If you are earning, always make it a rule to invest a part of your income. Make it a habit and think of it as ‘paying yourself’. Investing is your future. Because of the recession the amount of money you are able to invest may be limited and you may be wondering what investment options are available to you when money is tight.

There are a few steps to take like setting a budget. You may even find more money to invest than you think during the process! Note what you owe for your mortgage or rent, healthcare, car payments, insurances, your utilities, groceries, and any outstanding debts. Make an allocation of where your money is to be paid. And always make sure that your monthly commitments are covered.

Although the usual recommendation is to tuck away 10% of your income into a savings or retirement account this may not be possible, depending on your circumstances. But no matter how dire your financial situation seems it is necessary to start a retirement account. Saving for your retirement is a top priority. And if your employer offers retirement funds take full advantage of this.

Retirement Investment in the USA

In the USA there is the 401k fund for retirement. Investing through an employer’s plan has several advantages such as the tax benefit for doing so, this is because your contributions are deducted from your pre-tax income and taxes are deferred. Many employers match contributions made by their employees, so you effectively get free money. Most 401k plans have mutual fund (managed funds) options where investment minimums are waived.

If you are self employed there are other options available such as the special retirement investment options in the US of SEP-IRAs and Keogh plans which allow you to contribute a considerable amount of your pre-tax income.

Retirement Investment in New Zealand

In New Zealand there is KiwiSaver. The minimum requirement is to invest 2% of your income but your employer must also match this contribution so you are doubling your money and effectively getting a pay rise. There is also a one off kick start payment of $1,000 from the Government which is a nice start to your plan. Not only this but each year the Government matches your contribution up to $20 a week or a maximum of $1,042 a year. You can choose among a range of KiwiSaver providers to match your needs and risk profile. When you start a new job you need to opt-out of KiwiSaver otherwise you will automatically be enrolled, but if you have been working and not contributing you need to opt-in to start investing.

Once again in New Zealand KiwiSaver is available to the self employed however there is obviously no employer contribution. As your income may be erratic you can nominate the amount you want to contribute. The best is to at least deposit $20 a week to take advantage of the tax credit of $1,042 a year. This way you double your money.

Other Investment

Both in the US and in New Zealand you are able to invest as little as $50 or $100 a month into some managed fund (mutual funds). The advantage of these funds is that it gives you the opportunity to spread your investment into various areas even though you are only depositing a small sum each month.

Whatever your circumstances you owe it to yourself to find suitable investment options even when money is tight.

By: Lyn Bell

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What are all of the options? I’m seriously an investment newb. All I know is CD and Money Market, and I don’t honestly know how those even work.

By: philipthrasher

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Investment is the expenditure on physical assets which are not for immediate consumption but for the production of consumer and capital goods and services. Investment has two related meaning, it could mean the actual production of real capital in economic theory such as building of new factory, purchase of new vehicles, etc. And it could also mean in financial term, the deposit of money in bank, purchase of stock or government securities etc.

Factors which determine investment include the following:

1. Savings: The amount of money saved determines, to a large extent, the level of investment.
2. Level of income: The higher the income earned, the higher the level of investment and vice versa.
3. Rate of taxaton: Higher taxation on one’s income reduces investment and vice versa.
4. Interest rate: High interest rate charged by banks discourages borrowing, which leads to low investment while low interest rate encourages borrowing leading to high investment.
5. Future expectation: When an investor expects a brighter future, this will encourage him to invest.
6. Business atmosphere: Investors are more interested in investment in a stable economy than those with economic instability
7. Changes in technology: The level of investment is greatly influenced by changed or improvements in techniques of production through inventions and innovation.
8. Changes in level of consumption: A high level of consumption generally leads to low investment and vice versa.
9. Profit earned: high profits earned by individuals or firms do encourage investment while low profits discourages it.
10. Political climate: Investment thrives in a politically stable environment while investment is reduced in places with political instability.

The various forms or types of investment are: the individual investment, the corporate investment and the government investment. The individual investment is the type embarked upon by a household or an individual in order o increase his income and raise his standard of living. Asides his salary-pay job, he could have an agricultural investment where he sells poultry and poultry products, fish, cattle and diary products; or could invest in motor vehicles or real estate etc. Corporate investment on the other hand includes investments by companies and other organizations with the sole aim of making profits. Examples include investment on plants and machinery, buildings etc. Government investment is setting up of corporations with the sole aim of providing essential services rather than making profits, eg. provision of electricity, water, health care services etc.

