Sunday, July 27, 2014

Investing money

Saving money is not investing. Investing means taking risks with your money to make it grow for medium to long-term goals. Saving is a way of accumulating money to invest or to meet some short-term goals. With savings you are building up your resources; with good investments your money is working for you. With saving, your money normally earns interest, often nominal interest below the inflation rate. Investing means seeking total growth of your money, which includes, importantly, capital gains. How to invest money requires you to follow some basic rules. Any investment program will be successful if you follow these rules and apply them as a whole. The rules are not sequential so the order is not important.

As a new investor you have been investing money as follows in regard to investments basics, high liquidity, high safety, no real growth, small income, with no tax breaks. This means that you have easy access to your money without penalties, have very little if any risk of loss, are making small returns, are receiving income you don't really need, and are paying income taxes as you go. You can make a lot of money by investing in real estate. There are several strategies to make money from real estate. Flipping homes by buying low and selling high is one method where you really don't have to ever take title to the home. You contract to purchase a home and line up another buyer to actually attend the settlement, buy the home and the owner gets his asking price; the new buyer you lined up pays what you bargained for and you take the profit. This technique also involves options, where the contract you have with the owner has an option to sell to another buyer. But that is just one technique how to make money from real estate. Many investors are also making fortunes in home foreclosures. It's certainly sad to see someone lose their home but for the real estate investor looking to make money from real estate, home forecloses can make you millions. Many investors choose to purchase homes that can be rented out and have steady rental income while others simply buy low to sell high. Either way anyone can make money from real estate. It just takes a little knowledge and your best investments of time.
Investing in real estate can be a great idea if you know what you are doing. Study the marketplace and get a sense of how the market will respond to your home. Take a look at the prices of similar homes in your area and prices that they have sold for.

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