One of the trendier investments for people in finance and business these days is gold, which can be bought, sold and traded through a number of different avenues. Generally, the prices of gold fluctuate along with the economies of different regions, which is one reason that this remains an active and engaging market for investment. People see gold as a worthwhile investment, because it is quite conceivable to receive favorable returns upon sale. However, it can be a bit tricky to decide when and where to purchase your gold, as there are a number of different factors to keep in mind, from price, to storage, to convenience. Fortunately, you do have a number of options – for example, consider the following benefits of bullionvault.com, which has become one of the most popular online gold buying markets.

• Large Market – Bullion Vault has, literally, the largest online gold market in the world, featuring roughly $1.6 billion worth of gold. Not only does this guarantee that gold stock will be available, but it also implies reliability in the services offered by this company.
• Low Charges – Any time you place a large investment on gold, there is a “middle man” which will take a certain percentage of the investment. At Bullion Vault, however, this percentage is very low – a maximum of .8%, and 0% for purchases exceeding $30,000.
• Flexible Buying – Due in part to the massive stock managed by Bullion Vault, at this website you are free to buy any amount of gold that you choose at a given time. The site boasts past purchases ranging from $100 to $8,000,000.
• Secure Storage – With this site, you have access to three high security vaults – one in New York, one in Switzerland, and one in London – all of of which, together, manage all of the gold dealt with by this site. You can select the vault you are most comfortable with and easily have any gold you have purchased stored there.
• Flexible Hours – Unlike trading in person or in the stock market, at Bullion Vault you can input transactions literally 24 hours a day, each and every day. This can save you from issues that arise from forgetting to withdraw or spend money on potential investments, and allows you more flexibility with your gold purchasing endeavors.
• Live Prices – You will also have access to up-to-date gold pricing in accordance with national markets. This means that if you are an investor or someone who works in finance, you can still trade on this site based on the knowledge you have from the overall financial climate and national gold markets, which can certainly be convenient.

I have a new little passion. I invest small amounts in crowdfunding sites. Nothing major and no earth-shattering results so far. But it seems promising. I’ll give a summary of what I have found out so far.

What is Crodwfunding

It’s a way for the “crowd” to fund various projects where each contributes small amounts. As usual you can read more detailed definition on Wikipedia.

A large number of the current crowdfunding platforms that exist support various artistic projects – like new book or movie – and the backers get rewards in return. For example tickets for the movie, signed copies of the book etc. While this is good thing, it’s not really investing.

There are few types of crowdfunding sites that will be interesting for you as an investor:

• Equity based – where you get equity, usually in a legal entity formed for all the backers of the given project or company
• Profit based – where you “bet” on the success of a given project, usually by buying in bulk at discounted price, and make fixed profit when the product sells.

I could add “impact based” for investments you make solely for the purpose to make the world a better place. But this type works best when combined with the other two approaches.

The Crowdfunding Sites I Use

Before I share my experience here is a long list with lots of crowdfunding sites. Feel free to have a look at it and explore it. I’ll talk only about the ones I used:

Appsfunder

URL: http://www.appsfunder.com/
This site lets you invest in the development of mobile apps at early stage. The possible returns are really high, sometimes up to 3-5 times your investment. The guy behind the site, Pascal, has great reputation. I exchanged few mails with him and I think he is honest and good guy.

Unfortunately the site does not seem to work very well. There are only few projects and they usually don’t get funded. When the project is not funded the deal doesn’t happen and you don’t make profit. Worse, their automated system doesn’t work well and the Paypal preapproved payment happens in every case so you’ll have to contact them for refund. They refunded me so I have no doubts in their honesty but it just doesn’t work well.

Appbackr

URL: http://www.appbackr.com/

Appbackr works in very similar fashion. You buy in bulk copies of Android or Iphone mobile apps. When your copies sell (you don’t have to sell them yourself, the developer takes care for that), you make profit. The profit is fixed to 27% for apps in development and 54% for apps in concept stage. I already have one package bought and sold in about 3 months, and made 27% profit. This isn’t bad at all, that makes 9% non-compounded ROI per month.

But it’s not all roses. My other apps currently backed have about an year before they return the profit, if that happens at all. While 27% – 54% is great return even for an year you should have in mind that there is considerable risk that your copies will never sell, and you can lose your investment.

