I didn’t need the whole world to tell me that we were headed into recession in late 2008 to know that it was probably time to get the heck out of the stock market. Wild swings up and down may be fun for some people, but I like my investment returns to be a little more steady and a little less risky.

That makes real estate one of the most perfect solutions that I could ever hope to find. If you are like me and have had it with the wild swings of the stock market and are looking for something a little more dependable, then real estate may be right for you too.

But with real estate investing you have a whole new set of things to learn before you can even think about getting started. So today I thought I would write a short article and discuss several ways to analyze real estate investment in order to determine whether or not you should invest in it. Many of these analysis methods are mathematical in nature but you don’t have to have an advanced degree in mathematics in order to put them to use yourself.

First I want to talk about the gross rent multiplier. This is the sales price divided by the gross annual rents and it will tell you the number of years of rent that you will have to get in order to equal the sale price of the property. In this case you want a gross rent multiplier as low as possible.

Next calculate the debt conversion ratio. This is just basically the net operating income divided by the annual mortgage principal plus interest payments. Just to make that clear what you do is add your interest payments to the annual mortgage principal and then take that number and use it to divide into the net operating income. So it looks like this: Net Operating Income / (Annual Mortgage Principal + Interest Payments).

The DCR will show you the ability of a project to service its debt obligation. A lender will usually want you to have a DCR that is at least 1.25 which means that the net operating income will be a least 25% larger than the principal and interest payments.

Next you should calculate the overall return on capital. This is simply the net operating income divided by the total investment. It will measure the productivity of your investment and is generally more reliable than the gross rent multiplier in most cases.

Finally you should calculate the cash on cash return which is just cash flow before taxes divided by your initial investment. A lot of investors will use the cash on cash return ratio as an indicator of how productive the equity will be in a given project. If you’re going to be primarily concerned with the cash flow that your project throws off then this is a good number for you to take a look at.

Hopefully this list has been helpful to you but you should realize this is far from a complete list and there are many other things you should calculate before investing in real estate. Hopefully this list will get you off on the right foot though.

Written By Jason Markum

You should have seen my stock portfolio within the last few years! Whew! The stock market is up, the stock market is down, the stock market is sideways and anything else you can think of… it’s a roller coaster and yes I realize that we’re in the middle of a recession that has been going on from 2008 through to 2010, but that doesn’t make it feel any easier to watch your life savings fluctuate so wildly from day-to-day.

Those wild fluctuations have convinced many people to get out of the stock market completely and to instead focus on other means of investing, particularly real estate as it has been a solid income producing asset for many many years, the current recession notwithstanding.

But I find that many new investors don’t know exactly what to look out for when it comes to investing in real estate so I thought I would write a quick little article today to give you a heads up and show you certain things that you can look for when evaluating a new real estate investment.

First you must always review the underlying properties of the investment very carefully. If the investment is fairly substantial, hundreds of thousands of dollars or more, it’s always a good idea to find an expert to personally inspect the property as well as the community for you. There are a million things that you won’t know to look for that they will so it’s essential that you find someone that you’re comfortable with that you can develop a good working relationship with.

Besides hiring somebody to inspect property for you, here are some things that you can look for yourself.

First look at the acquisition cost of the property. This will include both the land as well as the buildings and try and break it down on a square foot basis. After you find a square foot number, compare it to other properties that have sold recently in the same neighborhood. How do they compare?

Next look at the type of construction. Is it a wood frame property or a brick property? Does it have any amenities like a pool or fire places or landscaping. Next look at the underlying mechanics of the building itself such as heating and air-conditioning as well as plumbing and electrical and insulation and the quality of its roofing. Knowing whether or not these things will need upgraded or updated is essential before making any type of investment.

Finally look at the occupancy. Is the building full of tenants? Are the tenets fully paid up with their rent? Is anybody behind on rent and if so how much and for how long. Next take a look at the applicable city laws because some towns have laws against evicting tenets that may make it difficult for you to turn a profit on your investment if you’ve got spend extra money on massive legal fees just to get a paying tenant into the building.

There are many different things look for when getting into real estate investing but hopefully these few things that I have explained to you today will set you off on the right foot down the path towards real estate investing profitability.

Written By Jason Markum

Oh the stock market! So exciting, so much fun, so profitable, so dangerous. It’s easy to get swept up in the excitement of the stock market… placing bets, pitting your mind against the world, and making money - hopefully making money - oh please let me make just a little money -hey what happened to my money?

Many new investors often wonder what the best way to invest in the stock market is. Should you invest in individual stocks, or should you invest in a good solid mutual fund or even an index fund? That’s exactly what I’m going to talk about in this article today.

Most new investors dive right in and start picking individual stocks using either a stockbroker or an online stockbroker account like E*TRADE or something like that. This may not be the best idea for everybody for two main reasons. The first one is that you may not know or have the training necessary to pick good stocks. The other reason is purely mathematical and I’ll explain that in a minute.

When it comes to individual stocks there are two things you have to consider. The stock market is all about risks and assessing different risks. For individual stocks there are two main risks. The first one is individual risk that comes from the particular company and their industry. Will their new product take off? Will a competitor come out with a better product? Will the CEO quit? Is there fraud? Will the company make its quarterly earnings estimates? These are the sort of things that are related to the stocks individual risk and they are what most investors focus on.

