Author Archives: schatzi

Mar
27
2023

Supercharge Your Retirement Fund – How to Invest it in High Profit Real Estate

Why leave all your money in your retirement fund in the stock market? Have you lost money? Do you wish you could diversify? Well, the truth is you can. I will go into some details about how you can use an IRA, but 401K’s, HSAs and other types of funds can be used or rolled over into the proper type of fund. Speak with the company that handles your fund, don’t take no for an answer, they make much less when you self direct your funds.

Generally to self direct your IRA funds, you will use a custodial company. You, or the company, will form an LLC that you invest your retirement money in. Then that LLC is used to invest in whatever you feel is a good investment, in this case, real estate. That is making a long story short, but there are many companies out there that specialize in this. Be sure to check with someone that knows what they are talking about to be sure you have the best set up possible.

After you have your account set up, is is fairly easy to get started.

The next step is to decide how you want to invest. Do you want to be the sole owner? Do you want to pool your money with other investors? There are a few different investment strategies with their own strengths and weaknesses. I’ll go into a couple of them here.

Owning Property Yourself

I like this option for some people, but it really depends on how involved you want to be, and how much money you have to invest.

The obvious advantage is that you have full control over your portfolio, no other investors are involved that can help make decisions. (this is only an advantage if you really know what you are doing!!!) In this scenario, you use your IRA to purchase investment property. Since I specialize in residential rental property, I will use that as an the example.

Let’s say you find a great 2-unit rental property. You have $50,000 in your IRA set aside for this purpose. TO use round numbers, let’s just say the property with closing costs is approximately $50,000. So you now own this property with your IRA funds. The rental income will make up your return. All the monthly rent payment will go back into your IRA. So if this property averages $1,000 income each month after expenses, that’s $12,000 each year you are earning on this investment. That is a 24% yearly return on your investment! Not a bad deal, and we get returns like this on many of our investments! This doesn’t even include what you will earn in appreciation!

The disadvantage to this strategy is you are limited to investing in one, or just a few properties. This can work out great if you get the right properties. Unfortunately, if you have only one or two rentals, and have a bad month or year on a property, it greatly affects your returns. So this strategy is not for everyone.

Investing with other Investors

The biggest strength of this plan is diversification. You have the advantage, and great returns from the last example, but also have your investment spread out over many properties.

Here’s how it works. You find several other investor looking for the same type of investments as yourself. Then you form a holding company, usually an LLC. This LLC will own a larger portfolio of properties. Since many people are pooling their money, you partially own each property, rather than owning 100% of a single property.

So imagine there are 100 properties total. Most of these perform well and earn money. A few of them have a bad month, and create a loss. The strength of the other properties still produces positive income for the entire portfolio. It is the same principle used when investing in stocks. Some will have a loss, but if most have a gain, you still make money.

The biggest disadvantage is that you don’t have 100% control over your portfolio. So you want to make sure that the managing members of the investment group know what they are doing.

Conclusion

I personally believe investing in real estate is a great way to diversify your retirement portfolio. I like the idea of pooling my money with others to own a larger portfolio of properties. Just make sure you understand all the details, and do your research before you buy real estate with you IRA funds!

Mar
26
2023

Affordable Group Health Insurance – Secure Your Future

Affordable group health insurance can be a great money saver for cash-strapped families in modern society. The rising costs of “fee-for-service” healthcare makes even a check-up become an economic hardship to many families. These fees are so high because most medical practices cater to insurance companies. These companies “write off” a portion of what they are charged, so doctors and hospitals inflate the cost of services. Unfortunately, in this system, those without affordable group health insurance bear the brunt of healthcare costs.

Costs for group medical insurance are based on probabilities. The insurance company knows that it will have to cover some of its insureds’ medical needs in any given month. What they try to do is collect enough to cover these expenditures, as well as their overhead, and make a little profit in the process. When you contribute to this pool, your health care costs will be partially paid for when you have covered medical issues.

Different insurance companies have different policies for how much they cover. Some cover a certain percentage of your medical costs, some require a co-pay (set amount for each office visit), and some have a deductible, an amount you must spend out-of-pocked before insurance kicks in.

You can easily avail of affordable group health insurance if your employer (or that of your spouse) provides this facility to its workers. Sometimes a tie up between a health insurance company (including group health insurance firms based in Texas) and a place of work can result in discounted medical cover for its workers. In exchange, the employer may pay part of the monthly health insurance costs, leaving the worker to pay the rest, thus providing affordable group health insurance. Contact your human resources manager to inquire whether such discounted medical cover is available at your place of work.

This health insurance will also cover your children or dependents. It is usual for employees to be able to add their family members during the open enrolment period for a slightly higher premium. When you or your spouse has a child, you will also have the opportunity in most cases to immediately add your child to the insurance policy.

If you are self employed, or your employer does not offer affordable group health insurance, medical insurance can be obtained by seeking out a group to join. By searching “individual medical insurance” or “open group health insurance” on the internet, one can find a variety of options for joining a group.