In general these sites bring more security to the app developers. Regardless the risks I’d love to see more similar sites that let you invest in other kinds of software, info-products or even tangible goods.

Symbid

URL: http://symbid.com/
I love this site! I made 3 small investments in it and looking further to make more, regardess that I don’t know when/if I will see profits. It’s a typical equity based crowdfunding site that lets you invest in innovative companies and projects and own shares in them. And this time there are all kind of projects – not just apps, or not even just software. For example the project I invested most in is WakaWaka – a solar lamp for people who live in places where electricity is luxury. I believe both in the commercial success and the social impact of this project.

Symbid is a dutch site but it allows investors from all over the world, and you can buy shares with credit card. While many project descriptions are in Dutch, there are enough English ones to choose from.

Kiva

URL: http://www.kiva.org/

This is not really investing but I decided to include it. You won’t make profits with Kiva. In fact you may want to donate few bucks to help its operations. It lets you lend money to small businesses in poor area of the world. Not only it lets you help the economy in these countries but your loans are returned, and you can lend them again, or even withdraw them if you don’t want to lend anymore. I really like this concept, because lending works better than donating. Lending helps people without turning them into lazy bastards. I’m trying to make a small loan every month. Soon I should be able to re-lend only based on the loans paid back and without getting anything else out of pocket.

Other Interesting Ones

I think the following sites also deserve attention:

http://www.crowdcube.com/ – equity based site, all kind of interestng companies and projects. Unfortunately it’s only for UK investors.

http://www.kickstarter.com/ – maybe the most popular reward-based crowdfunding site. I think it’s only for US projects.

http://www.inventure.org/ – if you are looking to make impact, you can invest in various social responsible projects. You can’t make profits, but returns can be reinvested in other projects.

That’s it so far. Any others that you know and I don’t?

In an age when market investments and other abstract sources of wealth and income predominantly exist, material assets have taken a backseat in many peoples’ minds. But historically there has perhaps been no greater an investment than real world valuables and goods. Unfortunately in modern times, the ability to hold and maintain such a form of wealth has become increasingly difficult to do due to lowered emphasis on it as a financial strategy and the lack of know-how on the part of ordinary folks when it comes to keeping such assets from remaining valuable. With that said, it’s far from impossible. Just consider the following four ways ordinary folks can successfully store their bulky material assets:

Vault Deposit: The traditional way to store cold-hard valuables such as jewelry and gold, the decreasing prevalence of these forms of assets has forced banks with vaults to look for other ways to use up their space. Objects such as antique furniture and valuable paintings are increasingly being welcomed into these insured spaces in exchange for the fee of storage.

Self-Storage: For valuable items too big for a bank vault, self-storage is the next best option. This is also a great choice for those who desire around-the-clock access to their assets. While selecting big city locations such as  New York storage facilities is ideal for security purposes, most every storage center is tightly monitored and climate controlled.

Put to Some Use: There’s no problem with simply putting that century-old Tiffany lamp to good use in your home where you can keep an eye on it. If you have a strong alarm system and your item is bulky, such a arrangement is as secure as any. The obvious risk is of course damage caused by rambunctious kids, flood, or fire.

Loaned for Display: If you own precious antiques or some other form of culturally significant items, a great option would be to loan these items for museum display or art gallery purposes. Insurance agreements for such situations are typically iron-clad, and you can always count on your valuables being there at the end. In addition, the item’s existence as a former museum piece adds value.

Material investments are an unlikely choice in the age of stock options, but they remain one of the most assured of ways to secure wealth via ownership. If you have material assets and have no idea what to do with them, consider the aforementioned ways to hold and maintain your goods. At a time when more paper-based forms of wealth seem to not be as safe as they once were, valuable materials are an alternative option worth looking into.

We’ve previously discussed examples of government resources that can help you fix your personal finances. But when it comes to investment decisions, there’s no shortage of further information and advice courtesy of the American taxpayer. Various government agencies hold enormous amounts of useful information aspiring investors can use to make their decisions as smartly as possible. The following are six investor resources provided by the federal government that are sure to help you head in the right direction:

Taking the Mystery Out of Retirement Planning

Unlike many other life challenges, figuring out the complexities of retirement does not get easier with age. Should you opt for a traditional 401(k) or open a Roth IRA instead? Plenty of online resources exist that promise to provide you with the tools you need to sort out retirement woes safely and securely, but why go any farther than the objective
breakdown provided by your tax-funded federal government? The Department of Labor is sure to have all the information you need to get started.

