You've undoubtedly seen these or read them. Glossy ads or four-color spreads in periodicals and magazines promising to teach you every one of the juicy information about successful property investing. And all you need to do to learn each one of these real property investing surface encounters chuck russo secrets is to pay a rather high sum for a one-or two-day seminar.
Often these types of slick real estate investing workshops claim you could make wise, profitable property investments with zero money lower (other than, of program, the hefty fee you pay for the workshop). Now, how interesting is which? Make a profit from real estate investments you made with no money. Possible? Not probably.
Successful owning a home requires income. That's the type of any type of business or investment, especially real-estate investing. You put your cash into something which you hope and plan is likely to make you additional money.
Unfortunately too few newbies to the world of real-estate investing think that it's the magical kind of business exactly where standard business rules don't apply. Simply put, if you need to stay in property investing for a lot more than, say, a day time or two, then you're going to have to generate money to use and invest.
While it may be true that buying property with absolutely no money down is straightforward, anyone who's even made a fundamental investment (like buying their own home) is aware there's much more involved in real-estate investing that will set you back money. For illustration, what concerning any required repairs?
So, the number 1 rule people new to real property investing must remember is to have obtainable cash stores. Before you decide to actually perform any real estate investing, save some cash. Having just a little money inside the bank when you start real property investing surface encounters chuck russo can help you make more profitable real estate investments in rental properties, for example.
When real-estate investing inside rental attributes, you'll want to be able to select only qualified tenants. If you might have no cash flow when property investing within rental attributes, you may be pressured to take in a a smaller amount qualified tenant because you need somebody to pay for you money to be able to take treatment of fixes or attorney fees.
For almost any real est investing, meaning leasing properties or properties you get to sell, having funds reserved can enable you to ask for any higher cost. You can request a higher price out of your investment because an individual surface encounters chuck russo won't feel financially strapped as you wait for an offer. You won't be backed into a corner and forced to accept just any offer because you desperately need the money.
Another downfall of many new to real-estate investing is, well, greed. Make a profit, yes, but don't become thus greedy that you simply ask regarding ridiculous leasing or second-hand rates on any of your real property investments.
Those a new comer to real estate investing have to see real-estate investing as a business, NOT a spare time activity. Don't believe real est investing will make you rich overnight. What business does?
It requires about half a year to decide if real-estate investing set for you. If you have decided in which, hey I really like this, then give yourself a few years to really start earning profits. It typically takes at least five years to get truly successful in real estate investing.
Persistence is the key to success in real-estate investing. If you have decided that property investing is for you, surface encounters chuck russo keep plugging away at it and the rewards will be greater than you imagined.
The manic depressive market wildly swings up and down on each new news story: The Fed is meeting at Jackson Hole on August 27 possibly to discuss QE3 (or not), and that news may pump up the stock market. But China's banks seem to be using Enron's accounting manual, Europe's banks need liquidity and are loaded with bad debt, and U.S. banks only temporarily TARPed over trouble. Gaddafi's regime in Libya appears over, but Libya's oil output may not fully recover for years. Venezuela wants banks to open their vaults and send back its gold, but Wells Fargo says gold is a bubble. Pundits say gold is a barbarous relic, but exchanges and banks are now using gold as money. The U.S. is headed for hyperinflation with skyrocketing stock prices, but on the other hand, we seem to be deflating like Japan and doomed to a deflating stock market for another decade. Whom do you trust and what should you do?
No one knows where the stock market or U.S. Treasury bonds are headed tomorrow, but in my opinion, here are some fundamentals to consider.
The Bad News Isn't Going Away
Until we have real global financial reform and restrain the banks, we won't have sustained growth. The stock market hasn't hit bottom. There's a crisis of confidence in banks and all currencies. We haven't taken effective steps to tackle the U.S. deficit through productivity. We haven't examined spending to eliminate fraud and waste, and we haven't addressed our need for more tax revenues by eliminating the Bush tax cuts (for starters).
Savers are punished by "stranguflation:" negative real returns on "safe" assets, declining housing prices, and rising costs of food, energy and health care. The Fed touts the falling cost of I-Pads, but how often do you buy one of those, and how often do you eat?
