Free Forex Trading Tips
10 Advantages Savings Plans Have That The Forex Does Not
If the income offsets the additional risk or provides a reserve against which to write off losses when they eventually come, then high yield investments justify themselves, and they do when they are chosen with intelligence, with information at hand on the investment and when they are administered carefully, as we will see.
Along with this general theory that there is a good deal of merit to investing in high yield opportunities, safety should be stressed. This leads us to the second characteristic of the investments we are going to examine.
2. Collateral or guarantees. A home owner may show you his bank account and also prove that he owns his home free and clear, so that you conclude that he is a good risk whose signature on a note is as good as gold but it is far wiser for you to take a mortgage on his home. Or if he has securities it is better to have him assign the securities to you than just to take his promise to pay.
If a dealer sells you a customer's conditional sales contract on an automobile he sold on which the customer is obligated to pay in time payments over a given number of months or years, it is well, if possible, to have the dealer guarantee the contract in case the customer defaults. Two people are obligated to pay, and certainly two are better than one.
3. Provision for easy repayment. If someone borrows $2000 from you at an attractive rate of interest and promises to repay it at the end of 12 months with 15% interest, the proposition on its face is a bad one. If he needs the $2000 now, what assurance is there that he will have it to repay at the end of 12 months? Such a sum is not small. Does he intend to borrow from Peter to pay Paul at the end of a year? In New York City a seemingly very substantial man did just this for years and got away with it until he died. That was over two years ago and the creditors are left holding the notes.
Periodic, small payments are a sensible requirement, and it must be demonstrated that the debtor can make these payments out of his income when all of his obligations are taken into consideration, and these obligations must be known.
4. Responsibility for payment. Some individual or individuals, or a corporation composed of very distinct individuals must be obligated to pay in the type investment we are talking about. Unimproved land on the edge of the city may be a fine investment. Some day it may double or even triple in value, but what we are trying to emphasize is the type of investment in which there is an obligation on the part of a person or persons to pay a given amount at a given time or in time payments, and you as the investor must look to this person or these persons to pay you on the due date.
5 .Liquidity. The longer a contract runs the less liquid it is and generally the less desirable. You cannot get your money out of it for a long time, and then the business or the business climate may change. The person who lent $10,000 in 1928 for five years in all probability had difficulty in collecting in 1933. A demand note is certainly preferable to a five year note. You may have need for the money sooner than you thought when you made the investment, and if you are tied up for five years you cannot get your funds back. Perhaps better opportunities will present themselves. Stay as liquid as possible.
6. Spreading of the risk. If you have $10,000 to invest it is best not to put it all in one place into a mortgage for instance. It is far better to put it into five mortgages of $2,000 each. The $10,000 mortgage could be defaulted, but there is not so great a probability that all five mortgages will be defaulted.
7. Part time administration. We are not writing for the purpose of getting a person to quit his job in order to devote all of his time to his investments. We are writing for the person who wants to invest in his spare time and look after his investments in his spare time. The investments described here may in some cases require more watching than others he has made, but by definition they must require a minimum of administration on the investor's part. Payments must be made regularly, and the skipped or late payment must be the exception.
8. Business functions performed by someone else. You as the investor should not undertake to perform any business function. The only function you should perform, once the investment is made, is to receive the payments, and in the event that payments are not made, you should be able to resort to a simple procedure at law to retrieve your money. If you invest in a filling station you should not have to hire a manager and then proceed to sell gas and oil yourself, under our definition of the type investment discussed here. The filling station should be leased to a major oil company for a fixed rental, and the oil company should perform all of the business functions.
9. Investment not subject to litigation. When a debtor can't or won't pay, the first thing he thinks of generally is some defense (and his imagination is unlimited on this point) against paying you: you had agreed to lend him more at the end of a year, and because you did not lend more his business failed. Or the rate of interest you charged was usurious and thus contrary to law; or you really owed him something before you ever lent him the money, and this should be an offset against what he owes you. These defenses are used almost every day.
If he signs a note, he should sign a waiver of judgment note (in states which recognize such notes) and such a note will be described later. Your investment should not be subject to litigation, and you must be sure of this fact before you make it.