FTC Investment Schemes Breakdown

Whether it’s invention promotion firms, day trading techniques, and traditional investment risks, the Federal Trade Commission arms American citizens with a whole host of tips and guidelines as to how
to protect themselves from the possible threats attached to dubious investment opportunities. Before embarking on such a scheme, put the FTC to good use and see what you’re getting yourself into.

GinnieMae

There’s a lot going through the minds of potential home owners these days. While a home remains one of the smartest investments out there, making sure you’re getting yourself into a secure situation
has become much more complicated as foreclosures and tightened lending has decimated the housing market. Before settling on a particular mortgage, or even doing your research on which neighborhoods to look into, consult the Government National Mortgage Association’s website first.

The New Consumer Financial Protection Bureau

The information potential investors can mine from the newly created CFPB is admittedly low at the present moment. But give it a few years to pack on consumer-instigated investigations and get to the bottom of allegations regarding mortgage repayment plans, credit card scams, and private student loans, and you’ll be sure to get the information you need. In the meantime, contribute by submitting any and all complaints you have regarding various financial institutions.

Federal Reserve Consumer Help Hotline

Any issues you have with a particular bank or financial institution ought to be brought to the attention of the Federal Reserve. Any common negative occurrence regarding these institutions will be posted in the “Find an Answer” section of the Consumer Help page of the Federal Reserve website. When in doubt regarding the particular policies of a bank or other lending organization, see what the Fed has to say about the situation.

TreasuryDirect.gov

The forgotten T-bond: how little faith the American people have in the wealth of their future! While I won’t try and talk you into such a seemingly risky investment decision, apart from the fact that the
Chinese certainly see no risk in U.S. Treasury bonds, the Treasury Department’s website does a good job providing investors with all the facts and figures regarding the buying of bonds, notes, bills, and any other direct investment in the future of the federal government.

With American approval of the government at record lows, it’s somewhat reassuring to know that the federal government still has a reasonable about of informational authority regarding where Americans
invest their money. The federal government exists solely to serve the interests of the citizenry of the United States of America. Take advantage of these services, because as a tax payer, you’re paying for them whether you use them or not.

The most dreadful mistakes happen even to the best of the best. Regardless of research and projections, Investments are still made; when ventures turn into disasters, what’s left is a lesson to be learned.

Here are ten lessons that you can learn from five of the decade’s most popular Investment Disasters:

Optiva, a nano-tech company that developed a process to laminate flat-screen TV sets, had to shut down and sell its assets after it failed to continue to raise funding. Though it initially raised and spent millions of dollars in venture capital, the problem was that it took too long to discharge its product. It shifted focus while technology changed. By the time it came to market, it was already obsolete.

1. Maintain focus by having goals. Your objectives are not just the destination you’re trying to reach, it also makes sure that you don’t get side-tracked. Goals are there to guide your choices in as you plan, start, and manage your business.

2. Strike while the iron is hot. In many types of business, stopping for a while has an immediate effect. Just like when you stop hammering the hot steel, you lose the chance to shape it into what you need. Make a choice to strike while the conditions are favorable, so you can see instant results. Be always at the top of your game.

Webvan, a grocery-delivery business that was serving nine metropolitan areas, was once valued at more than a billion dollars with a plan to expend to 26 cites. Despite millions in sales, the company went bankrupt when its expenses far exceeded its sales growth. There were a lot of major purchases that expanded the company too fast.

3. Do not focus too much on sales level and company size rather than profit. The entrepreneur should learn to become a good businessman instead of showing interest only in creating and building.

4. Keep a low overhead while starting up. Even good businesses struggle when they grow too fast. Learn to step back and rethink or rewrite your plan. This will help you to reorganize your business to position it for growth at a rate that you can handle.

Amp’d Mobile; the mobile content company declared bankruptcy after it hurriedly implemented its strategy that was supposed to boost its subscribers. The mistake was to change its credit check policy, after the company’s founder pushed for the company’s growth. While other carriers checked customers’ credit record to make sure they had enough money to pay their bills within 30 days, Amp’d Mobile decided to loosen up the requirement to 90 days for its own network. It was definitely a big mistake to market to people who are already a credit risk, as they found out 90 days later, when most of them were struggling to make their payments.

