Four Things to Consider Before Investing in the Financial Markets

Four Things to Consider Before Investing in the Financial Markets
Are you ready to make money in the stock market? Investing
is an important step towards building your personal wealth,
and there are many things to consider before you begin.

Your present financial situation

You need to begin by evaluating your current financial
situation. Consider your assets, your liabilities, your
total household income and the amount of discretionary
income that you have available to invest on a monthly
basis. Your discretionary income is the income that you
have left over each month after you pay all of your
household expenses. Next, you need to evaluate your current
level of cash reserves. Cash reserves can be defined as the
assets set aside in the case of an emergency or for an
opportunity. An example of an opportunity would be a great
investment, a real estate property that you want to buy or
a great vacation discount that you want to take advantage
of. It is recommended that you keep between 3-6 months of
your total household expenses set aside as cash reserves.
The other factor to consider is the level of your personal
protection. Your most important asset is your ability to
earn an income. Protecting yourself, your home, your
vehicles and your family is important. Evaluate your levels
of insurance coverage to determine whether it is sufficient
to cover your present needs.

What are you saving toward?

Everybody saves for a purpose. Some people save to ensure a
better retirement. Some people are saving to buy a car,
home or a new boat. Some are saving to ensure that their
children have a great college education. Before you begin
to save, sit down and think about all of your goals, and
then prioritize them based on personal importance. Ask
yourself whether these goals pass the acid test. The acid
test asks if you would be willing to do whatever it takes
to achieve these goals. For example- Would you reduce your
lifestyle and expenses to save more money if it would
ensure that you reached your goal? If a goal does not pass
the acid test then you should remove it from your list.
Next, define each goal with a time frame and an amount. For
example- I need to have $50,000 saved for my oldest son by
2010 to pay for his education, is a clearly stated goal.
Once you have defined your goals, determine the dollar
amount needed to save to achieve them and the length of
time you have to save for them. These factors will be taken
into consideration when making your individual investment
selections.

Do you understand your investment options?

Consider investing into mutual funds if you are a new
investor into the stock market. Mutual funds are comprised
of multiple individual stocks or bonds and usually offer a
smaller initial investment amount to be contributed on a
monthly basis. This smaller dollar amount makes it possible
for a variety of investors to begin saving into the stock
market without large sums of cash already set aside.
Understanding stocks, bonds, mutual funds, real estate
investment trusts, cash value life insurance, annuities and
trusts is an important place to start when you are a
beginning to invest. Research each investment option to
determine which combination will best assist you in
reaching your financial goals.

Define your Investment Risk Tolerance

Now that you have an understanding of the stock market, you
need to determine your personal risk tolerance before you
start to invest. Your risk tolerance refers to the amount
of variance you are comfortable with in your portfolio, and
is often defined by how far away the goals that you are
savings towards are. Investors are typically categorized as
Aggressive, Moderately Aggressive, Moderately Conservative
and Conservative. Each investor type is characterized by
their investment portfolio, their time frame to save, their
expected portfolio returns and their overall tolerance to
withstand portfolio value changes on an annual basis.

These are the most important things to consider before you
invest into the stock market. Having a financial plan that
you implement will increase your chances for financial
success.

This is not investment advice. Before implementing any
investment strategies, consult your financial advisor or
financial professional.

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There's A Silver Lining In The Clouds Of The Nationwide Mortgage Mess

There's A Silver Lining In The Clouds Of The Nationwide Mortgage Mess
It's a cloudy and murky storm now hovering over the once
clear blue skies of the real estate market. Due to the sub
prime and adjustable rate fiascos, foreclosures have
dramatically increased and home values nose diving like
huge drops of descending rain and creating a mortgage mess.

Here's the current real estate weather report. Foreclosures
increased by 75% in 2007 with more than 2.2. million
filings nationwide. The largest clouds hover over the
states of Nevada, Florida, Michigan, California and
Colorado respectively, with California alone having a
record number of 481,392 foreclosure filings. 2008 is
expected to follow suit and will likely be more ominous
than 2007.

As foreclosures increase, more homeowners are feeling
desperate and discouraged. Authorities in economic stressed
cities like Detroit, Michigan see a correlation between
pending foreclosures and homes burning. The conclusion is
arson is on the increase due to motivation by stressed out
homeowners to fix their situation by torching the premises
and hopefully cashing in on insurance proceeds and
relieving themselves of going through the foreclosure
process.

The mortgage meltdown has caused some neighborhoods across
the nation to be plagued with blight because homeowners,
unable to make mortgage payments because of bad or ill
advised adjustable rate loans that have caused their
payments to balloon beyond affordability, have abandoned
properties leaving them vacant and becoming havens for
insect infestation and stray animal hangouts.

Some homeowners, angry over the whole muddy mortgage
situation, have taken it even further by deliberately
causing damage to the property before they abandon it by
leaving water running and creating mold and mildew problems
or just physically destroying portions of the home.

Currently, the FBI is investigating 14 companies related to
the mortgage crisis on claims of mortgage fraud, SEC inside
trading and other alleged illegalities associated with the
sub prime real estate market.

The Mayor of Baltimore, Maryland sued Wells Fargo Bank on
claims that the bank is guilty of "reverse red lining"
actions - making deliberate high risk sub prime loans in
minority neighborhoods under circumstances that the bank
knew or had reason to know would fail. This is the opposite
argument made against banks years ago when they were found
guilty of drawing a red line around areas that they
deliberately would not make loans in - predominately ethnic
minority neighborhoods, hence the term redlining. The Mayor
claims minorities hold more than 60% of the adjustable rate
loans made by Wells Fargo and now the majority of those
loans are failing and the foreclosure grim reaper is taking
its toll.

