John Labunski, Types of Investments

According to the National Bureau of Economic Research, the United States has been in a recession since December of 2007. We are currently undergoing one of the most severe recessions in United States history. Recessions can be times of great fear and widespread panic. A recession is a normal stage of the business cycle. The business cycle is defined as recurring fluctuations in economic activity. The business cycle is comprised of four stages:

1. Expansion- time of economic prosperity and growth, rise in GDP, low unemployment

2. Peak- highest point of economic activity, highest wages, lowest unemployment

3. Recession - slowdown in economic activity, decline in productivity, rising unemployment

4. Trough - lowest point of economic activity, highest levels of unemployment, lowest wages

So, what is a recession anyway and why did it take so long to identify? A recession is two or more consecutive quarters of decline in gross domestic product(GDP). GDP is the total value of all goods and services produced within a country. Since it takes at least 2 quarters to officially identify a recession, the earliest that economists could have identified the current recession was in the 3rd quarter of 2008.

So, what exactly happens in a recession? A recession is a contraction in the business cycle. The supply of goods and services exceeds the demand for goods and services. The decrease in demand for goods leads to layoffs of employees. Increased employee layoffs lead to higher unemployment levels. Higher unemployment causes rising consumer bankruptcies and foreclosures. Laid off employees purchase fewer goods. Money becomes tighter as consumers tighten their belts and spend less. Less efficient companies that are laden with debt are driven out of business. Finally the bankruptcies of businesses leads to a decrease in the supply of goods available and demand begins to slowly recover.

So, how long can a recession last? There is no definitive time limit on a recession. A recession can be as short as a 6 month time period or last for years. A recession that is very severe and long lasting can be referred to as a depression.

So, can any good come out of a recession? Yes. Recessions do have some benefits. They eliminate inefficient suppliers, lower prices, reduce inventory and encourage competition.

by Mark Riddix

Author: charles.wee

Well do you need Financial Planning? In this article, I will show you how you can answer this question.

Immediately after we complete our college education, we automatically participate in a race call rat race.

Everyone started the race with a cart. In this cart, we have personal bills, loans and our allowance. As we are single, everything is good and manageable. We can spend what we earn without worry.

Then we meet our partners and get married. Thus we begin our next chapter in life. Our cart becomes heavier and we now worry about our spouse’s bills and loans and kids allowance. Some of us must support our parents too. We may even need to bring our family to vocation. As we grow older, our carts get heavier and heavier. Do you have enough savings to meet these expenses?

As we know, life is never a straight and smooth path. We will encounter obstacles. Some of these obstacles may set us back in terms of our financial standing .If we do encounter a big obstacle (e.g. critical illness, operation, surgery, business failure) and need a huge sum of money to recover, Do you have enough money to meet this expense? What if the big obstacle results in us being permanently bed-ridden or out of work for a long time, what is going to happen to our cart? Do you have enough money to support yourself and family if that happens?

Many may say, well we have friends and relatives to turn to for help. But our friends and family have their own carts to pull too. If they help push our cart, who is going to push theirs?

We will all retire from work eventually. From then on till we all rest in peace, we do not have regular income but our life must still go on. We still need to pay our bills and we still need to eat. Do you have enough money to support yourself during retirement?

At old age, our body is no longer working as well as they used to. Our health conditions deteriorate, as we get older. We will need to seek medical help frequently. We may even need to employ a person to take good care of us. Do you have enough money to spend on these medical expenses?

Author: Syd Z. Nohcud

The first step to building wealth through real estate investing is to buy your own home. Instead of making rent payments that pay off someone else’s property, it makes more sense to make mortgage payments to pay off your own.

This way you not only are not only investing your payments in a property, you are able to take advantage of capital gains.

As you increase equity in your home, you will be able to use it to help you purchase other properties.

After purchasing your own home, the next most common step in real estate property investing is to buy a rental property. If you buy well and get a good rental return with minimal outgoings you will not only take advantage of capital gains but the rent you receive will go along way to paying your mortgage.

As you gain equity in your property and pay down your mortgage, you will be in a position to purchase yet another property and repeat the process.

You need to be careful to minimize the risk by buying properties at below their market value, preferably when market prices have dropped.

This is because real estate prices increase over time and if you are prepared to hold onto property, you will always make money in the long term.

Unless you are wealthy, you will need to take out a mortgage to buy real estate property. A mortgage loan uses property as security for a loan on the property.

A mortgage allows you to purchase real estate with a down payment and repayment terms so that you do not have to pay the full value of the property immediately.

If you default on the payments, foreclosure requires a judicial proceeding which provides the borrower with some protection.

Real estate has historically offered investors far better returns than most other investment options.

With most banks prepared to finance ninety percent of the value of property values, you only require a deposit of ten percent and the ability to make the monthly payments to repay the loan.

Therefore, if you buy conservatively you place yourself in an ideal position to make excellent profits. In fact, real estate has traditionally returned substantially more than average stock market investments over time.

As well as building long term wealth, property investment can offer tax advantages under certain circumstances.

Get advice from your accountant as to whether your circumstances would allow you to claim tax benefits.

Another advantage of real estate investing over stock market investing is that the prices are flexible. With real estate you can make an offer that is lower (sometimes substantially so) than the asking price.

Stock market prices are set and do not allow you any room to move. As a result, you can sometimes get excellent property buys when the seller needs to sell quickly and is prepared to accept your offer.

All in all, investing in real estate is a wise choice that offers excellent long term returns and sometimes even substantial short term gains.

Author: Steffan Kolmar

Investment property refers to investing your money in properties. It can be for dual reasons. One, it can be an asset. Two, it can also generate sound returns ensuring that the investment is safe devoid of any risks.

However, investment property may not be an easy task as considered. Millions of people across the country invest in properties of many categories. The principal categories are commercial and residential properties. If you are a busy professional without adequate time to dedicate in investment property, it is always better to hire investment consultants or wealth management consultants.

Investment consultants are registered on the internet as well as the yellow pages of the local county. Their services are easily available for payment of a prescribed fee either on monthly basis or on the investment transaction that you conduct frequently. It is recommended that you hire an investment consultant on a monthly basis.

The investment consultants are aware of the properties available in the market for trading. They have tie-ups with leading real estate operators. So the job of investing in property becomes easy. However, it is wise to double check a property before investing in it.
If you do not want to hire an investment consultant, you can do the job on your own by dedicating time on weekends. There are several guidelines that one has to follow before investing in property.

One should necessarily be informed well about the real estate market. A number of journals and magazines offering updates on the property market are widely available. Subscribe to these magazines and study them carefully for at least three months before investing in the properties. A lot of fluctuations take place in the property markets, so keep a close watch on the rates.