Another prime rate cut is comming
Well if you did not start a refinancing process when I suggested it before you may want to hold a few more days for a bit lower of a rate. Everyone is expecting yet another slashing of the prime rate after the Fed’s meeting at the end of this month. I don’t predict another big cut and while the media is using the term “slash” I think we will see perhaps another 1/8th - 1/4th. That won’t mean a ton more then the last cut already meant but it will make a difference to some who are on the “edge” of making mortgage refinancing a good decision.
To me the real opportunity here is for real estate investing. Loans are lower then any time in history and houses are sitting by the butt load. Right now is a great time to find an incredible deal on investment property. It is however not a time to be stupid and go into highly leveraged deals. What you are looking for right now is a property at 10-20% under even the current depressed value, a property that you can afford to have for a year to 18 months with out a tenant and still have no financial grief.
This is a big part of why the rich always get richer. If you are in good shape money wise right now and can afford 1-3 small properties in this fashion you stand to make very big investing returns in the next 5 years. If however, you are dead broke or swimming in debt you just have to sit back and watch all these great deals sit. This is a very bad time to be in the property flipping business. With the massive inventory out there, suppressed market and probably a 2 year recession ahead it is a great time to be buying the best deals you can find and afford, holding on to them and renting them as you can.
This is exactly why I always say the reason to build wealth in many ways is to live good in bad times.
Filed under Wealth & Investing | Comment (0)Four things I would start doing online to make money as a newbie
It seems like forever ago when I first built my first website. In fact it was more then 10 years ago and at times it is easy to loose touch with how overwhelming it is for a brand new potential internet entrepreneur who wants to get started today. So I though I would share four ways a new person can begin to get started. None are all that hard but none can be complete with out learning more, these are just starting points.
1. Get a blog and do some blogging for dollars. I suggest you try not to be to obvious about this because Google has begun to give the smack down to bloggers that do this. I recommend you never use the name of the companies that you go through to find business on your blog as you are just asking for problems. What I can simply say is go to google and search for “get paid to blog” and you will find many options.
Now you are going to have to blog for about 90 days and do so at least 4 times a month to qualify for these types of services. Once you do however, you can and will make money. I won’t go deeper right now but will make some specific how to details available in the future. Let me just say that anyone that wants to can put an extra 500-1500 a month into their income column can just by doing this.
2. Learn the very basics of website design and publishing, even a tiny bit of say PHP programming can go a long way. Today if you can slap together a website you can make some money. Spend the money for a good design software and take a course on it at a community college or a CEU class at a university. Total investment may be about 1,000 dollars and it may make you a lot more then any degree will. You don’t have to be a great designer but at least be able to build simple sites, you can out source the actual “graphics” work.
Most sites are nothing but a header, a footer and some pictures. Outsource your graphics and build a site. Make your first site about something you just love to talk about and don’t worry if you make a dime on it. All you need at first is the “ability” to build and design sites. Learn how to do it and do not rely on site builders they are to limiting. Today if you can publish content there are countless ways to make money. Oh and you can pay your tuition with one months worth of blogging with suggestion number one above.
3. Start with affiliate marketing and take your skills from item two to build unique websites that provide information, build email lists and sell a few products around a niche. Later you may and honestly should create your own products and keep all your profits but in the beginning you are learning how to market and sell online so dedicate all your efforts to doing so.
A great source of items that others have made that you can sell for about a 50% commission can be found at Click Bank. Odd are there is a product about any subject you can think of. Most sell in the 50 dollar range and pay about 25 dollars in commission. You don’t have to make anything, deal with customers, etc. This is not a long term way to get rich but it is a great way to learn and earn at the same time.
4. Become an adSense Affiliate and a Yahoo Publisher, neither pay the big money they used to but they are both very passive ways to earn some extra money. In time with enough sites anyone can pull in a hundred dollars a month at least. Remember invest 100 dollars a month from age 18-65 in quality funds in a tax deferred or sheltered account and you are a multi millionaire.
