20.06.2015
Investment Avenues for Retirement Planning ? Menu About Mutual Fund Insurance Stock Mar­ket Home Loan Financial Planning ????? Contact Me Simplifiedfm Investment Avenues for Retirement Planning by Sarvajeet Bodas on October 26, 2014 This is Part 2 of All about Retirement Planning series. So you have $1,000 that you do not plan on spending in the near future and want to know the best way to invest it. In this article, I will offer you two methods for investing $1,000 with the potential for much better returns than your average certificate of deposit or bond: stocks or buying an online business.
The actual act of investing money into the stock market is surprisingly easy to first time investors. If you only have $1,000 to invest, you really can only afford to pick a single stock if you are using a discount brokerage like eTrade, Scottrade, or TradeKing.
If you buy $1,000 worth of a single stock and it climbs 10%, it would be worth about $1,090 (you lose $10 buying the stock). Meanwhile, imagine if you had split that $1000 up 5 different ways, putting $200 into 5 different stocks.
As a result, you cannot afford to pick too many stocks but instead should settle on a single stock, at least until you can come up with more money to invest. I would recommend picking a company with huge future potential like Google (GOOGL) or a steady dividend stock is likely to continue growing over time (JNJ or PG are great choices, as they have provided steadily increasing dividends for many years). The only problem with picking GOOGL is that you stock prices do not always allow for even investment. While funds are not the ideal way to invest money due to low returns, many discount brokerages will allow you to buy into and sell out of funds with no trading fee. While investing into the stock market typically provides much better returns than a saving account or a bond, even the best-managed $1,000 is not going to make an individual rich. If you have more time than you have money to invest, then you might want to consider investing in an online business by purchasing a website. Current Income: Typically a website in this price range goes for about 12x monthly revenue. Method of Monetization: Look for a site that makes its money via advertising or affiliate offers. Seller Will Move the Site: Unless you have technical know-how, try to buy a site where the owner includes moving the site for you. If you are buying an old website, you might want to update the graphics a bit when you finally get the site in your hands. Once you purchase the website, you will need to consider different exactly how you are going to generate revenue off of the website. Once your website is up and running and monetized, all that is left to do is to build it out. Even if you make great returns on your investment, the initial $1,000 is never going to be able to add up to a life-altering sum of money.
How to Invest HQ Portfolio September Update is here - Portfolio posted a massive 14.73% gain in August. Notice: Information on this blog is for educational purposes only and should not be construed as financial or investing advice.
Then, the company sells shares (ownership in their firm) to the public and the stockholders can participate in the profits (losses) of the company. Investor’s benefit from growing companies by purchasing stock (and bond) investments from the company.
Assume you have asset classes in your investment portfolio consisting of stock and bond index mutual funds (or ETFs). Diversified asset classes in the portfolio increase overall return while keeping risk to a minimum.
Consider these questions and answers to determine whether a 7% investment portfolio is possible in the future.
Will interest rates on bonds and cash increase in the future? It’s likely that interest rates will rise since they are at a historical low point. Be aware that although long term stocks delivered higher returns, there is no guarantee about the future.
And if you’re looking for higher returns on cash, eventually interest rates will increase. I think 7% is doable, but whenever I get into the discussion with someone, I let them give me the number and then provide the calculations. So if I were having that discussion with LH, I would say something along the lines of “I don’t know, but what number are you comfortable with? If I had that 30 year horizon, I would want to extend beyond stocks and have my assets spread across multiple and diverse types of investments and geographic areas and I would want to be involved in my own start up or the start up of someone I felt had a good chance of taking off.
If you have a long enough time horizon I invest the bulk of my money in small and mid cap stocks.
If one also incorporates past data into the equation, I think it’s certainly possible that 7% returns are achievable.
Really, one must focus on achieving an overall rate of return that’s going to grow net worth. DisclaimerI am a portfolio manager, former university finance instructor, and successful investor committed to sharing my personal finance expertise with you.
Ireland remains especially exposed to another financial shock because of the extremely high levels of public and private debt. A year ago the mere mention of Greece selling its real estate, let along its prized islands, was enough to fill Syntagma square with tear gas, laser light pointers and the occasional riot dog.
Greece’s prime minister is quoted Thursday in an interview in France’s Le Monde as saying the government could cash in on uninhabited islands.
Antonis Samaras said investment is key to reviving the economy, and that privatization plans include selling railways and a part of the Attica coast.
