By offering payback the advisor is not doing justice to his to his work as he is luring you towards doing that investment. This specifies that an advisor is putting your money at risk by giving you commission.

This practice (widely prevalent despite being explicitly prohibited) among investment advisors is to rebate a part of commission earned, back to investors i.e. the investor is ‘rewarded’ for getting invested. What investors fail to realize is that the commission offered by the advisor is actually reward for taking more risk. Wealth creation for investors should come from the investments made and not commissions. Select an advisor for his ability to recommend the right investment avenues and manage your investments rather than his willingness to refund commission.

The advisor only advices top few funds most of the time.

Most of the time an advisor will suggest you some fund and will show you its annual returns. Most of the top ranking funds are sectoral funds and they carry a certain amount of risk. Usually sector funds being a fund with major allocation to specific sectors they are high risk funds. Many times in order to generate large funds from the market the fund houses have fallen prey to herd mentality and launched similar offerings in quick succession. The banks and investment advisors have played their part by indiscreetly pushing these products since they get better commission.

Think again before you take suggestion from such advisors.

If the advisor always have an NFO to pitch for.

Investment advisors have earned well through the mutual fund New Fund Offer’s by convincing investors that it is cheaper to invest during the NFO stage. But be careful this is not the truth. Mutual fund distributors and advisors mostly take benefit of the lack of knowledge on investor’s part by pitching the mutual fund NFOs as stock IPOs, distributors have only discredited themselves by not being true to their investors. Advisor should only recommend a new fund if it add value to the investor’s portfolio or is a unique investment proposition. Any advisor who is true to the profession will pitch for an existing scheme which has a good track record and proven rather than a similar scheme in its IPO stage.

If Advisor’s role is restricted to delivery and pick up of forms.

Investment advisor’s primary role includes creating a portfolio for the investor based on his needs, risk profile and successfully managing the same. While maintaining high service standards is pertinent, it shouldn’t gain precedence over the advice part. Most of the advisors I have seen are usually working for big distributors such as banks, big brokerage houses. The main work for them is meeting the targets rather than provide value base advisory service. Independent individual Investment advisors prefer to make their work simpler by showing them selves only when they had to collect the form.

Investment strategies for the long term are a vital to our future. How you invest now may be the difference between a comfortable retirement, and working for the rest of your life. Nobody likes the idea of having to work for the rest of their life, and we have put together a list of do’s and don’ts to secure a comfortable retirement.
Tip #1 Educate yourself
There are people out there who play the stock market like they play the lottery. This is very dangerous, gambling on the stock market is the equivalent of going to Las Vegas and putting your life savings on the line. With any investment that is going to provide a decent return, there is risk. How much risk you take on with any investment directly affects the return. The general rule of thumb is, the higher the risk, the higher the return on your investment, and likewise, the lower the risk, the lower your return. The risk of investing into just a savings account has been explained.
While investing in stock is riskier, educating yourself can reduce the amount of risk you take on. This includes finding out what common terms are and what they mean. Understanding the financial statements of the company you want to invest in, and understanding the market that you are investing in.
Tip #2 Devise a plan
This step is just as important as the first, having the education is useless without having some kind of direction. Decide where you want to be by the time you retire, where you want to be when you hit fifty. Evaluate where you are now and what you want to accomplish in the next year, you can never plan too much.
You will also need to decide what kind of retirement you want to have. Do you want to maintain the quality of life you have now? Do you want to retire rich? Filthy rich? Or do you want enough to just get you by every month? Realize what you want to do and devise a plan.
Tip # 3 Investing is vital to your retirement
This cannot be stressed enough. It used to be that you worked for a company for 30 years until you retire, you get your office party and the faux gold watch, but you had a pension and social security waiting for you afterwards. Nowadays you have companies cooking the accounting books, and executives being the only ones with guaranteed pensions, and CEO’s abandoning their companies leaving their employees with nothing while they take their guaranteed multi-million dollar pensions home.
What does this mean? It means that the person with your best interest is you. Nothing is guaranteed any more, not even social security. Corporations are replacing pensions with 401k plans, in essence they are shifting the responsibility for your retirement from them to you. It is up to you to decide whether you want to invest in your future. Realize that if you decide not to invest at all, you are throwing you future away.
Tip # 4 Research Research Research
There are so many reasons that you need to research whatever investment vehicle you choose. Whether its real estate, stock, whatever, you should never invest off of an assumption. Most investors refer to this as due diligence. First and foremost, never invest off of a “tip.” There is always someone out there that knows what the next big investment is. They’ll tell you to buy some shares of so and so stock because they are guaranteed to give you phenomenal returns.
While the advice may have some truth, it is best to do a little research first before putting any money into it. When doing research, it helps to understand financial statements. In general, if a company has more costs than it does revenue, this means the company is not turning a profit. In 2000, Amazon.com (NASDAQ: AMZN) was selling its shares at $113.00 per share, all while never having turned a real profit since the company started.
Today Amazon’s stock can be bought for $45 a share. Imagine if someone invested their entire life savings into Amazon’s stock at this time, they would have less than half of what they saved left. This is the reason for the most recent stock market crash, investors were buying shares from companies that could not show a profit. Companies were having lavish office parties every week because their stock was flying through the roof, all while their product sales could not fund these expenses.
Another reason for the recent stock market crash is because a lot of investors invest with emotion rather than knowledge. Over the holidays investors feared another terrorist attack, so they sold shares fearing another attack would drive the stock market back down. The emotion was fear. And that fear is detrimental to the stock market. If enough investors get scared and begin to sell their shares, the market will surely drop. If more investors are buying than selling, the stock market will rise.
Tip # 5 Inflation
The final tip is also a part of research, understanding inflation. It is important to know that as it pertains to your future, inflation is not good. The Webster’s dictionary defines inflation as: an increase in the volume of money and credit relative to available goods and services resulting in a continuing rise in the general price level. In other words, as time goes on, prices rise.
A good example of inflation, is how a million dollars today, isn’t what it was 20 years ago, and it wont be what it is 20 years for now. If it would take $2 million to retire today, find out what $2 million will be by the time you retire, otherwise you will be selling yourself short.