The key with adSense and Publisher is make your ads blend into your sites. The inexpensive wine site I reviewed a few days ago does a good job at this. Use back ground colors that match, make the links the same color as links on your site and above all no borders for the ads. Then be sure to put the ads in prominent spots on your site, don’t hide them remember you want people to click on them.
So there you go 4 places to get started with making money online. Each has its on benifits and challenges yet if you commited to learning how to at least do all four in the next 6 months you are well on your way to truly building a solid and passive online income. In time you out source more and more and you don’t do all the work yourself. Yet in the beginning it is important to be sure you understand things, learn what you want and what you don’t want.
More then that learn to make some money asap and again bloggin for dollars is a 100% guaranteed way to start the income flow. From there you can branch out, learn more and keep building.
One more important thing. Don’t buy over priced crap, info courses and other bullshit. There are countless gurus out there, well countless self appointed internet marketing gurus that claim to have the secret to making money. They are mostly full of crap and even the ones with good info unless you learn the fundamentals first it won’t do you any good.
Start with free advice and perhaps use some of the online video courses that don’t cost to much. Learn basics, learn “how to” and then you can develop “what to” on your own terms. I promise you one of the surest ways to kill of your future in making money online is buying one to many 297 or 997 dollar how to courses.
Don’t buy that crap, start with a blog, learn to make sites, practice with affiliate products and sell ad space along the way with Google and Yahoo. Look for solid how to advice and instruction and limit your spending on “education” to 50 dollars or less a month (other then stuff like the college course I mentioned) and you will in time work things out. Gurus exist not to make you rich, they exist to enrich themselves with your dollars.
Filed under Business & Marketing | Comments (2)Teaching kids to invest and think smart about money
I know a lot of adults that are doing what they can to teach kids about investing and saving money. The most common way is the good old fashioned piggy bank. There is something to be said especially with younger children to putting some change in a piggy bank. It is a good start but it is also quite limited. With the good old pig you always can open him up and raid the savings and the savings lack any type of leverage. You earn no interest and little Johnny’s or little Dorothy’s pennies end up worth less ever day, unless they are solid copper that is.
My view is it is important to have kids open their first bank account as soon as they are old enough to grasp the concept. A Roth IRA with some monthly contributions should be set up by age 12 and money should be discussed from a positive outlook. Don’t teach your children things like, “money is the root of all evil” as that is not the proverb anyway.
People that do well with money come from homes that discuss and value money. Now of course you must teach ethics, family values and over all life lessons as well. Your kids shouldn’t worry about money or believe it is the end all be all. Yet they should understand it and its power, both good and bad and you should teach them the Building Wealth Philosophy as early as possible.
One of my favorite books for parents helping kids learn to invest is Rich Dad Poor Dad for Teens The Secrets About Money–That You Don’t Learn in School! To me this book is an absolute must read.
One way or another make sure you are making things like money, avoiding toxic debt, savings and investing positive topics of discussion with your kids. I am not saying your kiddos first words should be leverage and interest over mamma and dada but you get the point.
Filed under Personal & Home | Comment (0)A different kind of real estate investment
As anyone who knows my true identity could attest to I dearly love to hunt and fish. For many non hunters it is hard to understand how much hunters truly love the animals we hunt. In fact an non hunter would be surprised how much sorrow really is felt in the heart of a hunter that sees a wounded animal or an animal that is killed with no purpose on a highway by a car or truck.
OK so what in the world does this have to do with real estate investing? It has a great deal to do with it. I want to discuss with you the concept of “investing in land for generations to come”. One of my biggest motivations for acquiring wealth is so I can purchase tracts of undeveloped land, improve the wild life habitat there and do all I can to make damn sure it stays undeveloped for as long as possible.
There is of course the potential to profit from this approach if you want to. Land that can be used by hunters and is not marred by human interaction is becoming more and more scarce. I want you to understand that you don’t need to buy hundred acre tracts to participate in this type of “investing” a 1-5 acre lot in the right place can be something you turn into a sportsman’s paradise. The goal would be to find land that either adjoins protected public land or perhaps land that is so rugged that developing it will be so costly as to protect it from development.