10. Tax advantage. The Internal Revenue Code and Regulations state what the obligations of a tax payer are and what they are not. You are obligated to pay every cent you owe, and you are not obligated to pay what you do not owe.
Certain types of investment are more heavily taxed than others. There is nothing the matter with investing in state and municipal government bonds just because you do not pay any federal income tax on the interest. This is the law, and it works to the advantage of the investor in government bonds and incidentally makes it less difficult for the state and municipal governments to finance their operations. Investments with a tax benefit or tax shelter are more desirable in many cases for the investor than those without such a benefit or shelter.
However the Forex can make you rich within months instead of years.
Articles compliments of skaDoogle.com
Browse Our Information Mall
Free Forex Trading Tips
Other Interesting ArticlesLearn Forex Trading Online TipsLearning To Trade Currencies O... [Read more] Forex Versus Futures Market - What Is The Difference1. The Futures M... [Read more] Forex Trading – Five Tips To Make Money Fast!Th... [Read more] Forex For Absolute Dummies•Bid – to buy •Ask – to sell •Liquidity – financial ease of transaction, i.e. cash •Trading volume – the amount traded •Bid/ask spread – the difference between the proposed buying price and the actual selling price •OTC – over the counter •Exchange rate – the difference between currency values; for instance, a Canadian dollar is valued at .86 of a US dollar •Hedge funds – large mutual funds companies that control vast amounts of money and are able to manipulate the value of a currency through speculation •Central bank – the national bank of a nation, which usually exerts control over the value of that cur... [Read more] Forex Trading: The Most Common FlawsMany traders are very much attracted to the sophistication offered by the multi indicators and use them in their forex trading systems. Many of the confluence system indicators show the price movement and in no way adds any value to the trade. Due to this, the traders either end up over bought or over sold technical indicators like the stochastic, momentum indicators, candle stick chart pattern recognition, Bollinger band breaks out even neural networks which are supposed to be artificial intelligent systems. The technical indicators just show signals which are similar to buy or sell or hold, making the signal generated to be correct. Theoretically it sounds good but in reality to arrive at a conclusion might be difficult. As a result the traders are confused in making a right decision. They either enter too late or too early or remain still without being able to make a decision to enter the market. The major flaw is due to the use of useless trading system which does not serve the purpose to make profits, but confuses the traders and complicates the forex trading until the trader l... [Read more]
|
The 3 Keys to Spread Betting on the Forex MarketsMarketWatch (press release)Here are some tips that will help you to get a foothold into the world of forex spread betting, so you can net a tidy profit from your forex trades. Analyse: It always helps to put some thought into how you will be analysing the markets before you ...and more... |
|
No Greek Exit, Says ANZNinemsnCheck out ninemsn Finance's Tax Time for tips and advice on how to make your 2011/12 tax return work for you. By Greg Peel ANZ believes the odds of Greece leaving the eurozone are only 30%, hence the odds of the zone remaining intact as is are 70%.and more... |
|
Free Forex Trading Tips
|
Download Our Free eBook!
- Related Articles
- >> 10 Advantages Savings Plans Have That The Forex Does Not
- 10 Good Reasons Why You Should Jump Into Trading Forex
- 5 Tips For A Good Forex Trading System
- 7 Reasons To Start Trading On The Forex Currency Market
- 7 Reasons To Trade The Forex Market.
- The 7 Undeniable Rules Of Forex Trading
- The Abcs Of Forex Trading
- A Guide To Forex Trading
- An Overview Of Forex Trading
- [More Articles...]
  Fibonacci And Gann Price And Time Trading. | Access to 500+ True Drop Shippers! Free Turnkey Ecommerce Website Stocked with 200, 000 DropShip Products. Free Hosting and Free Domain Name! | Discover The Secrets Used By The Experts To Make Tax Free Profits From Spread Trading/ betting From Home, In Just 5 Hours A Week. | Fake And Break Stock Trading Pattern For Stock Traders. | Cnbc Million Dollar Portfolio Challenge Contestant Beats 254, 000 Other Stock Traders And Wins $500, 000! Now You Can Literally Copy His Exact Trades And Safely Make Money Month After Month. Easily Double Your Money! Stunning 92.4% Accuracy. | | Do U skaDoogle? |
Also Recommended
Loading...
|
