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Bigowl's Auto Rescue Blog

Tools or Toys

I have been watching the TV show "Flipped Off". The show is about survivor's most villianous contestant Russell Hantz and his brother Shawn flipping houses in Houston, TX. His personality aside the show is interesting to me in several ways.

First it shows how they go into a house that is neglected and totally trashed and basically remake it into a nice home. They do all this and make a nice profit too. I have always been interested in different methods of investing and read a lot about it on my down time while being a over the road truck driver.

I have read and studied real estate, stock market, and Forex extensively. I am not offering any legal or otherwise binding advise. I suggest that you consult your legal and tax advisers before making any investing decision. I am presenting this discussion as thought provoking  and informational only.

I have found the simplest and in my opinion the best investment option for most people would be a D.R.I.P. stock plan. D.R.I.P. stands for Dividend Re-Investment  Plan. They are generally low cost start up of $50-$100 dollars. The way it generally works is that you buy the initial stock minimum and whenever there is a dividend declared it buys you that amount of stock to include partial shares.  For example you own 10 shares of XYZ Inc. and they declare a 10 cent dividend. If the stock is at $10 a share you would get 10x.10= $1 or 1/10 of a share so you would have 10 1/10 shares. 

Next investment is easy to get in but takes more work to educate yourself. That is the Forex or Foreign Currency Exchange. It used to be only big money investment banks were able to invest in the Forex, but now you can open micro account for $100-$250 dollars depending on the brokerage house you use. Forex can offer huge profits but there is high risk also. A person can lower their risk by studying Forex and there are brokerage houses that offer real life practice accounts that are free and help you learn before you actually invest your money.

Lastly we will touch on real estate investing. A lot of the past bad economy has been blamed on the collapse of the real estate bubble. I want to clarify that a little. In my opinion the real estate bubble collapse was based on speculation and unscrupulous money lending practices. If you look at the nation as a whole real estate prices are all over the place. In some places like Atlanta, Ga. you can buy a nice 3bed 2bath brick home for 125-150k. In  San Francisco, Ca. that would not get you a one bedroom apartment. In a lot of markets the price is based on supply and demand. Throw in speculation and the price rises faster than true value. Throw in money lenders giving out loans to unqualified and unknowing buyers and you have a recipe for disaster. There are many people that invested in real estate in a prudent buy-hold-rent plan that although they may have paper losses still retain their holdings and for most part income.

When it comes to investing it is often a choice of Tools versus Toys. When you spend your money on tools (stocks,bonds,Forex,real estate, etc.) it works for you and over time your money grows. When you spend your money on toys ( high-end TVs, electronic games, boats, etc.) you may get immediate gratification but the toy does not hold value and in time costs you money. 

My advise is to read, go online and get educated on budgeting and investing. If this interesting to you let us know and we will expand and post more investment information. 

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