Such land is still available in many places all over the country. In fact the harder it is to build on the less it costs and the lower the cost of the taxes on it. Switching your mind from “property flipping” to the long term investing and you start to see some real opportunities. Let’s look at them in two categories, one as investing for money and the second as investing in the future.
Strictly looking at a profit stand point, if you find some nice land especially some that adjoins public and protected land like national forest, state parks or national timber lands you can be pretty sure that simply waiting for a few years will certainly see a return of investment if you want to then sell the land. Now take some steps to manage the land for wild life and you can really see a great return. Put in some feeders, clean out some of the brush and plant beneficial trees and plants in its place and perhaps construct a low impact shelter for camping and you start to really see the potential to not only sell the land at profit but to know that your buyer will want to preserve the land as well. If you can go as far as providing a year round water supply on land that previously had no water on it your return goes way up.
Now turning to the concept of investing in the future I get a lot more excited. To me owning the land is about also caring for it and doing the things I mentioned above. Such land is beautiful and a solid way to hold and insure your wealth. Yet if you really care for and manage the land you have a chance to leave behind to your family something that can continue to provide for wildlife and sportsmen for centuries. Three hundred years from now your great, great, great, great grandson could be teaching his son about wild life, nature and preserving beautiful things because of something you started. Perhaps while showing him an ancient digital photo of you and your family and telling the story about how you gave this gift to the family.
Isn’t that a bit more exciting then a CD, government bond or flipping a multi tenant property?
My view is people should work hard to build and preserve wealth. Yet as you do it is important to think beyond the return at the end of the year, we need to think about the legacy we create. Just something to think about as you build that empire.
So where do you find land like this? You have to hunt for it and venture out into the rural world yet there is at least one very good source to search for and find land like this. It is called United Country and my only warning is if you love country living or long for a place in the mountains you can spend a day just browsing on it. Anyway I would love to hear the thoughts of other nature lovers and sportsman about this type of “land investment” so please give me your feed back below.
Filed under Survivalism | Comments (2)Trust Deed Investing a Creative Investment Strategy
Right now the mortgage industry seems to be in melt down but real estate investing has a proven track record of making great returns even during recessions, that is when properly leveraged. In short trust deed investing is basically when private investors loan money that has real estate offered as collateral against the loan. Trust Deed Investing is nothing new; banks and private individuals have been loaning money against hard assets like land and other real estate for centuries.
In essence trust deed investing is like taking the position of being the bank in a mortgage vs being the slep paying interest for 30 years.
I recently asked to review a website for Diamond Bay Investments who specialize in trust deed investing. They are currently advertising returns of 12%. Investments like these are not with out risks and you should of course consult with your financial advisers before investing with any company or investment.
That said trust deed investing has a high potential rate of return and it is protected by a hard asset (land, property, buildings) so it is worth considering. It is not a place I would advise anyone to put all their money but it is one underutilized investment option that is a great part of a long term balanced investment portfolio.
Filed under Wealth & Investing | Comment (0)More on investing in copper pennies
Heck why not one more post about pennies. Yesterday I did a pretty long post extolling the virtues of pre 82 pennies as a simple and small investment. Again I want to restate this isn’t a “way to get rich” but it is a really cool and fun little inflation hedge and about as risk free and low cost as any form of investing has a right to be.
Anyway I found a really cool little resource that reinforces my point that 95% copper pennies that are still in circulation are a pretty hot little item to set aside right now.
The site is called CoinFlation and I have put it into my book marks so I can always find it in the future. One of the coolest tools is a coin melt value calculator that tells you the exact value of coins when you melt them down. They have two calculators one for silver coins (pre 65 dimes, quarters, halves, etc) and one for coins currently in circulation. To give you an idea of how “valuable” pennies made prior to 1982 are. I decided to run all the comparisons at a 100 dollar face value. So lets look at some of the out of circulation silver coins that you can’t find today out side of a coin shop, some of today’s other coins and their “real value” and then compare them to the humble copper penny. Of course this is “raw
- 100 dollars face value of silver dimes, silver quarters or silver half dollars is worth $1017.81 at today’s current metal prices. They are all the same because each represented a fraction of an ounce of silver as in 1/10th, 1/4th, 1/2 ounce etc. So these coins represent about a 917% return of investment just in metal value for those who had the forsight to pull them from circulation in the 60s, 70s and for a bit of the 80s when they were still around.