5. Evaluate your risks. Many people can’t identify the risks they face and can’t examine the danger the risks pose for their business survival. As a result, they accept risks which could be fatal while ignoring those which are quite manageable and which would probably give beneficial results.

6. Know the right time to implement changes. You have to know when the best time to make changes. Always ask yourself if it is time for growth, and can your company keep up. Make sure the business and its market are resilient enough to weather the changes.

Kozmo.com was an online company that promised free one-hour delivery of various small items. Business analysts pointed out that operation costs were expensive unless they charge delivery fees. Concerned employees suggested having a minimum purchase for the free delivery. But the company refused to consider, saying in part that, in their target markets, the savings from not needing to rent retail space would exceed the costs of delivery. So it continued to follow its business model, and went out of business soon after.

7. Be resilient. Some people resist change because they don’t realize quickly enough the need for it. In business management, part of being competitive is to have the capacity to remain flexible when changes are needed. As your business grows, it will need you to make changes in order to keep up with growth and the insatiable needs of the market. If you are good at accepting change, you will learn how to react and channel it in a good way for your business.

CyberRebate.com, the online retailer which sold an assortment of goods at heavily marked-up prices, promised customers they could get a full refund of the purchase price for as long as they submit rebate forms by a deadline, and checks came 10 to 14 weeks later. CyberRebate relied on the idea that a good percentage of buyers would forget to fill out the rebate form, or fail to do so in time, leaving the company to keep the money. This did not happen. With the outrageous inflated prices that they sold the items, the customers had gone out of their way to get the rebates. This sunk CyberRebate into serious debt.

8. Do enough research on the viability of a business idea. Proven research can help you make better decisions. Don’t just do things right away without enough knowledge on the impact of your actions. Recognize the value of quality research and know that decisions made based on sound evidence are more reliable than those based on suspect intuition every time.

9. Do not underestimate the buying public. Consumers are smart; they know what works for them. They know when to give in and when to take off their gloves, so don’t expect that they’ll act the way you think they’re suppose to.

FastForward’s software and design took its downfall due to faltering profits despite investors funding millions of dollars to the company. The mistake included realizing too late that it would do better if it works in conjunction with advertising agencies, rather than trying to sell directly to customers. This ended with bankruptcy and a sell off to raise funds to pay debts.

10. Never bring in unnecessary partners. Do not rely on others to sell your products and services if you can do it better, especially if they cannot justify their presence by making an actual contribution to the growth of the business. Don’t get easily persuaded into avoiding doing something which should be considered your responsibility.

Ally is part of the team that manages Home Loan Finder, a free home equity loan and home loan interest rates comparison service in Australia. Before joining HLF, she was a Media Planner with McCann Worldgroup Philippines, Inc., with award-winning executions, including the Levi’s 501 “Live Unbuttoned” global campaign.

I’m sure you are careful when it comes to investing money. You research the opportunities, watch out for fraud, calculate the risk, estimate the ROI.

Why are you not so careful when investing your time?

People can spend hours watching meaningless TV shows, participating in meaningless conversations or reading meaningless stuff. Everyone knows time is money but almost no one really values time the same way as money.

Knowing the Value of Time

There are many ways to evaluate your time. You can use your hourly rate (simplest option). If you don’t get paid by the hour you may try to evaluate the opportunities your work creates in the future and their financial value. Entrepreneurs do this all the time, and although it’s not always accurate, it’s a way to know the value of your time. For example I often see entrepreneurs saying they are looking to create projects that in the long run will return $5,000 for each hour of their time.

$5,000 for one hour.

This would make a million per month if you were paid by the hour.

No matter whether you make $20 or $5,000 per hour, you should know the value of your time. And next time when you decide to research for a $20 cheaper phone, figure out the time you spend in this research. Don’t be surprised – very often it’s going to take a lot more than one hour.

Managing Your Time

I’m not saying that you should work all the time. Not at all. Taking rest, and sleep, and having fun is important for all of us. I’d say it’s far more important than all the money in the world. You shouldn’t reduce such activities because of greed for money.

But you should definitely watch out the time you spend not for fun, but misleading yourself that you are doing something important. Stuff like research for saving five cents, taking a stupid side project than will bring you $50, writing low quality content for the only sake to win $0.05 from Adsense… These are the things you should avoid.

You should learn prioritization and other time management techniques in order to invest your time in the best way.