The second type of risk is the market risk. Like it or not, each and every stock is correlated to the stock market in varying degrees. What this means is your company may have had a record year which would make you think the stock was about to shoot up. Unfortunately you may be in a recession that is dragging down the entire market. That drag can drag down an individual stock such as the one you have invested it. This is what we refer to as market risk.

The problem most individual investors have is that they focus on mitigating individual risk and they ignore market risk and then they get side-struck by it. Fortunately there is a way to eliminate market risk and that is through diversification.

It is mathematically possible to completely eliminate market risk by diversifying broadly. The problem is, most individual investors can’t afford to purchase enough stock to satisfy the mathematical requirements. You may have to purchase 100 or 200 stocks to fully diversify away the market risk and that’s just not realistic for most individual investors. Heck the transaction costs alone will eat up most of your profit.

That is why most individual investors, especially those just starting out, choose to invest in a good solid mutual fund because those mutual funds do in fact diversify away most of the market risk. In fact, that’s one of the main reasons why people invest in them is because they are able to buy hundreds of different stocks where an individual investor couldn’t.

So there you have it; why you should invest in mutual funds and why you should stay away from individual stocks if at all possible.

Written By Jason Markum

One thing that I like about investing in the stock market are dividends. Of course in order to get those dividends you have to worry through the massively nauseating swings up and down that the stock market is famous for that can wipe out your portfolio before you know it. I like the income that dividends produce, but I don’t like the risk involved in earning it.

If you’re like me then you may be looking for alternative investment opportunities that are not dependent on the stock market but are still geared towards someone looking for income. Fortunately real estate investing may be just the thing for you.

Luckily, these days, real estate investing doesn’t necessarily mean owning a bunch of small rental units and worrying about fixing broken toilets on the weekends. In fact there are many forms of real estate investing that are better suited to producing income and I’m going to talk about them in this article today.

One form of real estate investing is something that is called a participating mortgage loan. These funds hand their investors capital to other real estate investors, which is quite interesting. In return those investors pay a fixed rate of interest plus a share of any future increase in their cash flow from the properties that they own as well as any appreciation in the underlying property.

This is possible because of the type of mortgage that you create which spells out that the investor will pay a basic interest rate as well as increases in future cash flow of the underlying property.

While the interest that you will earn on these deals is a nice bit of income, what you should be especially interested in is the possibility for future increases in cash flow from the appreciation of the underlying properties themselves. That’s where some of the real money comes into play and that’s what makes these types of investments especially attractive and exciting.

What happens is that properties are leased out. Over time those leases expire and when they do new tenants are usually found who sign new leases. The trick is, over time those leases will call for more and more rent as I’m sure you have seen yourself if you’ve ever rented anything in your life. Whenever your lease expires and you have to re-sign your rent always goes up. It is this increase in rent that can transfer over to you the mortgage owner in these particular deals.

Of course it’s not all a bed of roses, you still have to be careful with who you select to loan money to. Never invest in a participating mortgage loan given to somebody who doesn’t have a solid track record of property management under their belts.

But just like any other investment you have to do your homework and if you do your homework correctly then these investment vehicles can be a fantastic way to take advantage of income producing steady real estate gains without the hassle of managing the property yourself; because who really wants to get woken up at 3:30 in the morning because your tenet’s toilet exploded?! Not me and now, not you!

By Jason Markum

Investing in real estate can be very very good idea. In fact many people turn to real estate to fund a major portion of their personal retirement accounts because they just don’t trust the volatility that comes with the stock market. Especially during recession times like we are facing today!

With real estate they get income in the form of rents, and they also get steady appreciation in the form of property price increases over time. These increases usually keep track with inflation or increase greater than inflation which makes them especially attractive for retirement type planning.

But there is one thing you have to understand when investing in real estate and that is the passive loss rules. Almost all rental real estate activity has been categorized by tax reformers as passive activity. What this means is that losses from those passive activities can only be used to offset passive activity income only. You generally can’t use it to offset portfolio income such as interest or dividends or capital gains and you certainly can’t use it to offset other income such as salaries and wages.

So what exactly does passive mean? Basically it means that the investor doesn’t participate in managing the investment in a day-to-day manner. You aren’t out there fixing broken plumbing or stoves in your rental houses, for instance. Your main job is to supply the money to buy the thing to begin with and that’s pretty much all you have to worry about… that’s what passive means.

There are some exceptions. If you ARE primarily managing rental real estate and you have adjusted gross income that is under $100,000 or so then some of your real estate income may be allowed to offset some of your non-passive income. This may have been phased out though by the time you read this article to be sure to check with your accountant or CPA or tax attorney before hand.

Of course, if you don’t lose money on your investments; and really that’s the goal anyway isn’t it, then you don’t have a whole lot to worry about when it comes to offsetting passive income losses and if you have most of your retirement income dragged into real estate then that probably means that you don’t have significant stock market holdings which means you won’t have much dividend income or capital gains income either so at some point this may be come a moot point to you but it’s still something that you need to keep in mind and it’s something that all real estate investors should be thoroughly schooled in before making any types of investments whatsoever.

