What You Need To Know About Gold Backed IRA

In case you are looking to make a good investment, you should consider gold backed IRA. Since I know many of you are not quite familiar with this process, I decided to write a couple of sentences that will help you ask the right questions and make the right decisions.

When you are about to setup your retirement account, you have a couple of options available. And since IRA and gold sound attractive, I’m sure you would like to more know about this particular option. A lot of baby boomers are interested to buy gold because they receive a lot of signals that it is important to buy gold now! So it’s only natural that a lot of folks are calling their friends or financial advisers to get some help.

The information I will provide here is quite simple and will help you understand the basics about gold backed IRA.

First, there are several different types of IRAs and the one you choose will depend on the goals you have. Self Directed type allows you to call all the shots. It’s a popular choice where your funds are transferred from your existing IRA. You can take all your funds and move them to a new account or have the company move your retirement funds for you.

Second, it is important to choose the right type of metals. You should know that the IRS doesn’t approve all gold, only bars or bullion coins. They come in different denominations, from 1/10 of an ounce to 1 ounce. Gold, platinum, palladium and silver are your options. To this day, the best choice has always been gold so I advise you to get this type of metal only.

Please note that you will need to work with an authorized precious metal dealer in order to set up an Individual Retirement Account.

New York’s Ultra-Luxury Bubble Hits A Snag

The real estate safe haven of Manhattan‘s ultraluxury real estate hit a snag, much like a balloon popping at the spire of its very own skyscraper’s penthouse. The world’s super rich invested in big cities world wide to protect their earnings from the troubles of the Great Recession that gripped the rest of the world starting in late 2008. Though, the rush into luxury properties started well into 2014 and has continued nearly unfettered.

Several major monetary policy changes sent foreign and cash investors to the exterior, free-falling down the side of these buildings. For one, cash investors, many of whom had earned their money in illegal activities such as human trafficking, the sex slave trade, gun running or other nefarious and undocumented manners used to have a great opportunity to launder their money in legal manners — real estate. In fact, until a couple of years ago, while the rest of the United States has clamped down on the potential financial flow of terrorist and illegal money, real estate was largely untouched. In other words, realtors did not have to (and often did not) ask questions about the source of the cash used to buy 100-million-dollar properties, particularly by foreigners. sales-prices-in-new-york

These days, even in the United States and even in New York City, where a big portion of 9-11 occurred, foreign cash buyers, in particular, are either not allowed or questioned to the point where it would illuminate just how they made their money. Inconveniently to U.S. luxury markets, China has put bumpers on money leaving its nation as well. That was a huge chunk of the money that was being invested in the ultra-luxury markets. Not to mention that many of the once flush with cash Chinese investors lost it all with their own stock market troubles by the close of 2015 and into the open of 2016’s trading.

How Does This Shrinking Buyer Pool Change Real Estate?
Either way, the super rich investors chose high-tag real estate because it was less volatile and it allowed them to use corporations to shroud their identities. Again, that is no longer allowed. At this point, the luxury penthouses have had to split into two places, while slashing the prices to enter the market by more than 75% of their value in some cases. For instance, where there were places selling for $100 million, the value dropped to a price of $75 million, with the properties being subdivided and slashed further in cost.

Mid-2014 marked a change worldwide in the sought-after purchase of super luxury penthouse apartments. The prices have pulled back in Paris, Singapore, Dubai, London, and Moscow. For anyone in real estate it just marks the end of a party after an extended bullish period. Sometimes even the super rich need to know when the party is over because it can easily turn into a dive bar if they linger too long. Pretty much what has happened is that the ceiling is coming down on the price of real estate. Yet, it is not reaching the dive bar state of fire sales yet either. It turns out that even in Manhattan proper the price of real estate that is around $3 million is considered the prime arena because that’s where people who are living there are invested at and willing to spend to live there. Best to read the signs and keep up with the times to understand how the future of the real estate market is looking. This is just one economic indicator that signals how to invest in stocks and the markets as well as in real estate.