Foundations, endowments and other not-for-profit organizations come in all shapes and sizes. The assets that they control and manage for the benefit of countless projects, charities, and causes is staggering in total and it has become a primary market for the vast array of investment products developed by Wall Street financial institutions. One can only speculate about how much “bubble paper” finds its way into the these portfolios, but nearly all of them are managed by the major brokerage firms, and all such firms bonus their brokers on the basis of product sales. It is not uncommon for Wall Street to re-write the syllabus for Investments 101, redefining quality, diversification, and income to suit its own dark purposes…
If you were to look back at your foundation/endowment/not-for-profit portfolio of the late 90’s, how much was invested in NASDAQ issues, either directly or in the form of mutual funds? Dot-coms? Don’t be at all surprised if your more recent reports (2006 thru 2008) are replete with CMOs, CDOs, index funds, foreign investments, asterisks, footnotes, etc. This is the type of investing that is standard fare on Wall Street and it is certainly something that you need to be concerned about. Wall Street pros always move the money toward whatever is most popular at the moment. Always, no matter how late in the cycle it happens to be.
Regardless of the proprietary label given to this new age, scientific asset management, the speculation level is barely above that of options, commodities, and futures. You don’t need to go there to achieve the goals of your organization… plain vanilla stocks and bonds are not broken, they have just been replaced with better income generators for the wizards of Wall Street. I understand that they’ve even been able to change the “prudent man rule” to allow unusually high risk, get this, so long as the potential reward is equally significant! Have I gotten your attention?
From what I’ve been reading, it seems that the disbursement-budget determination process in some organizations is based on information that has absolutely nothing to do with a portfolio’s ability to generate the money being disbursed. Similarly, it appears as though all investments are expected to grow in market value all of the time, irrespective of where mother nature’s investment twin is in developing her various cycles. Somehow, a higher market value translates into higher availability of disbursable funds, when, in fact, no such relationship exists.
Some organizations determine their annual disbursement budget based on the average market value of the investment portfolio over the past several years. If the investment markets cooperate, and the market value remains above the average, the disbursements take place as scheduled. If not, some beneficiaries may have to go without. This is unnecessary, as well as absurd. The average market value of the portfolio is not what determines the amount of spendable income the portfolio produces. The market value approach also assures that payouts will decrease just when they are needed the most… when the market is in a prolonged correction, donor contributions are down, and interest rates or inflation (or both) are trending higher.
Let’s say, for example, that we have a portfolio invested solely in government bonds yielding 6%. This 6% will be available for disbursement regardless of the direction of the portfolio market value. Lower valuations are always opportunities to add to holdings; higher ones should provide profit-taking opportunities. Similarly, a portfolio invested in equities with an average dividend yield of 1.5% just will not cover a 4% disbursement nut unless something is sold… a sale that could well be a losing transaction. (Wall Street pros take losses quickly, but rarely take profits in the same manner.)
The amount of base income produced by a portfolio is very predictable. In the case of most foundation and endowment portfolios, the rate of annual additions from contributors can also be safely, and conservatively, estimated. Creating a portfolio that produces enough income to cover programmed disbursements, even with a three-month money-market reserve, is simply simple… and has absolutely nothing to do with the portfolio market value. Another thing to look for, as a trustee or director of your organization is the profitability of sales transactions. The results may surprise you.
Inflation is a purchasing power issue, and purchasing power depends on income. Hoping, as many people do, for an upward only portfolio-market-value scenario is, at best, comical. A properly designed portfolio will constantly generate increasing levels of base income at varying market value levels, and that is the stuff from which disbursements are made. If the payout rate to beneficiaries is 4% (of working capital, perhaps) and we want to increase the dollar amount of the 4%, we need simply to increase the assets that are producing the cash flow… by reinvesting some of the income and contributions appropriately.
Increasing the market value of the securities looks good but generates no additional regular spending money. In fact, higher yields are always more readily available when prices are down than when they are up… go figure. Really, go figure.
If we can (through proper asset allocation, and a portfolio management methodology that focuses on working capital) increase our investment in our income producing securities base, we can stay ahead of inflation and satisfy our commitment to whatever cause it is that concerns us. This can be done with much less risk than most not-for-profit board members have become used to in recent years while they blindly chase the gold ring of ever higher market values. Market value, though, will cycle to new highs periodically, as the stock market, interest rate, and business cycles move on down, and up, the road. Isn’t the primary purpose, after all, to grow the distributed benefits?
As important as income is to the achievement of your disbursement goals, there is certainly a place for a diversified portfolio of investment grade value stocks within the asset allocation. You will have difficulty convincing your broker to stick with IGV stocks, and to trade them for short-term profits. Frankly, most are inexperienced at doing so. But your tax status, size, and mission are perfect for this kind of strategy. Your investment manager should take care of the income part of the asset allocation first, before venturing into the riskier realm of equities. Stop! No matter what you’ve been told lately, quality income investments are always less risky than even the best equity investments. What about the 2007 CDO mess? Junk is junk, no matter how pretty the package.
You have a fiduciary responsibility to understand what’s inside your not-for-profit investment portfolio… even if you think that you are pleased with its recent performance. It just makes good sense to get another opinion. Similarly, if you donate money to a cause that interests you, the general structure and content of the investment portfolio should be of some interest. Complicated products with trunches, and multi-level ifs-ands-and-buts are for arbitrageurs and speculators. Any investment product that requires a masters degree in quantum mathematics to decipher is hiding something… and that something is excessive risk.
What’s in your not-for-profit portfolio?