Investing in real estate can be a fantastic way to save for your retirement. Just make sure you know all the tax rules backwards and forwards so that you don’t get walloped by the big bad IRS…Because the last thing you want to do is spend your glorious retirement years arguing with the tax man during a yearly AUDIT! With a little careful planning, you can make sure that doesn’t happen.

Written by Jason Markum

If the stock market, with its wild swings up and down and it’s inconsistency and dangerous nature have put you off of that form of investing, then you may be ready to take the leap into real estate investing. The fact of the matter is that real estate investing can be a great way to add stability and growth to your portfolio and at the same time enjoys fantastic tax benefits that I’d like to talk about a little bit in this article today.

It is true that tax reform has changed many of the tax benefits that we used to get from owning real estate, there are still many rather significant advantages in the tax arena that continue to make these investments attractive even today in the crazy housing meltdown that we’re currently witnessing.

One way to take advantage of the tax man with real estate involves past real estate investments. This particular plan is going to be very useful to many people who invested in real estate before the recession of 2008 to 2010. Why is that? Well frankly it’s because many of those investors have lost an arm and a leg since then.

With the bursting of the real estate bubble and the massive drop in housing prices, you would be hard pressed to find a real estate investor who doesn’t have massive losses. And that’s where this strategy comes into play. If you owned real estate that generated losses in previous years then you can invest in new income producing properties today. In many circumstances the new income that is generated today will be offset by those losses that you held in the past from a tax point of view. Be sure to talk to your accountant or CPA or tax lawyer before engaging in this particular tax strategy.

Another strategy is to aggregate your losses from many different tax shelters not just the ones from real estate. Most people don’t realize that losses from a real estate passive activity can usually offset income from any other type of passive activity. And the opposite remains true as well so if you are involved in any sort of passive shelters like equipment leasing or R&D or things like that you can take advantage of this tax benefit.

Finally I should say that many investors look towards real estate investing simply because of the tax shelter benefits. Heck I wrote an entire article about it! But the fact of the matter is that tax issues should never be the overriding reason you make any investment. Instead you should simply focus on the economic reasons of the investment. Is it a good deal? Will it offer significant income? These are the most important factors when it comes to making any investment decision and any tax benefit should be secondary in your mind.

Written By Jason Markum

With the massive swings in volatility associated with the stock market in recent years, many people look for different forms of investment in order to save for their retirement. Many people choose to invest in real estate primarily as the main vehicle for their retirement planning.

This creates several problems that need to be addressed that deal primarily with timing. Rental properties are great but unless you structure them correctly they may not throw off the right amount of income at the right time for you to take advantage of them when you retire and need the money to live off of. Of course, this could all be taken care of with a few careful steps that you can take and which I’m going to discuss in this article today.

The best forms of real estate investing from the point of view of retirement planning are called limited partnerships. These partnerships invest in a pool of shared appreciation mortgages or sometimes flat out pay all cash for income producing properties. Many partnerships include a combination of the two as well.

I find that these partnerships afford you the largest possible appreciation potential, the best tax gains, all at the lowest risk which is especially nice when you’re talking about investing in them for retirement plans. Because there’s one thing that we can all agree on and that is lowering risk is important for retirement planning. The closer you get towards your retirement, the safer you need your investments to be as I’m sure you are aware of.

There are seven or eight main criteria that most people will agree are the most important for investing with an eye towards retirement. They are…

Safety; will your money be returned to you without being diminished in any way? Income; retirement accounts are required to throw off cash. Growth; you want both the underlying assets to grow and the income that they throw off to grow over time to keep pace with inflation at the very least. Inflation; as I just referred to your retirement account must grow at least as high as inflation every year and hopefully more.

Liquidity; certain real estate investments are very illiquid so you are going to need to structure yours in a way that allows you to liquidate when necessary. Ease of administration; the last thing you want to do during your retirement years is get telephone calls at two in the morning to fix leaky plumbing. Professional management; ditto what I just mentioned about leaky plumbing.

Making sure that your real estate investment conforms to these seven or eight requirements is essential, so before you invest in any sort of real estate deal, go through the checklist I just gave you and ask yourself whether or not the investment fits those criteria. If so then you will have successfully structured your real estate investment for optimum retirement planning.

Written By Jason Markum

I don’t know but you but I’ve had enough of the stock market for now. The recession of 2008 to 2010 has wrecked havoc on the stock market dropping it as low as 30 to 40% only to shoot back up again and then back down again; it’s a roller coaster that I don’t want to deal with anymore.

Which begs the question, what should I invest in if not the stock market? The answer may be real estate. Yes the real estate market hasn’t fared much better than the stock market during the current recession but things may be turning around which means that it might be the right time to get into real estate as we speak.

But I’m not the kind of guy that wants to own a bunch of rental units because I’m not the kind of guy that wants to get telephone calls at three o’clock in the morning because one of my tenants has just discovered that their stove is broke or their hot water heater has gone on the fritz. I’d like to take advantage of real estate investing without all the hassle of… well… tenants!

If you’re with me, then read on because that’s exactly what I’m going to talk about today; alternative forms of real estate investing that you may not have ever thought about.

One form of real estate investing is to invest in real estate investment trusts or REITS as they are commonly referred to. This has been a very attractive form of real estate investing in the past, but these entities are often closely tied into the stock market and that market correlation has dragged down profits over the years during the recession so I’m not entirely sure that they are the best place for my money today.