All island sales will be promptly re-nationalized when the opposition takes control of government in the next election in a few months, kicking Greece out of the Euro, and declaring all previous "deals" null and void, just before it announces Odious debt means all Greek debt is also null and void. Select your preferred way to display the comments and click "Save settings" to activate your changes.
All this could have been avoided if Greece would have just said no to the neo-liberal, nnew world order debt slavers. Interesting choice, not looking for freebies though, paying some crazy taxes right here so that wont make much difference. Buy a Greek Island?!?!  Shit, why do that when I have access to these fucking awesome California muni bonds!!
And to think of the hundreds of thousands of Greeks who have fought wars and died to protect those islands from being taken by foreigners.
Though bearer bonds have all but disappeared in the United States, they have reemerged in the media as a convenient tool for tax evaders overseas.
Bearer bonds, also called coupon bonds, are an unregistered bond -- ownership is determined by possession. The decline of bearer bonds in the United StatesBearer bonds were eventually made obsolete in the United States as part of the Tax Equity and Fiscal Responsibility Act of 1982.
At a tax rate of 35%, registered bonds yielding 5% would effectively cost 3.3% in after-tax interest expenses. Although you'll probably never encounter a bearer bond in the United States, they remain popular abroad. Eurobonds -- bonds issued in a foreign currency -- are typically issued as bearer bonds, as they are exempt from the United States' taxation policies. More than a quarter — 26% — of those asked said they favor cash as the best long-term investment.
Cash is great to have in your emergency fund, or in your bank account to pay bills, or even a small percentage in your portfolio so you can be ready to buy when the opportunity arises.
The survey also shows investors’ continuing fondness for real estate, despite the real estate collapse.
The average bank money market deposit account pays 0.11% — so a 10-year, $10,000 investment would gain only $110. Investors’ positive impression of gold is equally puzzling, since gold has fallen nearly 43% since its 2011 high of $1,895 per ounce. How on earth can 26% of Americans think that a minus 0.5% return is their best long term savings option?


For those still decades away from retirement, holding cash (besides a little in an emergency fund to cover a few months expenses) is a losing proposition.
The 13 portfolios also appear in a more select list, the Wealth 150 Plus, which includes 54 funds in total. Hargreaves’ own customers have nearly doubled their exposure to tracker funds over the past five years. The firm said it had negotiated an average cut in the funds’ fees of 32pc compared with standard charges.
Conventional wisdom suggests that passive investment works most effectively in efficient, developed markets where active managers will struggle to find value that has not already been priced in. This falls to 21pc for investors in the technology and telecoms sector, suggesting that here the judgment of individual managers is more useful.
Mark Dampier, head of research at Hargreaves, said the change to the Wealth 150 meant investors could compare funds and markets more effectively without regard to the underlying strategy. Mr Dampier said: “Index trackers have become an important part of the investor’s toolkit, and while the industry ties itself in knots arguing the toss for active or passive, our clients are using both as part of a common-sense approach to portfolio construction.
Reader Service: Transfer to Telegraph Investor and get up to ?500 cashback Cashback depends on the transfer value see Terms for details Your capital is at risk. You are a smart person, so you realize that putting it in a savings account, getting a CD, or purchasing bonds will yield at best a few percent return. Stocks are ideal for those looking for a passive investment, whereas buying an online business is a great way to invest money if you want to take an active role in increasing the value of your investment.
While the stock market itself is risky and investing in a lone stock is even more risky, consider that if you to split your $1,000 up amongst too many stocks, trading fees will kill your profits.
If you sold, you would wind up with about $80 in return on your investment (losing another $10 on the sale to fees).
You would have to pay $50 initially to purchase all 5 stocks (each individual purchase counts for the fee) and then pay another $50 upon selling the stocks. When you only have a small sum to invest, spending $5 on trading fees versus $10 makes a big difference.
Try to pick a stock with long term growth potential that may benefit from trends in the world.
GOOGL is currently around $550 a share, so you would either need to come up with an extra $100 to buy 2 shares at $1,100 total or just have 1 share at $550 and sit on $450 in cash. Instead, the platforms use a small percentage-based fee on the fund to collect their profit.
After you invest your first $1,000 into a single stock, the next $1,000 should go into a different stock. Even if you hit the market average for 40 years running, after taxes you would only wind up with about $14,000 from your original $1,000 investment.
Running a website is much easier than most would expect (especially if you follow the tips shown below) and can really pay huge returns with enough hard work.