Good News (for Now)
The USD is still the world's reserve currency. Even though we devalued the USD, there has been a global flight to U.S. Treasuries pushing down our borrowing costs (yields). No one in the global financial community feels the U.S. has done its best to correct our problems, but severe problems in Europe, China's inflation, and Middle East unrest has money running to the U.S. Since we've devalued the dollar, we appear to be a bargain for foreign investors, even though they are terrified by our money printing presses and the potential for inflating commodity prices in the long run.
How did I play this? My own portfolio is currently more than 20% gold with some silver, and I bought out-of-the-money call options on the VIX when it was in the teens with maturities of 4-6 months. This is "short" stock market strategy, one could have also done well buying puts on the S&P a few months ago. In the first big stock market downdraft in August, I sold the options when the VIX hit the high 30's, and I'll buy more options again if the VIX falls again. Many investors are not comfortable with options, and this strategy isn't appropriate for everyone. The rest of my portfolio is chiefly in cash or deep value opportunities.
What Happens Next?
No one knows for sure, and anyone who tells you he or she does is selling snake oil. The situation is fluid. We tried to reflate our deflating economy. Our massive dollar devaluation may encourage investment, because it's protectionist. It reduces our cost of labor, among a few other "benefits." The problem is that the Fed has printed money, and we haven't done anything to position the U.S. for greater productivity. We're trying to inflate our way out of a problem without investing in productivity. This is a very dangerous way of attacking this problem. Even more "stimulus" would just be an attempt to inflate our way out of our long-standing deep recession. That's the foolish and unsuccessful strategy we've adopted so far. That could lead to runaway budget deficits (our deficit already looks intractable) and bring us to double-digit inflation. Even the European flight to US Treasuries may not save us from a deeper recession in that scenario.
If we don't overreact -- and we may have already overreacted -- our dollar devaluation results in our foreign trade situation first getting worse (as it has now) before it gets better. Now is the time (actually, we should have started years ago) to spend capital to increase U.S. productivity. The dollar's plunge relative to other currencies will eventually make us more competitive. This will be good for blue chip companies, in particular those that own real assets and manufacture items. The Fed and Washington may do anything, however, so one must watch the news.
What does this mean for the U.S. stock market? In my opinion, it is currently not good value and feels like the 1970s when we experienced a recession followed by inflation. One should consider staying mostly in cash and expect stocks become cheaper. One might miss an interim rally, especially if the Fed announces QE3 (more "stimulus" and money printing) or more bank bailouts, but that is like using Kleenex laced with sneezing powder. We will see stock prices even lower than they are today. The old paradigm dictated that stocks were a buy when P/E ratios were 13 or less (and many are well above that), dividends at 4%, and book values at 1.3 or less. (This excludes oil companies, which tend to trade at lower P/E ratios in general.) I believe we'll see much better deals in coming months. In 1978/79 P/E ratios sank below 7 for blue chip companies.
Should one buy U.S. Treasuries with long maturities? The long end of the bond market doesn't reward investors due to the potential of rising interest rates. If interest rates spike to double digits, then one can reassess the situation.
Long term investors should consider buying commodities or companies that own physical commodities. We're running out of key commodities especially related to agriculture and fertilizer. Washington's brand of the latter isn't the type we need.
Warren Buffett just announced that he's making a landmark investment, $5 billion, in Bank of America.
Bank of America was facing a free-falling stock price and a number of criticisms, including that it did not have enough capital, and that its assets were not worth what it claimed.
Now thanks to Buffett, that will certainly change.
When similar investments were made in Citi and in Goldman Sachs, by Prince Alwaleed and Warren Buffett, in 1990 and 2008, respectively, the stocks experienced long term gains.
And get this - he says he dreamt up the idea to invest in Bank of America in the bathtub on Tuesday. He liked it, so he called Moynihan on Wednesday morning. The entire story of how it happened is available in a video embedded below, as told to Becky Quick by Buffett.
The story (and the mental image) is amusing but also important - it suggests that the Obama Administration and/or the Treasury, did not have a hand in the agreement.
And to make it very clear that Treasury or Obama had no hand in the arrangement, which makes the news even better for Bank of America.
So does this - the deal is expensive for Buffett, and a good deal for Bank of America. He says in some ways, it's better than the deal he gave to Goldman Sachs in 2008.
But obviously, it's a great deal for Buffett.
Buffett's investment alone is now worth $700 million more than it was when he bought it.
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