The real estate market of India is becoming a hot selling property and is attracting the attention of investors as they are getting huge profits and high returns on their investments. The real estate in India may still be a fragmented industry with high transaction costs and an absence of complete transparency, but it is whetting the appetites of domestic and overseas investors.

Seeing this current trend one can say that India is going in a right direction and soon more and more people will be coming forward to go for real estate investment property in India. India is a country that offers a suitable environment providing maximum benefits to the investors. People are more attracted towards India for the real estate investment due to the fact that India is one of the largest democratic countries in the world with good governing system equally supported by strong and transparent legal system. It also provides legal protection for intellectual property rights.

Nowadays, apart from real estate investment property in India no other business is lucrative and revenue generating. Investment in properties includes hotels, resorts, hospitals, educational institutions, and housing and commercial premises. The government has reduced the minimum mandatory area to allow FDI in real estate sector from 100 acres to 25 acres .Nowadays more numbers of investment property are available in the real estate market with investment securities. Real estate investment comprises more return on investment and that is the reason why most of the people negotiate the real estate investing contract very quickly. The real estate sector in India is attracting huge investments. Private equity players are considering big investments, banks are giving loans to builders, and financial institutions are floating real estate funds.

The real estate sector in India is attracting huge investments. Private equity players are considering big investments, banks are giving loans to builders, and financial institutions are floating real estate funds. With 100 per cent FDI in real estate now being allowed, overseas developers are also closely looking at the market. International investors like the US-based Warburg Pincus, Blackstone Group, Broadstreet, Morgan Stanley Real Estate Fund (MSREF), Columbia Endowment Fund, JP Morgan Partners and Amaranth Advisors have been found to show interest.

Indian institutions, such as HDFC, ICICI Venture and Kotak Mahindra are launching funds to invest in real estate Gurgaon. Most of these funds have been meeting investment bankers, banks and housing finance companies in India to get a feel of the market. The developers are looking to tie up with Indian companies, while the private equity funds seek to test the market with small investments in big projects.

Making money needs labour and wise people know it. But very few people know how to preserve money or how to make it grow. Of course, there is no any magic stick for that. But this is also true that some intelligent financial moves and wise decisions along with a proper investment solutions UK can make it happen. This is the latest trend of saving money and making it grow.

You can choose any investment solutions UK according to your choice and investment plan. These days various financial solution companies are offering numerous investment products like ISAs, unit trusts, investment bonds, capital protected products, investment trusts and shares. In fact, nowadays millions of UK citizens hold investments in unit trusts and OEICs, aka., open ended investment companies.

These days unit trusts are proving to be one of the best extensively used investment solutions UK. These are collective investment funds which allow investors access to numerous shares, bonds, gilts or property. One of the major features of unit trusts is that the funds are open-ended allowing units to be created when people invest and cancelled when individual investors cash in their investment. The unit price fluctuates up and down to reflect the exact value of the investments held in the fund and prices usually change daily.

Furthermore, OEICs also work in a similar fashion to unit trusts but they issue shares in a fund, rather than units. The shares move up and down in line with the fund’s underlying assets and the fund is owned collectively by all investors. And the key difference between an OEIC sub-fund and a unit trust is that OEICs are ’single-priced,’ while unit trusts have a buy price and a sell price.

Thus, you are required to read all the pros and cons of unit trusts and OEICs and in fact about any investment solutions UK which you want to opt for. This you can do by searching about an investment product of your choice on the Internet as these days various financial solutions companies have online presence that can be used by you.