Is it Possible for a Business to Profit and Contribute to Positive Changes?

Chivas, the Scottish whiskey maker, has decided to find out the answer to this question with its million-dollar fund set aside for start-up companies. The Venture campaign, as it is titled, gives entrepreneurs the chance to win a share of this fund. Read more “Is it Possible for a Business to Profit and Contribute to Positive Changes?”

Index vs Mutual Funds Investing

From everything I have read over the last ten years within the financial industry, high management fees (referred to as MERS) that mutual funds charge hurt the portfolios of small investors. If we in fact take a closer look at the Canadian industry, a majority of investors pay around 2% (and often more) for investing in mutual funds. So if you make an investment of $1,000 and the fund makes 5%, all you will earn is $30, with the other $20 going to your mutual fund company in order to pay the management fees (as well as the advisor who sells the fund). If you think about it, based on your investment return that’s a 40% commission.

But it gets even worse: just think if the fund that you invested in went down 5% in a bad market. Then you would show a $70 loss or -7%. No matter what, mutual fund companies are going to get their 2%. The rest will either go into your pocket or come out of it!

Unfortunately, for a very long time, mutual funds were just one way of diversifying into multiple products (bonds or company shares) that were professionally managed within a single trade. One mutual fund could be purchased by an investor, including part of it being invested into something safer such as bonds, as well as international, American and Canadian company shares. For those without a lot of investment knowledge, mutual funds do the job but they are also expensive.

The ETF Revolution

Like any other industry, whenever a product shows high profit margins or is overpriced, other players enter into the market and offer alternative options. Vanguard was probably the first to come up with an alternative option to mutual funds. It offered one of the first ETFs. Exchange traded funds (ETFs) are an alternative way of purchasing multiple stocks or bonds within one trade.

Simply put, an ETF refers to a group of various investment products (mainly bonds or company shares) that represents a basket. For instance, the ETF iShares S&P/TSX 60 (on the stock market it ix XIU), represents 60 of the largest companies trading on the Canadian market (TSX). An individual purchasing 1 unit of XIU is purchasing a basket that contains the 60 largest companies that are traded within the Canadian market. The ETF does everything for the investor, he doesn’t need to know anything about them or be able to mange them within his portfolio.

So what is the difference between purchasing the XIU and Canadian stock mutual fund? Around 2% in management fees. According to ishares.com, XIU fees are 0.18%, while a majority of Canadian stock mutual funds charge a management fee of more than 2%. What that means is that a portfolio manager managing a mutual fund needs to outperform the ETF by at least 2% before even $1 is generate for the investor. The following is a quick example to illustrate this:

$1000 Invested in Mutual Fund

Investment Fees: 2.18%
Investment Return: 5%
Net Return : 2.82% ($28.20)

$1000 invested in XIU

Invest Fees: 0.18%
Investment Return: 5%
Net Return: 4.82% ($48.20)

As can be seen, there is a large discrepancy between the ETF and mutual fund even if the same investment return is shown (before fees).

So Why Are Individuals Still Investing In Mutual Funds?

My answer is because it’s harder managing a portfolio than it is making a peanut butter sandwich!

Some people will then recommend a “coach potato” style of investing. This approach involves choosing a couple of ETF indexes that are a good reflection of your risk tolerance. Say you wanted to have a balanced portfolio (around 50% in bonds and 50% within the stock market. A portfolio could be built with just 4 ETFS:

10% in ETF that tracks International stocks
15% in ETF that tracks US stocks
25% in ETF that tracks Canadian stocks
50% in ETF that replicates the DEX (Canadian bonds overall)

I agree that just about anyone who has a pen, sheet of paper and calculator can build this kind of portfolio. You then rebalance your portfolio two times per year to ensure that you show the same percent always (buy low, sell high). That is a fairly effective method for managing your portfolio and tracking your return on investment in the markets (On a 5 year return, 95% of all portfolio managers fail to beat their benchmark). In addition, your management fee is less than 0.50%, which is 1.50% cheaper at least that it would be for the same investment that was part of a mutual fund. So, for example, if you were to invest $100k into this portfolio, you would save $1,500 a year in fees alone!