- Now if you took 100 dollars worth of today’s quarters you end up with about $18.33 in raw metal value or an 81.7% “instant loss”.
- How about 100 dollars worth of today’s pennies (anything minted after 1982) you get a whopping $58.80 in raw value or a 41.2% “instant loss”.
- What about 100 dollars worth of Kennedy Half Dollars? Everyone loves those right? Same formula as the modern quarter. Melt em down and you get $18.33 in raw metal value or an 81.7% “instant loss”.
- What about the nickel? There is a lot of copper in a nickel and it is a thick coin so it does ok. Try a raw value of $113.75 or an instant return on investment of 13.7% Perhaps storing nickels ain’t a bad idea either?
So how does our humble penny add up against all this? Today’s metal prices for copper and zinc put the value of 100 dollars in pre 82 pennies in raw metal at $193.61. That is easy math an instant ROI of 93.61%! Sure the penny isn’t currently holding pace with those old silver coins and it will never catch up to them. As copper goes up you can bet silver will to. Yet that is my point you can’t just go around picking up a dozen silver dimes a day any more but you can pick up a good amount of pennies from prior to 82.
Sure even with copper at say 5 - 6 dollars a pound you would need a lot of pennies to be worth even say 10,000 dollars. Yet just think about it, each day you sort and toss some into a jar. Painless and foolproof, what do you have to loose other then a bit of space?
Filed under Business & Marketing | Comment (1)Double your money in the metal market with no investment
Ok, hold on, don’t get to excited. Indeed I am going to tell you exactly how to get an almost immediate 2 fold return on your money. I am also going to show you how to do it with out spending any money, hiring a broker or even with out doing any paperwork. However, I have to tell you right up front you are not going to get rich with this technique.
In fact this technique is first and foremost fun to do, second it is designed again to program you mind in how you think about words like “money” and “value” and finally last it is about actually making/investing money.
Now that big lump to the left is a chunk of raw copper. Copper has skyrocketed in both price and demand over the last ten years. Copper is used in countless industrial activities and as countries like China, Indonesia and India continue to modernize the demand will continue to grow and often to out pace production capacity. This issue will be compounded by the boom in coal, gold and silver. Consider that you are a mining company and you are choosing where to go and what to do next. You can either mine coal which is far easier then any metal or you can mine silver or gold which is worth far more then copper. Or last you can mine copper which is profitable but if you had the option what would you mine?
Great! So how does this help you double your money with out spending it? The answer is in the humble penny. Currently and since mid 1982 all U.S. pennies are made from mostly zinc with a copper cladding, basically a zinc coin with a very thin layer of copper on the outside. Such pennies are worth damn near nothing from a metal stand point. However, any penny that is older then 1982 is 95% copper and 5% zinc alloy. What does this mean? Let’s do some math.
Step one - When you look at pennies that are made from 1981 back they are heavier then today’s. In fact there are 146 pennies to a pound. Yet we must consider that such pennies are only 95% copper so 1.05 x 146 = 154 pennies make one pound of pure copper.
Step Two - 154 pennies even those from 1981 back are “worth” in currency a whopping $1.54
Step Three - Copper is currently trading at the time of this writing for $2.84 per pound. Hence 154 pennies are “worth” $2.84 in raw copper and copper is a commodity you can actually sell it for very close to the current spot price.
Step Four - Calculation of our return by simply dropping an 1981 or earlier penny into a “special” jar or container is as follows. $2.84 - $1.54 = $1.30 of “profit”. Now take you profit of $1.30 and devide it by your “initial investment” of $1.54 and you have a “instant return of investment” of 84%. Not quite double but as soon as copper goes back over 3 dollars a pound (which analysts believe will be quite soon) and you are at a full 100% return.