One type of investing that many people have never even heard of are called mortgage loan partnerships and these may be some of the fastest growing types of real estate investments that you can find today. In addition to being fast growing, they are also some of the safer investments out there which may surprise you, I know it surprised me!

So here’s how they work. These partnerships usually invest in properties that have much higher values than the mortgages that underlying them. Usually for as little as $1000 an ordinary investor can buy a share in a partnership. That partnership then purchases mortgages on commercial properties. The mortgages that are written are written slightly differently than your ordinary mortgage allowing the partnership to benefit from any rent increases on the property over time.

One thing to keep in mind is that there isn’t often a secondary market for these mortgages meaning you often have to hold them until maturity and you can’t really just call up your stockbroker and sell these things if you get tired of investing in them or your financial situation changes.

The stock market may be in chaos right now and the real estate market may not be that much better off but we’re starting to see signs of a real estate turnaround which leads me to think that now may be the perfect time to jump back in.

Written by Jason Markum

This current recession of 2008 to 2010 has really done a number on the stock market which has forced many individual investors to reevaluate their investment priorities. Many of these investors are starting to look for alternative forms of investing, one of which is real estate.

Now I know there’s been a housing market meltdown that has mirrored the stock market meltdown in many ways, but the fact remains the same that now may be the time to get back into real estate investing. Prices have dropped dramatically, sometimes as much as 30 or 40% on properties across the board in almost every location in America. That’s my way of telling you that there are some spectacular deals to be had at the moment which only promises to get better as time goes on.

Today I want to talk about a few ways to profit from the current real estate investing environment and give you some things to focus on that you may not have thought of just yet.

Today one of the best places that we’re seeing to invest in real estate involves multiple family buildings with up to 10 units. It’s best to invest in these multiple family buildings only in towns that you currently live in. Don’t try and buy two or three of these scattered across the country because with our current economy they may take more attention and more face time on your part to get them up and profitable which means owning one in the town you currently live is going to make things much more easy for you, at least for the time being.

The great benefits of these types of investments is that they’re small enough to be managed by the owner, you. One thing you’re definitely going to want to look into before you purchase is current laws regarding these types of buildings.

Many towns have rent control laws as well as non-eviction laws that make it much more difficult for you to get rid of tenants that aren’t paying the bills. In fact this may be why the current owner has had so much trouble that they want to sell. You can’t make a profit if your tenants don’t pay their rent and you can’t even evict them without spending thousands of dollars in legal fees and many months of time.

But, if you can find one of these rental properties in your area and there aren’t any adverse laws that would affect you, now may just be the perfect time to swoop in and get a deal. Don’t be shy about offering outrageously low prices because many investors are looking to sell at any price to get out from under their mortgages.

Many investors purchased the properties with variable or adjustable rate mortgages back when things were good and are now finding that they cannot refinance those loans because the current state of the economy and the current state of the banking market which is effectively freezing credit for many people.

So there you have one very simple way to profit in real estate, even during a recession.

Written By Jason Markum

Investing in the stock market these days can be treacherous and dangerous to say the very least. Many investors are looking for alternative forms of investment to stay away from the stock market. Many of these investors turn to real estate.

There are many benefits to investing in real estate. It is often seen as a hedge against inflation because property values tend to increase at least as high as inflation year after year. With the recession of 2008 to 2010 still raging, and the government printing money like never before in order to fight that recession, any inflationary hedges you can invest in may well be worth your time.

Another reason why investing in real estate is especially nice are the many tax advantages that come along with it. I won’t spend a lot of time talking about that today though.

There is one downside to this form of investing and that is quick profits. For years investors could find incredibly quick profits by investing in realestate, often purchasing a house in the morning for no money down and flipping it in the afternoon for a hefty gain with little to no risk.

Those heady days are definitely over. In fact, many people believe that it’s that exact activity that led to the massive real estate bubble that led to the collapse of the real estate and banking markets that pushed the country into this massive recession that we now enjoy so very much!

These days if you plan to invest in property you can expect to have your money tied up for several years at a time… sometimes as long as seven or eight years before your investment becomes truly profitable. This is just fine for those of us with an eye towards long-term investing anyway but it spells disaster for the get rich quick type of investors… but maybe that’s just as well.

What are the best investments today? Some people suggest that rental property is just about the best bet you can make from an investment point of view. The reason why rental property may be about to take off is because many people have lost their houses in this current recession.

Nobody likes to benefit from other people’s misery, and the fact that many people have lost their homes to foreclosure is certainly a tragedy… but at the same time those people have to live somewhere and most of them have turned to rental properties because they can’t afford or are unable to secure a new mortgage to purchase a home.

This massive influx into the rental market, coupled with falling house prices due to the recession may make now a perfect time to invest in rental property. Just remember that you may be in it for the long haul which means years of answering phone calls at two o’clock in the morning because somebody’s toilet is plugged up or the furnace has stopped working. If this sounds like your cup of tea than rental investing may be just the thing for you.

Written By Jason Markum

An ancient philosopher once said “May you live in interesting times”, and we certainly live in interesting times these days! The recession that began towards the end of 2008 and has stretched into 2010 with little signs of lessening anytime soon has made us all stop and think about our investments in many different ways.