The above facts provide more than enough evidence to
support the premise that the real estate industry is caught
up in a stormy situation. The dark clouds of sub prime
failures and the gale wind force of foreclosures make the
future look bleak and dim.....But, there is a silver lining
amidst all the dark clouds.

Where's the silver lining? The evidence is beginning to
show itself already. There is and definitely will be good
times ahead for the real estate market sooner rather than
later. It depends on the lenses you're looking through.

Interest rates on federal funds dropped to 3% on January
30, 2008. Mortgage rates are reacting and starting to fall
too. This will prompt more refinancing and help many
homeowners that can still refinance troublesome adjustable
loans into 30-40 year affordable fixed rate loans thus
avoiding the likelihood of future foreclosure or other
financial problems.

Congress is contemplating and most assuredly will make
legislation or regulatory changes in the maximum amount of
the loans that can be acquired with FHA insured backing.
The current loan limit of $417,000 is unrealistic in the
current market. The democrats are seeking loan limits of
more than $700,000. The Republicans suggest limits in the
$600,000 range. The obvious observation here is that both
parties agree the $417,000 limit must be raised. Once that
happens home buyers will be able to access more loan funds
and buy houses that are not available right now.

Home prices are down and new home sales are at a record
low. Sellers are very motivated and willing to assist
buyers with financing. This all adds up to A BUYER'S
MARKET. That's the silver lining.

Home buyers, especially first time home buyers will be a
huge factor in weathering the storm of the mortgage mess.
The winds of change are upon us. History will repeat
itself. Out of the dumps of the real estate market the
proverbial Phoenix will rise.

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Roy Landers, attorney and successful real estate
broker/investor teaches how to stay informed on what's
working and making money in the real estate market with
FREE content from The Real Estate Playbook. The place where
savvy home buyers, sellers and investors gather information
to build a solid financial foundation.
Housing America, Inc.
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Email: roylanders@housingamericans.com

Abandoned Properties: Locating the Owners Part II

Abandoned Properties: Locating the Owners Part II
Last month I told you about the opportunity abandoned
property can represent as a new investment strategy.
Knowing that these properties exist is only half the
battle, especially if you don't have a clue as to how to go
about locating the owner. While the owner's can sometimes
be difficult to locate, if you're willing to put on a
detective's hat, you can usually locate them fairly easily.

Once you have located your target property, take a walk
around the yard and look for any clues that may have been
left behind by the owner. Many times the yard will become
overgrown and you may discover a for-sale sign lying in the
yard with a telephone number on it. You might also look in
the window next to the front door for legal notices.

Another strategy you can use is to speak with the next-door
neighbor. Explain to them that you are a real estate
investor that is possibly interested in purchasing the
property. Ask if they happen to know how you might be able
to go about getting hold of the owner. If you have a
business card, give it to them, because this can build
credibility for you. They may not know how to reach the
owner of the property, but a lot of them know much more
than they're willing to tell you. By leaving your card you
give them a means of reaching you at some point in the
future if they discover the whereabouts of the owner, or
later learn how to reach them.

In addition, if they do know where the owner is, they may
not want to tell you for fear of violating a friend's
trust. If they have your card, they have ample opportunity
to contact the owner of the abandoned property to let them
know that someone is trying to reach them. You may wonder
why a neighbor might be secretive about the actual location
of the owner. It's really simple: if the owner has walked
away from their property, they know that the bank will
eventually be trying to reach them. Furthermore, they may
be experiencing other financial difficulties as well. If
this is the case, the neighbor may just be trying to
protect them from bill collectors or process servers. In
any event, by leaving your card you do make it available
for the owner to reach you.

If your efforts to reach of the owner through the next-door
neighbor or other nearby neighbors don't yield results, you
can always venture a trip to the county courthouse for a
manual records search. This can be somewhat
time-consuming, but when you're done, you will have the
name of the owner. With this information in hand there are
a couple of other strategies you could implement.

The first is to go online to www.reversephonedirectory.com
and fill in the information that you do know. It'll cost
you a few dollars, but it may very quickly yield results in
the form of a telephone number you can use to contact the
owner of the abandoned property. If that resource fails to
pay dividends, there are other resources online as well. A
simple Google search may tell you what you need to know.

Another way you can try to reach the owner of the abandoned
property is by putting the power of the US Postal Service
to work for you. Simply address an envelope to the owner
of the abandoned property and mark the front of the
envelope "Address Correction Requested". Once you've
ensured that you've put your return address on the
envelope, mail it. When the Postal Service sees that
you're requesting an address correction, they'll send you a
postcard with the owner's updated address if they have one
on file.

These strategies aren't guaranteed to locate the owner of
every abandoned property, but they'll usually yield results
more than 90% of the time. Once you locate the owner and
make contact with them, you can present a creative offer
that will not only solve the owner's problem, but will help
you to expand the size of your own real estate empire. You
can utilize traditional or creative investment strategies
at this point. Because the owner has his back against a
wall, he's usually willing to entertain any idea that will
solve his problem, especially if you can help his problem
go away with minimal pain. Whatever approach you utilize,
abandoned properties are an excellent means of taking
advantage of investing opportunities that you may have
previously overlooked.

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Mike Lautensack is a real estate entrepreneur and creator
of the Private Lender PowerPoint Presentation Kit. This kit
is loaded with tools and techniques to attract a consistent
stream of private investors. To learn more about this
powerful step-by-step kit go to
http://realestatewealthtoday.com/page2.html