We should also consider that copper was trading for about 60-70 cents just 20 years ago and you start to realize just how high your “return” can be if you just start tossing all you pre 82 pennies into a jar for the next twenty years.
This is a great project for adults and kids alike. The bad news is again you are never going to get rich with this and in fact copper will have to go up to say 6 bucks a pound before you will really be able to “cash in” pennies in any real volume. The good news though is there is no doubt that over the years that will happen and because we are talking pennies not many people are making an effort to store away copper pennies.
In 1959 the U.S. stopped making the “wheat cent” and while most of those have been horded away by collectors from 1959 to 1981 100% of pennies produced in the US are 95% copper and virtually no one have really collectively valued them at anything more then one cent. That is 22 years worth of pennies still traveling around in circulation which means their are hundreds of millions of these pennies out there being spent every day. I always drop my pre 82 pennies in a jar and about 1 out of 5 tend to be pre 81’s. Over the years that is a lot of pennies.
So why do this? I mean save 4 dollars a month this way and you make about 4 in return and you have another 400 fricken pennies to deal with right? Short sighted my friend, the key is you don’t do very much to earn that return and most people are making less on their interest bearing savings accounts a month in America. All you do is follow my advice and “spend cash” and each day go through your pennies and drop any 81 or earlier examples into some special container. How much easier can “investing” be?
Just consider if in 10 years you had 15,400 pennies or $154 bucks. Those pennies if copper is at 6 bucks by then will be worth about get this, 600 dollars. Retirement money? Heck no! Just another little store house of money. Additionally while I never get to concerned with numismatic value because of how highly subjective it is there is another opportunity here.
See first let me warn you if you are currently thinking of buying 200,000 or so pennies from a bank, sorting them out and melting the older ones don’t do it! The U.S. Government will frown on that and possibly make you wear some silver bracelets and break a few rocks for a few years. Such activity is illegal for now anyway. Yet as copper keeps going up (and it will) sooner or later the mint will begin to “retire” the old copper. That is a nice way to say they will take the pennies out of circulation and harvest the copper for use. Of course the government is free to do that. This will make a lot of these 60s ad 70s pennies harder to come buy and add some numasmatic value to them as well.
That is many years into the future but let me ask you this. How cool would it have been if say your grandfather started collecting 1964 and earlier silver dimes for you when we stopped making them in 65? For about 10 good years it was easy to pluck silver quarters, dimes and half dollars from circulation. Today it is very rare to find one. I happen to own a huge pile of such coins put away for me by a very smart grandparent. This led to my love of silver in the first place. Today we have the opportunity to start doing something like that for our children, their children and possibly their children’s children. What would 100,000 Indian head pennies be worth today?
There is more at work here though tied to the production of pennies and the metal price. Do you know why 1982 was the year that the penny changed to a zinc core? In the early 80s all metal prices spiked for a while and even then a penny was worth more as copper then as a penny! So zinc was a cheap alternative and coating it in copper kept the penny looking like well, “a penny”.
Today though even zinc is rising in price and it costs about 8/10ths of a cent in raw metal to make a penny. That is before production costs, etc. This means the US Mint is Loosing Money to make pennies. Additionaly so long as people spend cash we can’t get rid of the penny we have to have something in order to make change of a dollar with. I predict therefore that the days of the humble Lincoln cent are numbered! The easy solution is to come up with coin made of something perhaps even cheaper then zinc and make it smaller too.
Since no vending machines take pennies there is no problem with changing the size of the penny. Don’t think it can’t happen either, they did it with the dollar coin. When sooner or later this change occurs it will be another numismatic bump in the value of all pennies and even more so to the all copper variety. So I encourage you to take the phrase, “save your pennies” with a new vision. Start plucking the little copper disks from circulation today and just put them away.
Filed under Personal & Home | Comments (3)The reason I invest in silver coins
I have already written a bit about my affinity in my post, What I Blow Money On, but today as a follow up to my article on investing in gold it seems like a good time to talk a bit more about precious metals before we move on. In addition I am going to provide you some of my own rules on buying silver coins.