When the recession began the first thing that crashed was the stock market. Many people suggested that this recession was fueled by the financial sector meltdown. They were talking mainly about regular banks and also investment banks as well. For whatever the reason, the stock market became a very dangerous place to invest in at the beginning of the recession.

While the stock market has come back to a large degree since its lows during the beginning of the recession, it’s still a rather dangerous and precarious place to keep your money. Or is it?

Once people started digging a little deeper they realized that the financial sector was melting down because the housing sector and the real estate sector had become massively overheated… what we commonly refer to as a bubble that had finally popped. It was the default of thousands upon thousands of mortgages, to a large degree, that caused the banks to meltdown in the first place, which then caused the stock market to crash.

It’s very convoluted and even today we are still not entirely sure which came first the chicken or the egg; the housing market meltdown or the banking sector meltdown, but it doesn’t really matter because the question that remains is this: what in the world can we invest in now that the two main investment industries, the stock market and real estate, have imploded?!

Well that’s a very good question and it’s exactly what I wanted to discuss in this article today.

Some of the best times to invest, historically speaking, are when everybody else is panicking and certainly we’ve seen a lot of panic within the last couple of years. Does that mean it’s time to get back into the stock market or the real estate market? Maybe…

The fact of the matter remains that there are some incredible deals out there in both the stock market and the real estate market. I know many investors who have invested heavily in real estate who are now underwater with their mortgages because the properties are no longer paying off the same level of income that they use to.

This is because of several different reasons including their inability to keep tenants who’ve lost their jobs because of the recession and their inability to refinance mortgages at lower rates because the credit markets are still frozen to a large degree.

What all that means is that if you have money available at the moment, there are great bargain basement deals to be had in both the stock market and the real estate market, you just have to be smart, do your homework, and take advantage of a little bit of luck!

Written By Jason Markum

With the stock market the way it is these days, people are looking for different places to invest their money and one of those places may just be real estate. I know I know, we’re coming through, and in fact are still in the middle of, one of the worst recessions in the history of America that was fueled primarily by a huge bubble in real estate investing…

But the fact of the matter remains that prices on many real estate investments are dropping dramatically because of the recession which means that it may be time to start looking to get back into the real estate game.

If you are new to real estate then you have come to the right place because today I want to talk about several different ways of investing in real estate and I wanted to specifically talk about the different types of ownership that you can come to expect.

How you own your real estate is important for a number of reasons including tax purposes, as well as professional liability (what happens if a tenet in your rental house slips and sues you?!). Today I will discuss several ownership entities that you can choose from.

The first type of ownership is simply individual ownership. In this case, all the profits and liabilities flow directly to you as an individual but you are also exposed to the greatest risk.

The next type of ownership is corporate ownership which allows you to limit your liability and also gives you the opportunity to transfer the ownership interest without triggering local real estate transfer taxes in some cases. There are several types of corporations you can form including a C. corporation and an S. corporation. Because an S. corporation allows profits to flow through to you as an individual, many investors prefer this method but check with your accountant and tax lawyer first just to be sure.

The next type of ownership is partnership ownership. If you have several investors going in together to purchase real estate than a partnership may be the right ownership entity for you. Partnerships are usually not treated as separate taxable entities but instead allow everything to flow through to the individual including profit and losses.

Finally, another type of ownership is trust ownership. Many states allow the creation of trusts that operates solely to title real estate. In this case the trust may not be treated as a taxable entity but as a pass through entity sort of like a partnership. This kind of entity may not be for the average real estate investor as it can be a little more complicated in certain circumstances.

However you choose to own real estate whether as an individual or with your own Corporation or through a partnership or a trust, make sure that the underlying real estate investment is sound and the potential for profit is large enough to make it a good investment.

Written by Jason Markum

I haven’t had what you would call the best track record when it comes to picking individual stocks to invest in on the stock market. I don’t want to sugarcoat it, but I’m terrible at it and that’s all there is to say! But at the same time I can’t just throw in the towel and not invest in anything because I’ve got my retirement to think of. So what other options do I have?

One option that many people turn to is the investment club. These things are usually groups of people that have banded together and pooled their money in order to make investment decisions as a group in the hope that they will do better than if they had invested individually.

I’ve seen some interesting figures in recent years that show that most investment clubs double their money within five years which makes them better off than most major mutual funds. I don’t know how much I trust that statistic, but even if it’s sort of true then investing in an investment club may be just the thing for you.

So what should you expect from an investment club? Well for one thing you must realize that they are not professional entities, they’re not run by professional investors; they are run by people just like you. The group itself will determine what to invest in and vote on it.

But what can you expect from the club itself. Each club should be run like a business in that they have regular meetings with agendas and officers. Usually individual members will be assigned different companies to research and every investment club will have their own process for research that they will explain to you. You will probably be expected to write a report about your specific research and present it to the club so that they can determine whether or not to invest in that specific company.

Once the club has discussed your research (and the research of others) in great depth, you can expect them to vote on whether or not to invest in the company and you can also expect no action to be taken unless a vote of the majority rule has been reached.

Many investment clubs are closed to new members until somebody else leaves the club. A good size for an investment club is between 10 to 20 people because much more than that and it becomes difficult from an administrative point of view because somebody in the club has got to keep records and create reports that show the clubs investments and how well they are doing at any given time.