Rather than starting a site from scratch, you can find one that shares your area of interest that is for sale and buy it. You can also hire someone to do this for about $50 if the owner will not transfer it for you. Using an auction site is the easiest method to buy a site and Flippa is by far the largest auction site. Try searching terms in your area of interest on Google and look for old forgotten sites on page 2, 3, or 4 of the search results that have not been updated in awhile. Perhaps the best all-around source for monetizing a website is via Google’s Adsense program (this website uses Adsense). You can link to Amazon products that you like or are relevant to your readers, and if the readers buy these products, you will be paid a small commission.
Bonds and CDs do not provide enough interest to generate any noticeable return on just $1,000.
If you have time to invest in addition to your money and are willing to take a risk and learn something new, consider buying an old website and fixing it up. I am not a registered financial advisor with the SEC nor any other regulatory body nor do I claim to be.
Mutual funds or ETFs that hold growing companies allow investors to participate in the growth.
As long as these developed markets continue to innovate and grow goods and services available for consuming and exporting, they will expand. If you have more than ten years until you need your investment funds, and world markets continue to grow, a balanced allocation in diversified asset classes of stocks and bonds representing various size companies from around the world could very likely reward you with a 7 percent annualized return.
For speedy asset growth-invest the maximum amount allowable by law into your workplace retirement account (or a Roth IRA) in a portfolio of diversified asset classes.
Young companies have much greater room for growth than large and established companies (and countries). Because we are talking about a lower return than past history, we should also add that expenses matter. Those often get overlooked, everyone talks about the highs of the S&P 500 this year but mid caps achieved their highs last year. But there are periods of time (and they may be long periods) when small and mid caps don’t outperform. Although it has been tame in the past few years, the historical inflation average is about 3 percent.
Now - nobody cares, which is why the statement by Greek PM Samaras that he is ready to start selling Greek islands was largely met with a yawn across the investing world. We all know China shakes in their boots when thinking of dealing with the great undefeatable Greece military. The Act did not specifically outlaw the bonds, but it removed the tax deduction for the interest paid by the issuer. The same debt issued as a bearer bond would cost 5% after tax, since the interest would not be tax deductible. Completely anonymous and available in big denominations, they had become the currency of choice for money launderers, tax evaders, and criminals. However, as time goes on, financial markets shift to electronic record keeping, and governments crackdown on tax avoidance, it's likely that bearer bonds will eventually go the way of the dinosaur. Investors in these funds can pay annual fees of 1pc or more when they could pay as little as 0.06pc for equivalent trackers. To be included, funds must hold all the stocks or bonds in the index concerned, not just a selection. Hargreaves statistics bear out this theory, with 72pc of its unadvised customers invested in UK government bonds using index trackers. Given that 1% of $1,000 is only 10 bucks, the effort of purchasing the CD or bond with just $1,000 is not even worth the time it takes to make the purchase. Whatever the market closes at is about what you the price you will pay (if you are buying) or what you will get (if you are selling).
You would lose $20 by buying and then selling the stock, which would soak up $20 of the $100 return you had earned on that stock. If the stocks rose an average of 10% and you wanted to sell, you would end up with zero profit due to trading fees! See my stock picking manifesto for more details, as picking an individual stock is beyond the focus of this investing guide. You just have to turn on enrollment in your account settings at whichever platform you are using.
This is a great way to save small amounts of money until you can get enough together enough cash to make a stock purchase worthwhile. Rather than buying $100 worth of stock (and letting the $10 trading fee kill your return), you first have to save up to get enough money to make the purchase worthwhile. Hardly enough to retire on – based on inflation projections that will likely only be a few month’s cost of living! When people visit this site, ads are displayed, and I make money on this advertising as a result.


You could then update it yourself and continue to add articles much like I do to this website. WordPress is extremely easy to use, so you can operate the site and add new posts with little technical knowledge. You would want a site that already makes at least $50 per month before spending $1,000 on it. While the percentage is low, people who order on Amazon tend to buy a lot of products, and you get commission on their entire order.
Monitor your comments section (make sure comments are enabled) and engage with your readers. Starting and owning your own online business is easier than you think and the returns can be many times larger than market average! Second, the company may pay out some of its net income to the shareholders in the form of dividends. These emerging markets (and others) with quickly growing economies will offer higher stock market returns than the slower growing countries.
However, I guess if I had to predict a growth rate myself, as Evan mentioned, I’d be on the more conservative 5% side.
People should not invest in assets for which they will be charged more than 1% per year, and less is even better. Thus, I suggest making sure you have at least some allocation to large caps and international stocks in the equity portion of your portfolio.
