5 Ways to Real Estate Investment

1) Before you going to choose the dream house for your investment, remember that you must have the money to make the purchase. By lending, you must not allocate more that 1/3 of your own income to the borrowings every month.

2) After you have determine the borrowings and the amount of cash you have to put in, have a search at your area first because this is the place you understand the most compare with other people. Remember that don’t get caught of the “obvious prospects for physical growth in the property because it does not necessary translate into obvious profits for you”.

3) Now after you have your properties, make sure it is below the market value before you purchase. Remember that the higher you pay the lower return you will get.

4) You also must make sure that the area of your properties is 90% occupied. Therefore it is easier to get a tenant for your properties. You also don’t wish to buy a property which the area is deserted and can’t rent your property out.

Remember to prepare yourself for the worst and pay all the expenses of your property if there is no tenant.

Choose, Use & Fight Debt with Credit Card

Credit Card is Use because:

• Convenient that can help the user to avoid bringing large sum of cash when making a huge purchase.
• Internet transaction because the payment can be made within minutes
• People use credit card to symbolize their status
  

How to choose credit card?

• Choose a credit card that is widely accepted such as Visa, MasterCard, etc.

Credit card companies or banks usually advertise their cards by giving free gifts or they are having interactive marketing strategy by showing “1.5% per months only”.
Don’t get caught of this statement because
1.5% per month X 12 months = 18%
And the effective rate will be 19.6% including the compound interest yearly.

How to reduce credit card debt?
1. Allocate an amount of reserves for about 50% of your expenses to avoid using credit when there is an emergency.
2. If the amount is too large to repay or it is necessary, you should borrow a personal loan to cover the credit card debt first because personal loan may have a lower interest rate compare to credit card.
3. Don’t increase the emergency funds or invest first before fully repaid your credit card debt.

Remember when using credit card, think about whether you can repay it and pay the bill in full instead of the minimum balance.

Credit cards bring Pros and Cons to the users and you must choose the right credit card and use it effectively without hurting your own financial stability.

Dollar Cost Averaging to Invest Successfully

Now we are having financial crisis which we often think that

• When is the best time to enter the market?
• Whether u can have a good entry and earned a favorable return for your investment?

How this method works?
Instead of invest a lump sum of money in a particular investment, the investor can allocating certain amount of funds for a certain period such as every month to invest on a particular investment.

Advantage
It spread the investment over a number of period which providing insulation against the risk such as the changes in market price.

Disadvantage
Requires investor to give up some expected return of benefit which when you can enter the market in a lower price.

Setting Up Your Own Dollar Cost Averaging Plan
1. Select the time horizon on how long you wanted to keep up with the dollar cost averaging
2. Decide exactly how much money you can invest each month
3. Select an investment
4. Decide the regular intervals such as weekly or monthly

An Example of a Dollar Cost Averaging Plan
Company “A” Shares (Invest date, Amount Invested, Shares price, Shares purchased)
Jan 2009, RM 2000, RM 10.00, 200 shares
Feb 2009, RM 2000, RM 8.00, 250 shares
Mar 2009, RM 2000, RM 12.50, 160 shares
Total RM 6000, RM10.17(Average), 610 shares owned

When the economy recovers in April, share price recover to RM 13 per share and you have earned RM 2.83 per shares.

Dollar Cost Averaging does help reduce market risk and you can take the opportunities to invest and set yourself up with a dollar cost averaging plan and get going.

What is Common Shares?

Common Shares are representing equity ownership in a corporation, providing voting rights, and entitling the holder to a share of the company's success through dividends and/or capital appreciation.

In the old days when we traded shares, we will receive a share certificate but with the advancement of IT, it has been eliminated. This is the example of Share Certificate:

The minimum of shares we need to invest is 1 lot that is 100 shares.

Most of the time people think that the more we have is the better and actually
“It is not how much of shares u own and is actually how much % of the company u own”

Calculation:
If u have RM 2000 to invest

Company A: (Share Price=RM 2.00 Volume=20Million)
U can get 1000Shares=10lots
By taking the market capitalization (Share Price X Volume) = RM 2.00 X 20Million = RM 40Million
Amount invested/ Market capitalization = 2000/40M =0.005%

Company B: (Share Price=RM 20.00 Volume=1Million)
U can get 100Shares=1lot
By taking the market capitalization (Share Price X Volume) = RM 20.00 X 1Million = RM 20Million
Amount invested/ Market capitalization = 2000/20M =0.0110%

The % u has in company B is higher although the lots u have is lesser.
Remember that having common shares means that u are one of the company’s owner and it is determine by the percentage u r having.

2 Myths that Hold U from Investing

A lot of people think that investing (share, property, etc.. ) is

Myth 1: Risky
Most of the time is that these people have been stereotype or their family or friends may have lost huge amount of money in the share market especially during the financial crisis.

Myth 2: Gambling
People know that they can’t control the market (recession) so they taught they can only using the guess work to do it just like gambling. Maybe they are lucky they can enter in a lower price and get a favorable return.

Let me give u an example:
By driving a car with a car license, it is less risky than those who didn’t even drive a car before. Once u have gone through training and have the license, do u think that driving a car still risky? Do u know how to make a turning, and the magnitude of it?

Answer: Driving is still risky but it has been minimized and u surely know how to make a turning.

That’s why if u have the knowledge, investing is not gambling and less risky.
Warren Buffet Philosophy:
Risk comes from not knowing what you're doing

Valuable Guides for MoneyUsers Enrich in Life

Hi… Money Users Blogspot .com here, which I wish to share that how $$ can be allocated and used in our daily life such as putting your money in various investment instrument such as property, opening your own company, commodities, mutual funds, etc… & How to get and manage the little $$ u have.

“The rich get richer and the poor get poorer” proverb that frequently use and especially now (Recession) we can see that the lower income group struggle to survive while the rich has the hard earned cash to invest in this economic downturn and when the economies is getting better, we know that with the amount of $ the rich has invested surely will get back a favorable return which we can observed Warren Buffet as an example.

• Thinking of how u can earn your desire income every month and live your desire lifestyle?
• Know how to manage your money and keep the $ working for you?
• Wanted to just sit down and waited to get paid by the passive income you generated?

All these are the desire we wanted or even more which we are POSSIBLE to achieve it.
It is possible to break through from a lower income group to RICH which the things we required are knowledge and discipline to do so.

The things I explain may have come so easy for some people and I just hope that there are people that can gain some knowledge here to become financially literate.
In this site I have some poll added which I hope u will participate and if u have any questions or comments feel free to leave me one.

Welcome to Money Users !!