The more people that are in the club, the more difficult it becomes to create the paperwork needed… so it all comes down to the logistics of the thing which means that clubs should be prepared to stay small.

Of course if you’re not happy with your current investment club, you can always start your own club and this can be done quite easily with just a few members and a few dollars each to invest.

However your club is run, the important thing is to simply join to begin with. Pooled money and pooled research tends to bring about higher returns and really that’s all we’re interested in, am I right?

Written By Jason Markum

Investing in the stock market is tricky to say the least and it’s getting trickier as time goes by. Heck, most major investment banking houses hire entire divisions full of mathematicians and theoretical physicists… theoretical physicists! How can I expect to handle my own finances and invest in the stock market with any degree of certainty when I’m going up against theoretical physicists and mathematicians?

One answer to this problem is to simply hire a money manager and if you have considerable assets, at least $250,000-$500,000 or more, then this may make sense for you. But most people don’t know what to expect when it comes to hiring a money manager and that is exactly what I’m going to talk about in this article today.

First of all, what exactly should you expect to have to pay a money manager? Usually they will charge you an annual fee that won’t be more than 1.5% of the value of your stock investments under their management. Most managers and financial advisers will also charge you a minimum fee of about $1,000 per year and that makes sense because there are simple administrative fees that will need to be covered such as printing reports and managing paperwork and paying secretaries to answer your phone calls to them etc.

The good news is that fees will usually be on a sliding scale that decreases as your investments increase. So the more money you invest the cheaper it becomes to pay your financial adviser.

What sort of services should you expect from your financial adviser? Well they will all differ but you can expect these basic services from most money managers. You should at least receive quarterly reports that explain how well your investments are doing. You should also expect to speak to your financial adviser at least once a year, and preferably once per quarter.

A financial adviser is not somebody that you call up and talk to often because many times these guys have 50 to 100 different clients and they just simply don’t have the time to speak to each of them on a daily or even weekly basis. Once or twice a year is normal and in fact that’s what you’ll need in order to discuss the new year and any changes that need to be made to your investment strategy or financial situation.

Also, when you first set up your account you can expect to meet with your adviser to set up a basic financial plan that is closely tailored to your needs. Most of advisers won’t create custom plans for each client because they have too many clients (unless you give them significant amounts of money like several million dollars), instead their firm will have created several financial plans that relate to several different broad categories of people and hopefully you’ll fall into one of those broad categories and they will simply use one of those template financial plans for you under most circumstances. You can expect to have this all explained to you during your initial meeting when you’re setting up your account.

Hopefully this article has helped shed some light on the mystery that is financial advisers and money managers. If your investment portfolio is large enough, then it often makes good sense to find yourself a financial adviser as soon as possible.

Written By Jason Markum

Investing in the stock market is hard; and it’s as simple as that! Any edge you can get will often translate directly into profit somewhere down the line. Because of this, you should always be on the lookout for new investment opportunities.

One way to stay current on things and get involved in learning the most up to date strategies for investing in the stock market is to attend an investment seminar. You can expect to be exposed to a rather wide range of investment products but you also get a chance to ask questions from some of the nation’s most respected experts. Of course, be sure to pick reputable investment conferences!

But if you’ve found yourself a good conference and you want to take advantage of it to the fullest, what should you do? That’s exactly what I’m going to talk about in this article today.

First, get as much information about the conference as you can before the conference starts. This will allow you to research the different speakers who are attending the conference so that you are able to know before hand which speakers you want to focus on and who you would like to ask questions of.

Next research the speakers that you’re interested in. Many of them publish newsletters and some of them may have even written a book. Why not check out the book from the library and read it before hand? This will give you a good sense of the individuals area of expertise and will also help you to come up with pertinent questions that you can ask them.

Next after you have determined who will be speaking and researched them a little bit, be sure to schedule out your day so that you know exactly who is speaking at what time. Investment conferences like all conferences tend to get hectic and a little crazy at times and if you lose track of time or don’t have a clear schedule in mind before hand, you can easily miss out and not hear a speaker that you wanted to hear.

While you’re at the conference, be sure to collect as much information as you can and take careful notes from each speaker. It may have been many years since you’ve been in school and had to take notes but good note taking will pay off in spades in the weeks that follow the conference because you will always forget what you learned unless you have written it down.

Finally, attend workshops from speakers that you’ve never heard of before. Sure, we all want to listen to the big-name speakers and the famous speakers but many times the people you’ve never heard of are quite talented in their own right. If you think about it, they wouldn’t be at the convention alongside the big-name speakers if they didn’t have quite a bit of talent.

Attending an investment conference or seminar can be a lot of fun and can be quite educational at the same time. Hopefully these tips will give you an inside edge so that you get the most out of your conference.

Written By Jason Markum

Investing can be incredibly dangerous if you get right down and think about it. If you make just a few bad choices why, you can wipe out an entire lifetimes worth of careful savings and planning and endanger your entire retirement… heck you can even get yourself thrown out on the street.

Of course, this is only an extreme possibility, but it is a possibility nonetheless; which makes investing in the stock market an apprehensive undertaking for many individual investors, but it doesn’t have to be if you just follow these few simple steps to help you avoid some of the most common stock market investing mistakes.