Thus, as you so aptly stated, one must take a bit of risk in their portfolio in order to get a real (inflation adjusted) return. Please do not construe the suggestions on this website as recommendations for your personal situation.
This term came from the fact that paper bearer bonds had "coupons" that were to be clipped and redeemed for the interest payment. It also required the issuer of bearer securities to pay an excise tax of 1% of the principal value multiplied by the years to maturity. Any rational borrower would prefer to pay 3.3% in annual after-tax interest rather than 5%, plus up-front excise taxes, and thus the issuance of bearer securities came to an abrupt halt.
Despite its downturn, however, gold has soared 224% the past 10 years, according to Morningstar.
Saving for a comfortable retirement means saving a large percentage of your income, and letting compounding interest work for you. As a result, you have come here seeking an alternative place to put your money in order to make a meaningful return. Discount brokers cannot buy and sell your stocks for free as otherwise they would have no way of making money.
DRIPs really help improve the long-term return on stocks, so make sure you select this option. Rather than just let this money collect marginal interest in your savings account, you can set up your account on a discount brokerage to deposit $50 per paycheck into these funds with no trade fee. While there is always risk in the market, picking 4 or 5 different stocks across different sectors is a great way to protect your money in the long run. As I continue to write articles for this website and my reputation grows, more and more people will come to see what I have to say. For example, imagine you liked stocks and investing, you could buy a website much like this one (this one is not for sale – sorry!) and then continue to add new articles each day.
A lot of developers know how to use WordPress as well, so if you grew the site and eventually wanted to update the look of the site, you can find a designer to do this easily for you. Check to see if the website you are thinking about buying ranks as the first result in Google for this query. These ads are automatically generated to cater to the individual visitor, so it is a completely hands-off revenue stream. Commissions can add up quickly, especially considering how well Amazon converts browsers into buyers! However, due to trading fees, you will have to pick 1 or 2 stocks in order to prevent buying and selling fees from killing your investment’s potential return. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. I will make a small commission on the referral, so it does help me out a lot and makes sure I can keep this site up and running with good free content.
This means you can buy $333 worth of GOOG, $333 worth of AAPL, and $333 worth of AMZN (Amazon), getting a fraction of a share of each. Once you save up $500, you can afford to make a stock purchase without fees hurting the returns too much. It takes no technical skill to operate the website as it runs on WordPress (see next section for more details) – just the work of regularly adding new articles and content to the website. If the website you are thinking of purchasing does not rank #1 for its own name, avoid that domain as it very likely has a Google penalty. You can search around for a website that looks interesting and is fairly priced and put in a bid. Before Fiverr, I routinely paid $50-$100 for work that is of lower quality than I get on Fiverr for $5=$10!
This makes for quite a large website and can be very profitable for you if you just stick to it.
After you invest your first $1,000 and begin saving to invest more, consider investing small amounts into funds until you can save up $500-$1,000 and then make your stock purchases all in one block. Per FTC guidelines, this website may be compensated by companies mentioned through advertising, affiliate programs or otherwise.
Also, since LOYAL3 has no trading fees, you can purchase all three without having to worry about losing all of your gains to fees. If I stop updating the site, I will make less and less money as my content becomes less and less relevant and people forget about my site.
A lot of shady website owners that get their sites penalized by Google for violating guidelines will then try to unload those websites onto unsuspecting buyers. You can always come back and hire a developer a year or two down the road if you manage to grow the site significantly in the mean time. If you are not willing to accept risk, please do not invest and consult with a certified financial advisor.
Websites tend to be fairly priced on Flippa, but you also will not find a steal here either as there are a lot of buyers.
Equity mutual funds, which invest up to 100% money in stocks, can easily give 12-15% returns a year on an average in the long run.
Long-term capital gains from equity mutual funds (with over 65% equity exposure) are tax-free, making them all the more attractive. Those with slightly lower risk-taking ability can opt for equity-oriented hybrid funds, which invest 65-70% in stocks and the rest in fixed income securities such as bonds and treasury bills. Those with limited risk-taking ability, for instance people close to retirement, can go for debt funds, which invest in government and corporate bonds. This is disciplined approach towards investment which is vital for earning good returns over a longer time frame.
Under this, you have to contribute at least Rs 6,000 a year in a Tier-I account and a Tier-II account. The NPS offers three types of funds and you can divide your corpus between these as per your risk appetite.



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