Most people know that the best way to begin building wealth is to purchase real estate. After all, real estate is one of the few investment markets that is independent from other economic trends. Regardless of recession or inflationary periods, or wild rides on the stock market, real estate provides investors with a strong, steady increase in values.
This return on investment, and the ability to save money, is one of the reasons most people try to purchase a home. But what many people don't realize is that not only does it make a lot of sense to invest in a primary residence, it makes just as much sense to buy a second home, and receive many of the same financial benefits. There's never been a better time to make a second home investment.
In fact, many experts are suggesting that purchasing a second home for investment purposes is one of the smarter investments an individual could make. Investing in real estate isn't just for the rich and famous. There are a number of real estate opportunities that are quite affordable for the average investor, like condominiums and small homes. There are financing options that make the investment painless.
Let's suppose you've always wanted to own a second home for a vacation property. How much of the year would you or your family be using the property? For most people, the vacation property will be used a couple of months of the year at best. The rest of the year, the home can be rented out, sometimes creating more rental revenue than the mortgage payment. And of course, there's the appreciation of the property as well. In a few short years, you've grown a minimal investment into a substantial return, and had the benefit of the use of the property for your family vacations.
Another option is to consider a second home with permanent renters. Again, you can easily find mortgage options that require little or no down-payments, low interest rates, and low monthly payments. Your rental income covers the monthly payment, and you have a property that will only appreciate in value.
Second homes are also great transitions into retirement. Imagine having a second home rented out for the time being, but available for your use upon retirement. You may even have the home paid for by your retirement.
If you've owned your primary home for a few years, you may be unaware of the number of mortgage plans available that make owning a second home so affordable. Contact your mortgage agent to get information on these mortgage programs, and you'll soon be enjoying the wealth and security of a strong second home investment.
By : Jeff Nelson
Go to http://www.phoenix-arizona-home-mortgage.com and get a free copy of Jeff Nelson's, "7 Tips to Avoiding the Biggest Mortgage Mistakes," a 10-page report that describes the mistakes to avoid when purchasing your new home in Phoenix, Arizona.
Tuesday, October 13, 2009
Monday, October 5, 2009
Investing: Level-Headed or Lazy?
Passive investment management may be the Rodney Dangerfield of financial strategies--it gets no respect. Active investment strategies have had the spotlight so long, some investors may be surprised to find there is an alternative to stock picking, market timing and other faster-paced, more glamorous methods.
Active investment management uses research, investigation and analysis to select investments that the selector believes will outperform the general market indexes. Passive investment management invests in broad market sectors and accepts the average returns those sectors produce.
The research, investigation and analysis inherent in active investment management come at a cost. Active management usually results in higher turnover within the portfolio, potentially generating trading costs, commissions and taxes. Those costs should be calculated against the higher gains that active investing may have over a passive strategy; in other words, is the potential for additional gain worth the near-certainty of additional cost.
Passive investing seeks to take some of the prognostication out of the investment process, as well as the possible emotional impact. Daily evaluation and re-evaluation of investments can cause you to overlook more subtle trends and to lose sight of your personal big picture. It's easy to get caught up in the next great investment pick or strategy. Ignoring the hype in favor of the buy-and-hold tactic may help keep your portfolio on course.
Passive investment management does not, however, mean purchasing investments and then ignoring them. Your portfolio will need to be rebalanced periodically to make sure those sectors performing better than expected don't become too great a share of your invested assets. Changes in your personal life (marriage, children, divorce, death of a spouse) may also necessitate changes to your investment plan.
Neither does it mean foregoing the assistance of an investment professional or financial advisory team. These professionals should help you determine your investment goals, the amount of money needed to reach them and the best strategies for accumulating that money. They play an important role in keeping you on the right course, especially when deviating becomes most tempting.
All investments involve risk, whether selected as part of an active strategy or a passive one. Passive investing does not "loss-proof" your portfolio. On the flip side, past success is not indicative of future performance, as active-style proponents might have you believe.
In the end, you have to weigh the lower costs, style consistency and tax efficiency of a passive investment strategy against the potential greater returns of an active investment strategy. Your financial advisor can play an important role in helping you determine which style best suits your investment time horizon, risk tolerance and investment experience.
By : Robert Valentine
Robert Valentine is a well-known expert in the matters concerning investors. His articles on financial planning matters that concern investors have been published by several publications throughout the United States. Please visit his website, http://www.themoneyalert.com to view his column.
Active investment management uses research, investigation and analysis to select investments that the selector believes will outperform the general market indexes. Passive investment management invests in broad market sectors and accepts the average returns those sectors produce.
The research, investigation and analysis inherent in active investment management come at a cost. Active management usually results in higher turnover within the portfolio, potentially generating trading costs, commissions and taxes. Those costs should be calculated against the higher gains that active investing may have over a passive strategy; in other words, is the potential for additional gain worth the near-certainty of additional cost.
Passive investing seeks to take some of the prognostication out of the investment process, as well as the possible emotional impact. Daily evaluation and re-evaluation of investments can cause you to overlook more subtle trends and to lose sight of your personal big picture. It's easy to get caught up in the next great investment pick or strategy. Ignoring the hype in favor of the buy-and-hold tactic may help keep your portfolio on course.
Passive investment management does not, however, mean purchasing investments and then ignoring them. Your portfolio will need to be rebalanced periodically to make sure those sectors performing better than expected don't become too great a share of your invested assets. Changes in your personal life (marriage, children, divorce, death of a spouse) may also necessitate changes to your investment plan.
Neither does it mean foregoing the assistance of an investment professional or financial advisory team. These professionals should help you determine your investment goals, the amount of money needed to reach them and the best strategies for accumulating that money. They play an important role in keeping you on the right course, especially when deviating becomes most tempting.
All investments involve risk, whether selected as part of an active strategy or a passive one. Passive investing does not "loss-proof" your portfolio. On the flip side, past success is not indicative of future performance, as active-style proponents might have you believe.
In the end, you have to weigh the lower costs, style consistency and tax efficiency of a passive investment strategy against the potential greater returns of an active investment strategy. Your financial advisor can play an important role in helping you determine which style best suits your investment time horizon, risk tolerance and investment experience.
By : Robert Valentine
Robert Valentine is a well-known expert in the matters concerning investors. His articles on financial planning matters that concern investors have been published by several publications throughout the United States. Please visit his website, http://www.themoneyalert.com to view his column.
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