The first mistake that most people make is to fail to diversify. If you just purchased a few stocks and spent all of your savings on those few stocks than the chances increase exponentially that you may lose your money. All it takes is one or two of those stocks to decrease in value and you can quickly lose tens of thousands of dollars or more.

If on the other hand, you had simply diversified into many different stocks then the fact that one or two stocks decreased would not be a life-threatening or retirement threatening situation. Diversifying allows you to watch dispassionately and notice the stocks that aren’t performing well, at which time you simply sell them and reinvest them into others that are performing well.

Not only is it a safety net in the fact that I just mentioned above, it also has mathematical properties that are beneficial as well. All stocks have an inherent market risk which means that if something happens to the market as a whole it will correlate and effect an individual stock as well. By purchasing many different stocks you spread that market risk out and in effect decrease the market risk, sometimes down to zero depending on how many different stocks you own and how correlated each of them are to the broad market.

Another mistake that many people make is poor record-keeping. How can you know which of your stocks are performing well and which of your stocks are tanking if you don’t keep good records? These days stock brokerage firms do a pretty good job of sending you reports, the problem is they don’t send those reports until after the month is over at the earliest, and sometimes they only send them out quarterly which is not soon enough for you to determine a poorly performing stock and sell it.

The last mistake I’ll discuss is what I call the guru syndrome. Many individual investors look for gurus; people they think of as experts in the field of stock market investing and then they tend to follow the advice of those gurus. This often ends up poorly because those gurus often have their own agenda that has little to do with offering you good advice. Stocks should be purchased based on sound financial analysis not on a hot tip from somebody you think of as an expert.

So there you have several mistakes that individual investors make that you can now be on the lookout for so that they don’t destroy your stock portfolio.

Written By Jason Markum

I don’t know what sort of an investor you are, I can only describe my own investing attitudes and techniques. But as for me, one thing that I’m really good at is making BAD investment decisions! Oh sure, I do all my homework and research, I do massive financial analysis of every company I want to invest in… and then I pull the trigger and buy the stock! And within the next three months the stock usually drops out of the sky!

It’s a gift I know, and I’m sure you are jealous!

But one upside to my bad stock picking is that I have developed several rules to use in order to determine whether or not you have made a bad investment bet. You can use these rules or tips to quickly identify a bad stock so that you can sell it before you lose too much money. And that’s what I’m going to share with you in this article today.

So let’s talk about some of the more common mistakes that you can make as an investor and how to identify them right away.

The first one is chasing yield. With bank certificate of deposits paying out so little interest these days, it’s tempting to go looking for other investments that pay out higher yield. The problem is; in the world of investing - payout is inversely related to risk, which means things that pay out more are by definition riskier and if you go chasing those higher-paying investments, you are therefore adding more risk to your portfolio then you may be aware of.

The second mistake is in failing to diversify your portfolio. I can pick really bad stocks, but as long as I’ve picked enough stocks overall then the chances are fairly good that the winners will outweigh the losers and as soon as I can identify a particular stock as a dud, I can quickly sell it and replace it with something else that has a better chance of increasing in value over time.

The third mistake is in not using dollar cost averaging. A great great great strategy is to simply set aside X dollars per month that gets automatically deposited into an account that purchases shares in an S&P 500 index fund of some sort. The trick is to make your payments on the same day each month. Some months the stock market will be up while other months the stock market will be down and by purchasing your shares on the same day each month you get to take advantage of dollar cost averaging which means that whenever the stock market is down you get to buy more shares so that when it goes back up your cost of those shares averages out to a lower number.

The fourth mistake is letting the tax tail wag the dog. How many times have I gone after investments simply because they made good sense from a tax point of view only to get burned in the end through poor performance. Investing intelligently with an eye towards tax reduction is smart, just don’t let it become the main factor in making an investment decision.

So there you have four common investing mistakes that you can keep an eye out for and quickly fix if they crop up in your portfolio. Invest on!

Written By Jason Markum

I remember the first time I invested in the stock market, I was fairly young around 19 years old. I ended up buying warrants when I thought I was buying stock! To say that I didn’t have a clue what I was doing would be a massive understatement!

Luckily since then I have learned a few things, some by trial and error, some by studying this stuff in college, and some just by tenacious hard work. Today I want to share with you three or four quick tips to help you down the path to better stock market investing.

The first tip is to make sure you have the stomach for the stock market. It’s a fact of life that the stock market swings up and drops down and then swings back up again and then drops back down again. This see-saw type action is perfectly normal and happens every single day. If you’re the sort of person that has to watch your stock portfolio constantly, then you’ll see it move up and drop back down all the time.

If watching your portfolio drop in value is something that is going to keep you up at night with worry, then you may be better off simply buying safe and secure investments like government bonds or certificates of deposit from an FDIC insured bank.

Having the right temperament is very important when it comes to investing because sometimes the best time to buy is when the stock market is down and if you’re too busy worrying then you may miss out on some of the very best deals that are to be had.

My next tip is that owning stock is much like raising children. By that I mean that you should never have more than you can handle! It’s popular to suggest that people should diversify into many different stocks and many different companies and mathematically that may be correct to some degree. But the fact of the matter remains that the more companies you invest in, the more time you will need to spend researching and running financial analysis for each stock.