By: Funom Makama

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Investment is a term which is generally used by those who have surplus amount of money that has been left after fulfilling all of daily needs. However this is a very general definition but from business point of view, investment is something that will give you more output in the future if you spent some money at present. Generally there are two types of investments. These are long term investment and short term investment. The basic difference between both of them is the duration which is fixed and after which, the output is likely to be obtained in more expanded form. If we talk about short term investment then it is concerned with small duration. In general language, It is said that if you want to make good amount of money in small duration of time then this type of investment should be given priority. Example of such type of investments are investment funds, treasury bills etc. However, long term investment is concerned with the investment in which output is likely to be obtained after long period of time. The example of this type of investment is recurring deposit, retirement plan for future etc.

If you are saving your money from the current expenses and wishes to make some investment so as to get some expanded output in the future in the form of retirement fund or for your children’s education then you should not go at those place where you may be deceived financially. However you can simply choose some of the secure paths that will surely provide you with some well-brought-up output in the near future. Hence in such case long term investment plays a vital role as numbers of schemes have been opened by government bodies along with some private bodies. The basic scheme is concerned with the purchase of one bond issued by government. According to the type of your purchase bond, your initial investment ill grow up over time and at last as soon as your bond collapses, you get the entire amount as a lump sump that you can simply bring in any use. Mutual fund is another type of secure scheme under long term investment. This is basically concerned with the purchasing of stocks or bonds by putting money together from numbers of peoples and then it is the responsibility of fund manager to manage all the investment and also to figure out the appropriate method in which the investment can be done so as to get maximum output.

However, short term investment is something that brings about an output against your invested money within a short span of time. However, this period may be varied from one year to ten years. Also these types of investments are very rare and difficult to find as these are likely to be associated with higher rate of interest. For an ideal short term investment, interest rate has to be higher because firstly it gets you the return amount in the form of out and profit within short duration of period and hence higher rate of interest need to be paid to the company so as to reach some profit to the company as well otherwise that company will go into the hell.

By: Shane Waatson

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Investment in rental property can be a risky proposition if the investor has not done his/her homework. But for the investor who has taken the time to research, it can be very lucrative. Probably the one thing most investors want to know more than any thing else is how they can become wealthy in the shortest period of time investing in rental property.

Most investors are busy concentrating on flipping single-family houses, when they should be concentrating on investing in multi-family units. With a single-family house if you lose the renter you have lost 100% of your income, which could be your profit for an entire year. If you have a four-family apartment and lose a renter, you have three other families giving you checks to pay your expenses. The bottom line is cash flow and cash flow is greater with multi-family units than with single-family units.

Let’s talk economics. If you have invested in several single-family rental properties you will more than likely have to travel to several different locations to collect payments, or to check on the property. With one multi-family unit you save time, gas and wear and tear on your auto by only having to travel to one location to collect several payments, or to check on your property. With today’s economy it could cost from $2000-$7500 depending on where in the country it is situated and the size of the house. Multiply that by six and you’re talking a very large amount of money. Repairing a six-family roof would cost between $5000-$10,000. You do the math.

There are a lot of real estate guru’s with infomercials abdicating the money to be made from flipping houses. They make it seem easy. But have you ever watched some of those programs on TV? Watch ‘Flip that House’ sometime. You will soon see it can be very costly rehabbing a house, especially if you don’t check the house exceptionally well before buying. Not only costly, but very time consuming. Not to mention the different contractors you have to deal with. That’s another problem; taking the time to interview and research all those contractors. After all, you want someone who knows what they are doing, don’t you? Once you find a good contractor and he has done work for you, don’t think they will always be ready to jump when you call them. After all, they are business men and they can’t sit around waiting on your calls. They have other irons in the fire like all good business people.

Don’t get me wrong, investment in rental property is a good business. Single-family houses are good investments. But they can also be a means to investing in apartments. If you know of anyone who is making money flipping houses, odds are good that he or she also has some apartments in their portfolio. Flipping houses is fine for the person who wants to do it, but investment in rental property is the better investment. And there is a huge market for apartment investing. After all, the guru’s are teaching everyone to invest in single-family houses. Investment in rental property is a sound business. Good luck.

By: Candis Reade

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Inflation recently has reached unfriendly rates. The meager interest returns in the banks thus subjected to high inflation rates have caused investors to start looking for new avenues to park their hard-earned or excessive cash. There are various ways to do that. The main ones are either lending investments or ownership investments. Lending investments include bonds, treasury bills. Ownership investments would cover small businesses and real estate as well as company stocks.

However, all these investments are not risk-immune. For lending instruments, if the company that you have lent your money to goes bankrupt, either all or part of the money will be lost in the process. Of course, not forgetting that climbing inflation rates may reduce the values of your lending purchases tremendously as the returns on these bonds or treasury bills are only slightly higher than the interests on the deposits in the banks.