Time is even more important than money because you can’t generate it – so why are you so much more focused and careful when investing money and so careless when investing your time?

This is not a title to attract your attention. It’s a confession.

Actually I remember borrowing money just once when I was a student. And it wasn’t because I really needed it: I just wanted to see what is it to borrow money, because everyone else was doing it. So far I was only lending to friends.

Photo by [s e l v i n] at Flickr

I haven’t been a rich kid, neither I had any ideas of money management. I just never think about borrowing as an option. I know if I don’t have the money for something, I just can’t afford it and that’s all.

Now we may finally break this rule when the time to finish our new house come, but I’ll try to avoid it again. I just can’t see it as something natural. I think getting a consumer credit is just a wrong thing to do.

Every time when someone uses a consumer credit, someone is screwed.

It’s either the lender or the borrower. If you don’t pay your loan, it’s the lender who’s screwed. But since most loans are given by banks or other institutions who take very good care to receive their money mack, it’s usually the borrower who’s been screwed.

You may think it’s very cool to buy something and enjoy it even if you don’t have the money. But why don’t you look at the other side of it: an year or more later you are still paying money for something you no longer enjoy that much, something that is outdated or out of fashion. And you are paying more than its real price.

For example if you buy a laptop with a 1 year loan you will probably pay 110% – 115% of its price. But your loss is a lot more than these 10% – 15%. You get screwed twice because six months later you are still paying for this laptop, but its price is down 30%. Doesn’t that make you feel like an idiot?

It’s even worse if you buy a car with 10 years loan or leasing. Nine years after the purchase your car looks like crap, it costs 60% less and is totally not cool, but you are still paying for it. Good boy, keep feeding your lenders.

The big mistake…

… when getting a consumer loan is that you think you are buying something that you deserve to have. Sorry to break your world, but if you don’t have the money for it, that simply means you can’t afford it. Whether you deserve it or not is irrelevant, because money has nothing to do with merits or fairness.

If you can’t afford some item now, you’d better look for other item that you can afford or see how you can make enough money to afford it (if owning that item is really that important for you). Let the morons feel important with their luxury cars, laptops and cell phones bought on leasing and buy only what you can afford.

Trying to use more wealth than you have now costs you more and more in the future.

The Business Loans

They are completely different matter. Getting a loan for business or investment is often a win-win situation, instead of win-lose or lose-win (sometimes even lose-lose) situation that you have with consumer credits. A business loan can help you grow in a way you could never grow without it. It helps both you and your lender make good return on money that could otherwise stay and do nothing.

Somehow most brainwashed people see consumer credits as something normal, but start shivering in their pants when they hear about business loans. Can you see how dumb that is? Using loan to buy cell phone, car, laptop or clothes can in no way be a long term gain – at best case you’ll happily use the stuff you bough and not feel bad for having to pay for it later. But even in this best case the money is completely gone. On the other hand, even the riskiest business or investment loan has some chance to succeed. If it succeed, you’ll probably have your money returned back many times. If it fails, the money will be gone.

So essentially a consumer loan is the same as a business loan used for a failed venture. How could you think the first was in some way better than the second? *grin*

P.S. I don’t entirely deny consumer credits – if you need a medical operation for example, that could be the only choice to stay alive or live normally. But to get a loan for buying the latest iMac? Uh!?

People happily borrow to buy a car, house, new TV or to go on vacation. At the same time most of us feel unsure to borrow money for investing or building a business because it’s so much riskier. At least that’s what we usually think.

But how exactly do you secure your money when buying a car? Sure, the car may improve your lifestyle, but it is not an asset. You don’t make money from it. Instead, it costs you extra money for support and fuel.

Photo by
liewcf at Flickr

Compared to that even the worst investment is less risky. Even if you lose all the money in a risky investment (unlikely to happen), you are still ahead from buying a car – because you don’t have further expenses.

But when investing, you don’t plan to lose money – your idea is to make more. Then why do people so easy borrow money to buy a car, but are afraid to do it for investing?

What’s The Point To Borrow For Investing?

All the books and blogs about investing teach you one thing: get out of debt!

Why the heck am I telling you to get into debt then? Isn’t this against all principles of financial success and personal wealth creating?

Yes and no.