First let me lay out my case for why silver is a good investment. Simply put all metal commodities are doing very well right now and will continue to do so. Heck even copper is getting rather expensive. Back in the 80s I remember copper going for about 70 cents a pound. Today it is hovering in the range of 2.80-3.00!
Many people see silver as a “poor man’s gold” and I think that is rather short sighted. First I don’t care if silver is ounce for ounce far cheaper then gold if you have 1000 dollars worth of gold or 1000 dollars worth of silver you are holding the same value. Now silver and gold are true brothers in my opinion and the price of one is indeed tied to the price of the other. While they are not completely pinned to one another and the Hunt Brothers debacle will skew numbers from the 80s and early 90s there is a strong correlation (precentage wise) to movements between the two. To get an idea of the correlation look at the two graphs below which cover 1997-2007…
As you can see again while not lock step with each other the two metals perform very closely to each other on the open market.
So why not just buy gold? Understand I am not saying to not buy gold it is just that I truly “invest in gold” I buy through my broker and I buy both actual gold, gold funds and stock in gold companies. I have nothing against doing the same with silver but I prefer to actually buy, hold, touch and own my silver mostly in the form of coins.
Why? Two answers….
First, because I love silver coins, they are history, they are beautiful and they are something material to me that I can look at and appreciate. In this way Silver Coins offer me something that 95% of my other investments can’t. Sure I can look at my stock certificates but there isn’t much fun in that. Most of my other investments are just numbers on paper then don’t have the feel, look and glitter of my coins.
Second, because investing in many different things and in many different methods creates diversity. The beauty of silver coins (at least of the type I purchase) have most of their value in the silver basis price. I can “cash in” anytime I want and do so with no paper work or government red tape. I can literally walk into a shop, sell my coins and walk out. Holding silver coins is like holding cash money with out the cancer of inflation upon it.
So what rules to I have for investing in silver? Here they are but understand these are no ones rules but my own. A few you really should follow but others are more about your risk tolerance and your personal view about numismatic values.
1. I do not belong to nor do I buy my silver in any kind of “club” or any highly advertised coin supplier. In particular Littleton Coins is among the worse places of all to buy coins. Their prices are generally 40-90% higher then local coin shops in my area. I buy from local merchants or only via mail order if the price is as good or better then local pricing.
2. Directly related to the above, I am not on any type of auto shipping or monthly arranged purchases. I buy what I want as I find it and as I want it. My silver investments are truely incremental investments outside of my conventional portfolio.
3. I never buy “junk silver coins” which are large unknown lots of mostly 1960s and older dimes and quarters. Most are worn so badly you can scarcely read the dates.
4. While I don’t buy junk coins I also don’t buy highly numismatic valued coins. In other words I never buy a coin where the bulk of the coins value is based on how “collectible” or “rare” it is. Such values are highly subjective and only represent a “real value” if you can find a buyer. Try buying a 200 dollar silver dollar this week and see what the same shop will pay you for it (with out a big jump in price) the following week. This is the one rule that I understand when others break, this is my personal preference but I have my reasons.
5. What I do buy are Silver American eagles as they are priced right about bullion prices. I also buy high quality but common Franklin, Kennedy and Walking Liberty Half dollars which are still quite affordable and made of 90% pure silver. My other big favorites are the more common Morgan and Peace dollars. These coins to me represent a nice mix and all are very affordable and most importantly highly tied in value to the silver basis.
So what is my advice? Well I think it makes a lot of sense to buy some silver over the years and just have it as a hedge against inflation not to mention an investment that remain liquid in both the best and worst of times. The beauty is you can buy say a 10-20 dollar coin just once or twice a month if you don’t have a lot of extra money to invest. Even that over the years can build a nice collection and a lot of real value. I personally buy between 20-150 dollars a month of silver and have been doing so since 1995. As you can see by the graphs in this article that has been a very good move.
Filed under Business & Marketing | Comment (0)