When people own more stocks than they can handle, they tend to not put in the necessary time needed to properly analyze the stock. Let’s face it, research is the first thing to go and if you aren’t properly researching your investments then you can quite easily make poor decisions that result in losing substantial amounts of money rather quickly.

My final tip is to never try to predict the future. I have friends that pour over data nonstop in an attempt to predict what the Federal Reserve is going to do regarding interest rates. Are they going to raise interest rates? Are they going to lower interest rates? Guessing correctly before hand can make you a lot of money… of course, guessing wrongly can easily lose you a ton of money too; and if experience shows us anything it’s that most people guessed wrong!

So there you have three simple tips to help you become a stronger and more successful stock market investor. Use them wisely!

Written By Jason Markum

Investing in the stock market can intimidate a lot of different people but it doesn’t have to if you know a few sound fundamental basics. When it comes right down to it, all you really need are just a few simple tips that will give you an edge over everybody else and that is exactly what I’m going to give you in this article today.

First I should mention that the title of this article is “how to invest like a pro” but the fact of the matter is, you don’t always WANT to invest like a professional and here’s why…

Many professionals invest with a sort of heard mentality. They figure that if everybody else is doing something it must be good, and sometimes that is correct because when it comes to the stock market; if everybody is buying a stock it will obviously increase in value. In fact one sort of professional investing is what you might call “trend spotting”.

The problem with this sort of thing should be obvious. Yes if everybody buys a stock it will go up but what happens if everybody stops buying? What happens if everybody starts selling? You guessed it, the bottom can quickly drop out of the market which means it doesn’t always pay to follow the herd when it comes to investing in the stock market and therefore investing like a pro may not be the best strategy!

In fact it’s never been better or easier to invest as an amateur or an individual. The prices of computers have dropped so low and at the same time the processor speeds of those computers has shot up so high, and high-speed Internet connections to the home have become so common that it really makes sense in this day and age to invest from your own home on your own computer in a way that the ordinary individual investor couldn’t have done even five years ago.

Even an ordinary stockbroker account at your average online stockbroker such as E*TRADE or Charles Schwab will give you an amazing array of tools to use as well as massively in-depth research that’s available with just a few clicks of your mouse. So I say now is the time to be an individual investor, and in fact… that’s my first tip; invest like an individual!

My next tip is sort of related to the first tip about herd mentality. Stay away from hot stocks and stay away from hot industries or sexy industries that you may not quite understand. Everybody wants to invest in technology but if you don’t really understand the underlying engineering that goes into that technology at least at a basic level, investing in those companies becomes nothing more than a blind guess. Investing shouldn’t be based on pure speculation and when you invest in those hot companies, often times that’s exactly what you’re doing, just speculating.

My last tip is to only invest in companies that you can explain to your 10-year-old child or your idiot best friend ;-) this ties in with the first two tips in that if it’s too complicated to understand you really shouldn’t invest in it.

So there you have several tips to help you become better than a professional investor in no time at all.

Written By Jason Markum

If investing in the stock market seems like something that is beyond your grasp then I’ve got just the advice for you! The fact of the matter is, investing doesn’t have to be as difficult as you may think and today I want to discuss my ten golden rules of investing.

The first rule is to not be intimidated by professional investors. Many people think that it’s impossible to win when you’re investing against professionals who do it every single day but the fact of the matter remains that individual investors have a better chance than ever because the pros tend to act with a herd mentality that can get them into trouble.

My second rule is to invest in what you know. Look around you at the things that you experience every day in your daily life. What products do you use, what services do you use, and what companies do you run up against on a daily basis? Invest in things that you’re familiar with and you’ll have better luck.

Third, don’t invest in anything you can’t explain to your 12-year-old child.

Fourth make sure you have the right temperament for investing. Stocks go up and stocks go down and if you’re worried about the swings in price, you may sell when the stock is down and miss out on the upside.

Fifth, stay away from hot trends in hot new industries. It’s always tempting to jump on the bandwagon and chase the newest coolest thing but this may not be the best bet for the long run. And you may not be on the inside track to know when the fad has ended!

Six, don’t buy more stocks than you can handle. I know that it’s popular to diversify and in order to diversify properly you have to own many different stocks in many different companies but if you spread yourself too thinly then you may not be able to do the proper analysis on each stock that is necessary.

Seventh, don’t try to predict the future, especially of macroeconomic events like interest rates and government policies. Nobody knows what can happen in the future and to try and time the market is just not going to work in most cases over the long run.

Eighth, don’t worry over the weekend. Stock markets are closed over the weekend which leaves you a lot of free time to think about the choices you’ve made during the last week and begin to second-guess yourself. When Monday rolls around you’ll often have talked yourself out of that stock you just bought last week.

Ninth don’t ever invest in a company unless you understand all of the figures from its balance sheet and income statement. Analyzing a company’s financials takes more time but is absolutely necessary in order to get the whole picture of how sound a company really is.

Finally don’t expect too much too soon. Investing in the stock market should be a long-term thing for you. If you focus on daily or weekly gains you may be disappointed which may cause you to sell, which may cause you to miss out on longer-term gains.

So there you have my top 10 Golden rules for investing!

-Article Written By Jason Markum