Ownership investments like small businesses and real estate are still safer bets for investors. There is still a considerable amount of money to be made in these areas. Shares or stocks of a particular company become completely worthless if it closes down or is bankrupt. Furthermore, a myopic view on the investment of stocks may be detrimental for many, not forgetting the immense amounts of time and energy used to monitor the shares.

We are always looking for diversifications for our savings. Investment-linked policies are one of the safer avenues which also give higher returns than banks or bonds. They are described by some as the hybrid of hybrids between lending and ownership vehicles. It allows for diversification of savings. People who have savings earmarked for a longer period of time might consider this mode of savings. Investors either inject their savings at regular intervals or in a single lump sum. As nothing comes for free, a small part of the investor’s money will go into insurance. The balance, depending on the insurance company, goes into investments. Most insurance companies today will invest in mutual funds which are professionally managed, thus requiring no effort whatsoever on the investor’s part to monitor the performance of these funds, including buying or selling. Usually, the insurance companies have already picked out the “elite” funds from the vast jungle of funds. Currently, the main types of funds available in the market are money market, bond, stock, global, index or specialty funds.

Selecting the funds to invest will be much of a headache. Be sure to read the prospectuses and yearly reports of the funds. The funds’ investment objectives, performance history and costs will be summarized in the initial pages of the prospectus. Some advisors in mutual fund companies, when you require assistance, will be selling the funds which give them higher commissions. They will be encouraging these funds even if the returns are not as good. This differentiates the advisors in most insurance companies. Insurance advisors will not be pushing funds which pay them well as the commissions earned are from the policy itself, not the funds. Insurance advisors, who are savvy, will be recommending better funds. True enough, the advisors get paid commissions through the invested amount of customers, but there are companies which are giving the advisors commissions without using the money injected by the clients. There will instead be a lock down period of the money. The investment returns will thus be higher too as historically, the interest rate returns for investments, increases with the longer time period, as a hedge against market volatility. Since we are already at this topic, I shall let you in on a little tip. If all the funds’ performance seems to be good, divide the allocation of the funds equally. This process will usually pay dividends to investors’ wallets.

Other than the considerable returns that the funds invested will give, the policy, as mentioned earlier, provides the holder with insurance as well. This can be used as a guaranteed investment return because the amount of coverage would have been agreed upon, at the start.

As you may have already guessed, other than the insured amount, the returns on investments are not guaranteed. That is where the advice of the professional financial consultants will come into play. Unless there is a portfolio change, in the long term, the investor will be able to enjoy good dividends on her investments. For investments at regular intervals, dollar cost averaging (DCA) plays a very powerful part in ensuring good returns. In a nutshell, DCA means lowering the average cost of the funds over many years and getting good returns after the investors sell the funds after a number of years, not months.

To beat the ultra-low returns from banks, this is one of the best bet for investor’s money. In any case, inflation will also erode the value of money put away in a bank.

Financial markets will usually reward investors for accepting risks and uncertainty. Investors who are also willing to wait for a longer period of time will never be disappointed.

Investing through investment-linked policies is one of the better avenues to diversify your savings. Why not invest and pay yourself first? In the long term, you will be rewarded for your patience.

By: Benji Foo

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The stock market should present you with a wide variety of NEW hot stocks in 2009. Many of them are going to be new technology stocks that come from the nanotech, biotech, financial, energy, healthcare & communications sectors.

Most of them might seem promising, but the truth is that a good number of these trading & investing opportunities could be extremely risky, while others are simply not as good as they look. That’s why it’s very important to know how to choose among the best especially if you want to day trade them.

When you know how to pick and approach the best hot stock trading opportunities, you are able to generate a consistent and respectable amount of money in a very short period of time.

Experienced day traders recognize that trading hot stocks on momentum can be the fastest way to make money in the stock market, especially on uncertain times like these.

You don’t necessarily have to trade momentum hot stocks all the time. But you can learn how to take advantage of them when you encounter the best opportunities for going long or for shorting them to make money when they are poised to fall down.

If You decide to day trade stocks just keep always in mind that for a trader to survive and be consistently profitable, its necessary to keep things as simple as possible. To much confusion and technical indicators will most of the time make you slow in your decisions and froze you up when a good opportunity is right in front of your screen.

In the end, stock market day trading is all about picking the best daily stock opportunities and following your buy and sell signals with ease and simplicity. Once you learn to master your trading decisions, you can aspire to produce consistent profitable results.

By: Stock Investing

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