%NL% You can save huge sums of money by obtaining group medical insurance obtained through a place of employment or on an individual basis. An insured person will probably pay less money for healthcare than an uninsured because he will be paying only co-pays, deductibles or a percentage of exorbitant medical fees.

Mar
25
2023

Finance Risk Management – Get in the Know

An interview between Stuart Mcphee and Ray Barros on finance risk management.

Stuart: I understand early on that you were almost forced to recognize and appreciate how important managing risk was. Was that position sizing, was it where do you set your stops or all of the above?

Ray: I didn’t manage the stops initially and then you read every book to put the stops in but then I didn’t manage portfolio risk. You are spread over a number of instruments and even if you risk 2% per instrument then you leave twenty instruments open. You know suddenly you have got 20% open you got to have that. You got to have risk for trade, how many contracts are you going to take so all of those things I had to learn the hard way.

Stuart: I am sorry to hear that. A lot of people make a lot of mistakes early on and it’s only through making those mistakes yourself. I mean you can read twenty books that say you know position size well and do this and do this. You go through and make all those mistakes and it hurts and what you say was since your wife funded you early on, that probably didn’t sit terribly well with you so it forces you, I guess.

Ray: Yeah, and I think early on you know a couple of times I have mentioned to you that I have an excuse to say, back in my day no one was there to really assist. I mean the stuff we had then is nothing compared to the assistance you get today. I mean you get some really good people out there trying to help.

Stuart: Okay, so it’s real big difference. About finance risk management, and you know about how important that is, and I hope others realize how important managing risk is. But a lot of questions we get from clients, it’s all about entry and you do the seminar thing and someone will talk about managing risk and you might have a good size audience but then someone else is talking about entry and in the room there is standing room only. Because this is the key to success. What are your thoughts on entry and why people focus on that so much and do you have guidance to people about entry and methodology and setups.

Ray: I think they have a place. I think your trading rules have probably the least important part. In my view identifying what are the trends, where you are going to take a trade and whether that trade is setting up, it’s much more important. The entry almost necessarily follows those things.

Secondly, I can’t remember when I brought the lower. I don’t think I have ever done that so at some point after entering the market you are going to take some heat. So you need to know with your methodology how much heat is normal. John Sweeney wrote a book called Maximum Adverse Excursion and Maximum Favorable Excursion. I would recommend that to anybody who is talking about trading and talking about entering because that approach tells you statistically how much heat you ought to be able to take in your system and it will still make a profit.

If you know that, it takes the pressure away from you. I have got to buy the exact low I want to buy within two ticks or sell it within two ticks and often some systems just aren’t geared for that sort of thing. So the beginner trader must quickly come to terms both with the rules for entry and finance risk management.

Mar
24
2023

E-Business Ideas

The advent of technology has made the internet become a household commodity making virtual enterprises to be on the rise. It is therefore important for anyone to take advantage of this internet wave by taking up e-business ideas that are of great interest to you.

Just like any other business has its development period, e-business also takes time before it starts to pick-up. In order to determine the path that you can take in online business, here are some e-business ideas you can do to succeed in this area of business.

1. Utilize the web support to an offline business:

No matter what kind of trade you operate, be it a restaurant, store or a small shop, you gain a lot of benefits from e- business. When you have a small business instead of using the web and the internet to attract audience globally, you will use the web on a local scale. The website in this case will be used as a marketing tool to promote your products and services to your local customers. It will provide information such as locality of the business, hours of business operations and ways that you can be contacted.

Online marketing tools can be can be of great help to attract your local customers. The advertisements can be targeted to certain geographic demographics and segments, in order to ensure that the information gets to the customers in your locality.

It is also advisable to ensure that your site is optimized in order to have high ranking for local queries on various search engines. Your business can also make use of online communication and other customer service tools, for example, social networking sites and email. This will help you be connected to your customers at all times.

2. Sell your products and services online and enjoy global presence:

Taking your business online will assist you to have connection to a global audience. If you have a lot of products and services to sell, the best idea is to involve yourself in E-business inured to turn your efforts online into a global sales channel with high growth potential.

E Commerce makes it possible for you to sell in the entire globe without the need to expand the business physically, which saves a lot of cost. You start by creating an online store where customers can view the products and services offered and then making orders. You can also make use of online marketing tools and strategies to attract your worldwide target market and entice them to purchase the products.

3. Blogging:

Blogging is another lucrative E-business that is gaining popularity at a very high rate. You just need to register yourself as a blogger and make use money of making tools that Google provides such as AdSense. For your blog to help you earn money it must be good. You should also first understand the reason for blogging in order to succeed in this venture. When blogging you can use advertising networks such as casalemedia or contextweb to help you increase your return on investment.

The above E-business ideas can help your business grow very fast, but it is also good to note that you need to be dedicated and committed to the business. Just a small irregularity or mistake can make your business fall very fast and lose a lot of customers within a short period of time.