There are bad loans which are putting you in the rat race. These are loans that you take to buy stuff which doesn’t put anything in your pocket. Bad loans are loans which you use to buy liabilities.There are good loans – the loans that you use to buy assets. payday loans

The answer when it’s worth it to get a loan for investing is simple – when the ROI of your investment is higher than the interest you pay on the loan.

It’s really that simple. It is how the business world works – most companies and even small businesses do not start with own money. They borrow – from friends, relatives and banks. Then why is it so strange to get a loan for investing? (Except that it may be illegal sometimes. Some countries have regulations which forbid using borrowed money for some kind of investments)

If you have found an investmend that yields 10% per year, you can get a loan with interest 6% per year and earn 4% from nothing. This is the way to leverage your money and actually win a lot more than 4% profit. See this example:

Sandra is an accountant in a middle sized company. She gets a good salary and owns a small home, but can hardly save more than $200 per month and has $10,000 in savings right now. If Sandra build a good stock and precisous metal portfolio which can yield 10% per year, she has some chances to be a millionaire soon.

With her current savings and salary, it would take her about 31 years to achieve that. Quite a long time.

Let’s think this way. Sandra’s home is worth $100,000 (it’s a small home ater all). She can get a $50,000 mortgage loan for it at 6% p/a for 30 years. The monthly payment goes exactly to $300, so she can afford it. Instead of investing her extra money each month, they will have to go for the mortgage payments.

But she will have $50,000 right now to invest in her balanced low risk portfolio yielding 10% annually. This way even without investing a penny monthly, she will be able to reduce her way to the million with 3 years and have it in 28 years. That’s 10% improvement by taking a loan.

If Sandra’s portfolion could yield 20% per year (dreams, dreams…), the difference becomes even bigger. She would need 18 years to achieve the million without loan and only 14 years with a loan.

Borrowing money can significantly improve your investment strategy it’s a must-do in your overal investing efforts.

Ways To Borrow Money For Investing

Depending on where you live not all of the options may be available, but there is always a way around. You can easy use a loan for something that you would normally pay with own money and then use your money for investing.

• Mortgage loan. If you own a property you are in best position (oh well, you are except at the time of crazy real estate crisis like now). The banks will happily give you loans at a very good rate.
• Other bank loans. Of course the banks and credit institutions will happily give you all kind of other secured or unsecured loans, because that’s their business. Of course you won’t be able to get as good rate as with the mortgage loans, but if you have a good investment opportunities this is the way to go.
• Borrow from friends and relatives. This is the best option (if you have such friends), because they will likely borrow you money they don’t need.
• Advanced payments, leasing etc. It’s usually not recommended to buy stuff on leasing because that puts you in the rat race. But if you anyway planned to buy that stuff why not use the leasing, considering the interest is lower than the ROI your investment brings?
• Borrow from “Angels”. This is a bigger concept that I am going to discuss separately. But in short, if you can find an angel to fund your business ideas, go ahead!

Loans are just one of the instruments to leverage your money. Adding several instruments one by one can lead to the huge impact that you are looking for.

How often the lack of money stops you from doing things you love or dream? My bet is, for most people this will happen for at least 50% of the times when they don’t follow their dreams. There are many ways to solve this problem and raise money for your dreams or just for investing.

Photo by Austin Kleon at Flickr

Saving may sound boring but most secure things do sound that. Saving is a straight, fool proof and efficient method to raise money for investing.

Usually the investors do not feel very attracted to saving, because of the following reasons:

• You can’t raise enough money by saving
• Saving can significantly change your lifestyle
• Saving makes you “little” and does not help you think big
• No one has made riches by saving
• Saving money equals losing money because of the inflation

I think most of these reasons are myths:

Myth 1: You can’t raise enough money by saving

People who say this have missed the math classes in the school. Save only $100 monthly, put them in safe mutual funds (if you can find any though) yielding just 10% yearly and you’ll have $42,000, in 15 years. $42,000 may not sound much, but with more aggressive investing they can turn into half million in another 10 years considering that you keep saving.

25 years may look like a lot to own a half million dollars, but this is achievable with just saving $100 per month and proper investing. If you can save more and/or achieve better ROI, your first million is going to come soone.