However, it isn’t that easy. It just isn’t that easy managing your portfolio.

When The Game Changes Here Is What Can Happen

Over the past year, a very low interest rate was being paid on bonds. This resulted in bonds starting to lower their value as interest rates started to rise. That’s why XBB (a Canadia ETF that tracks bonds) over the last 12 months has shown a -2.37% negative return. When the bond interest that this ETT pays is added (3.26%), the result is a small 0.89% investment return. What is the explanation of the fact that a majority of mutual funds performed better on their bond (fixed income) portion? After speaking with a friend of mine who is a great ETF investing fan, I noticed that over the last 3 years his bond performance wasn’t all that great. Poor returns on Canadian bonds mainly explained this.

I assumed at first that everyone had the same environment, until I was able to check the performance records of a couple of mutual funds. During that same period, a majority of mutual funds were showing better returns. How was that possible? It isn’t due to portfolio managers being better? It was due to the fact that they were including other classes within their fixed income portfolio like US bonds, international bonds and high yield bonds. That is why, mutual funds have been able to beat the coach potato classic portfolio over the last 3 years. It was due to the fact that other other kinds of investment classes were included.

Index vs Mutual Funds Investing

It’s true that if the same exact model had been replicated with 8 to 10 ETFs, then it probably could have beaten out the mutual fund. However, who is there to tell you that this type of portfolio could be made if you have adopted the coach potato style of investing? Your online broker isn’t going to. All he does is perform the trades. Your advisor won’t because you won’t have one.

You can probably see whee the problems lies with ETF investing: in order to build your portfolio and manage it, you do need to have a solid financial background. If you try doing it after just reading a couple of books, chances are good that you will have lower investment returns than the mutual fund even after the large fee that they charge.

Startups Ideas For 2016: What’s Your Best Bet For Success?

Starting your own business is the American dream, but the opportunities of today are more vast and volatile than ever before. While there are more avenues to take in building a business, the competition is incredibly fierce. Here are a few of the most promising ventures you can take in the new year.

1. Delivery Or Storage

While both sound rather boring, delivery and storage are big business in 2016 and beyond. Big companies need little companies to help them get their products to customers or to store them until the customer can pick them up. Consider setting storage locstorage and deliverykers up locally or picking up the slack for deliveries where the major companies leave off. Either way, delivery and storage can be a lucrative focus for any startup.

2. Fitness Boot Camp

No matter how advanced the world becomes, people will still need to lose weight and get in shape, and do it the old fashioned way – by working for it. If you have any expertise in fitness, think about becoming a professional consultant who runs a camp for getting people down to size. You don’t need a lot of space or equipment and the going rates are pretty steep, meaning your profits can be huge.

3. Renting A Room In Your Home

There are a lot of companies popping up that specialize in renting rooms for specific needs and events. If you’re in a popular area, such as Seattle, Atlanta or anywhere around a big sports venue, get in touch with one of these companies. You could quickly prep a room in your home for rental and thereafter, simply rake in the dough.

4. Smart Home Technology

Smart homes are unquestionably the way of the future and this is an area you can still get involved with before it becomes too saturated and therefore, competitive. Investigate products, brush-up on your programming skills or start promoting an existing home tech company. The earlier you make connections and establish yourself, the sooner you can make your mark on this growing industry.

5. 3D Printing 3d printer

You can make amazing things with 3D printers and the future for this market is virtually unlimited. Although they can be expensive, you can start making money off production right away. The key is to tap into areas that aren’t already capitalized on, and hit the ground running. You could make small parts that are currently manufactured overseas and try selling them to local companies. More and more businesses want American made items and you can offer a lower price than an overseas companies because you don’t have to ship internationally. If you’re an artist, see what kind of jewellery or sculptures you can create with 3D printing. This industry is growing rapidly and the technology changes even faster, so get in while the getting is still good!