Myth 2: You should significantly change your lifestyle

$100 monthly to change your lifestyle? Depending on where you live, $100 could be still something, but not too much. Typically you can save $100 or much more per month without trouble if you try some of the following ideas:

• save electricy, gas and water
• use public transport
• use local and season foods – better for your pocket and for the ecology
• cut out expenses for alchochol, cigarettes, sweets and other not so useful habits
• don’t be in rush to buy the newest TV, car, washing machine or suite. Following these you can save a lot more than $100
• buy bigger quantities of food once in the week and cook at home

None of these is a significant sacrifice of your everyday life. If you don’t have $100 free right now, try some of the ideas and you’ll be able to save at least as much pretty soon.

Myth 3: Saving makes you a little guy and does not help you think big

Saving from everyday expenses if very different than beeing squeezed. You should not save from anything that could bring you better yield, that can improve your life, work or business.

Saving from daily expenses is not making you small-minded. On the contrary, working against your consumator’s habbits will free up your mind and make you happier. Discussing this is out of the topic of this site, but you can only win if you decide to follow less today’s consuming society.

Myth 4: No one has made riches by saving

One of the most popular investing books in the world – The Millionaire Next Door
– proves this to be false. It says that the average millonaire in USA has achieved their wealth by saving more than 20% of their yearly income. Straight and simple. You should read that book if you don’t believe.

Saving money equals losing money because of the inflation

It’s true if you put your money under the mattress. Sometimes it’s true also if you put them in bank, although banks usually can protect you against the inflation, at least partly.

The key is not to save and wait for your money to reach some amount to start investing. Save and invest at the same time. Mutual funds, stocks, bonds, forex, real business and other strategies allow you to add small amounts with the time. Don’t let your money sit down ever for a month.

Saving is a long but fool proof process and can make you rich alone. However we are here to explore methods which will help you improve several times what saving can do. The other ideas should be applied along with saving, not instead of it.

How much do you spend now on investing? 10% of your income? 20%? 70%? Don’t worry if it is not too much. The less you spend now, the more you can improve. You can invest even 1000% of your income in a given period of time.

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iirraa at Flickr

We all have hidden assets

Our wealth is not a constant value and it is not limited to any fixed limits. Your ability to earn, save and obtain money are very flexible even if you work for a fixed salary.

Some of the hidden assets you have are actually pretty obvious:

• Spending Less/Saving
• Working more
• Borrowing
• The value of your home and other property you own

Most of the people don’t even use 10% of them. Since you are reading this, you are likely to use more. But how much? Look just at the four items above. Are you using all of these hidden assets? There is probably a lot to improve yet at this point.

And the opportunities do not end with these. You have assets that you may not think about at all. For example:

• Intellectual properties
• Your skills and knowledge
• Your friends and relatives
• Your business connections
• Your current investments
• Your future ideas

Leverage works not only in forex or stock trading

The concept of the leverage is one of the keys to financial prosperity. You will not go too far if you invest $1,000 per year in banks for 4% yearly ROI. To be exact, you will have $30,969 after 20 years (check yourself with the compounding calculator).

But if you can mutliple both values by 5, you will achieve more than 5×5 times that amount. To be exact again, for 20 years you will have $1,12 millions. Invetsing $5,000 per year and achieving 20% growth is certainly a realistic goal, especially if you leverage your assets.

The problem most people have with aggressive investing is messing logic with emotions. It is hard not to be emotional when you risk big amounts of money. And you will do this quite often if you want to achieve good results. You can’t expect not to be emotional. Your goal should be to follow a strategy regardless what feelings dictate you.

Outgrow Fears

The pessimists see difficulties in each opportunity. The optimists see opportunity in each difficulty. In aggressive investing you will need a moderately optimistic look. Too much optimism will kill your finances, but without some you’ll just miss all the opportunities.

Think about investing in this way. You are investing some money that you don’t need right now. It’s like buying a lottery ticket but with much bigger chance for success. Each successful investment will help you win the jackpot. Each loss will just make you smarter.

Learn From Losses

You should accept there will be losses. Some investors say the key is to reduce losses.

The key is not to reduce losses.

It’s to learn from them. What did go wrong last time when you invest? Were you aware of the potential pitfals? Was it looking too good to be true? Did you give your money to someone else hoping he or she will do the best to manage them? Did you follow the crowd? Did you exit with a loss because of fear not to lose more?

You will quickly notice most of the time losses are due to some of the issues listed above. Aggressive investing is not very risky. It’s your mind that makes it look so.

I am going to talk soon about specific strategies for raising funds. If you don’t want to miss them, stay subscribed.