When starting up a company, you need to know it can carry you into the future. While your ideas should be limited only by your imagination, they should be grounded in something tangible and practical. These startup ideas can lead to your success, whether you start them on the weekend from your basement or go all out in front of venture capitalists. Whatever you decide, be prepared to devote all your time and energy, and to be persistent until you reach your goals.

Real Estate Real Estate Investments

We all know that the financial economy of the world has been a roller coaster of highs and lows for many years. Since we are now getting close to the end of 2015 it is important to start thinking about the future investments that we should make throughout the 2016 year. One area that has always been of interest for most investors is real estate. Should a person invest in real estate during the 2016 year?

When choosing real estate as an investment it is important to invest in the right area which can make a big difference between making money or losing it. One of the advantages that a person has when it comes to real estate investments is that interest rates continue to be exceptionally low. Therefore, now is a great time to take advantage of real estate as an investment.

There are a few real estate investment tips that a person can consider for 2016. The first tip is to make a specific goal for acquiring additional real estate knowledge. You can do this by taking a real estate course, reading a real estate book, or by joining an association that focuses on real estate. As with everything, knowledge is power and the more knowledge that a person obtains about real estate the more opportunities they will have for success.Real Estate investigation

Another tip is to have a lot of patience. Patience is a key to having success in the real estate market. It always takes a lot time to find a good deal. This will be especially true if you not familiar with a particular neighborhood or area. Make sure that you take some time to browse through all of the local MLS listings. Talk to local experts and ask them pertinent questions that will help you to understand the local real estate climate.

A good negotiator is not a skill that everyone has. However, anyone can become a good negotiator by following a few basic principles. Never shy away from negotiating aggressively with a seller to obtain the best deal. Look for a situation where you will get the best deal while at the same time providing the seller with something that they desire. If the negotiations are not progressing in your favor do not be afraid to walk away from the deal. There will always be another deal down the road.

When purchasing a property look for quality over quantity. This will be especially true if you are just beginning to look into real estate as an investment. You may be tempted to purchase a dilapidated property in a tough part of town at a low price. This however could backfire because it will be harder to resell the unit because of the location. A wise and successful real estate investor once said that there are only three key points when choosing a resalable property. The three key points are location, location, and location. Therefore, if you are about to invest in real estate for 2016 consider some of these key tips.

Loans For Entrepreneurs: What To Consider

Being a business owner comes with an amazing sense of pride. You are your own boss and you can do something that you love. Not only that, but if you are lucky enough, you can share it with others.
Being an entrepreneur is something that you should be proud of and word hard to make your business successful. One way that you can find success is by growing your business. Many times, though, you will not have the working capital to expand. If that is the case, you should consider looking into loans for entrepreneurs.

Why Take Out A Loan

Being a business owner and getting a loan to grow your business can be beneficial. While it may cost money initially, it will pay off before you know it. Depending on the type of business you run, you may choose to add more inventory, hire additional workers, upgrade your technology, open another location, or even move to a better location. There are many changes you can make to grow your business and taking out a loan can help you do this.

How To Take Out A Loan

Taking out a loan for your business can be quite helpful, but how do you go about doing so? You should begin by estimating how much of a loan you would like to take out. This may take you some time as you consider all of the changes you would like to make. Do your research to find out how much each of these improvements will cost. Once you have an idea of how much of an entrepreneurial loan you would like to take out, decide which financial institution you would like to apply for the loan at. If you are happy with your bank, you should start there. But, if you are thinking of moving banks, now would be a good time to consider the switch. Having a good relationship with a financial institution can be quite beneficial for any business. As soon as you decide where you want to apply for your loan, contact the bank to set up an appointment with the lender for entrepreneur loans.

By carefully considering a loan that you want to take out to improve your business, you can get the loan that best suits your needs. Use the information shared here and you can take out the best loan for your situation and watch your business take off.