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Keep your eye on any of the following:

1. Investing more than you can afford
Any chance that you have not done that ever? I do this mistake all the time. I see a good investment opportunity and am ready to arrange funds for it even if I am not in the best financial situation at that moment.

If you can’t evaluate your financial assets and foresee your future expenses and income, you won’t be able to do good financial planning. As a result of this you’ll often miss investment opportunities or will get opportunities that you can’t really afford. Know your financial situation.

2. Not following a strategy
It’s easy to start jumping from opportunity to opportunity. The reality is always giving us more opportunities that we can handle and it’s very hard to evaluate them all and choose the best.

There are two ways to solve this problem - the first is always to take the right investment decisions. For most of us this is not achievable.

The second way is to have a strategy. This is what I do. I have set specific goals, amounts that should be invested, target ROI and limits. When I see an opportunity I know does it fit my strategy or not. If it doesn’t fit, usually I’ll skip it without regret.

Create a strategy and follow it.

3. Not using other people’s money (OPM)
If your income is not very high, it’s unlikely that you’ll reach huge profits from your investments. Many good investment deals have higher threshold and may never be accessible to you… unless you use other people’s money. Most small investors are afraid to do that and can never grow.

If you think the only way to do this is to create an investment club, you are wrong. The banks, your friends and relatives, leasing, other credit institutions - this all OPM. Most people think it’s wrong to buy things on credit but they are only half right. If you have something to do with your money - something which brings higher ROI than the credit card interest - then don’t hesitate to buy everyday things on credit.

Use OPM for better results.

4. Following the crowd
When the mass media start screaming about a financial crisis it’s already too late. If you read in the newspapers that the home prices or stock market is falling, it’s already too late to act. Many small investors follow the crowd and become a part of all the disappointed people who lose a lot in bear markets.

Avoiding this is actually simple. If everyone is doing the same thing on the market that same thing will get devalued sooner rather than later. So when everyone start buying houses, you beg to differ.

Watch closely what the masses do. And then do the opposite.

5. “Investing” in strangers. Many small investors get disappointed by the results of their conventional investments. That’s good because disappointment is the first step to taking action. But very often when you start looking for alternative opportunities you will be presented with fake offers. They come from strangers and in most cases you will be asked just to wire money somewhere (or worse - to send e-currency) and wait for the profits. In most cases you’ll get involved in a pyramid/ponzi scheme.

Don’t invest in strangers. Always know whom you are giving your money to and have full control over it

6. Bad diversification In every single guide about investing you’ll read “diversification is the key”. But do you really follow the advice? Most small investors have enormous share of their assets invested in real estate. Others heavily put their money on index funds or other mutual funds. How bad the things can go when a recession start? The falling home prices drag the stock exchange and funds with them. So even if you diversify between real estate and funds you are still at huge risk.

Diversify in different classes of assets. If you diversify in real estate, stocks, precious metals, foreign currency, education, brick and mortar or web business, CDs and commodities you will always be protected. (The downside of such diversification is that you’ll rare achieve high returns though)

7. Buying liabilities instead of assets Many people confuse assets with liabilities. Some buy new car thinking it’s an asset, other move to a larger home or buy a vacation house thinking it’s an asset. Really, sometimes buying a car or vacation home is an asset, sometimes it’s a liability - it all depends on the purpose of using. Just because someone else makes money from an asset, doesn’t mean you’ll be making money from the same.

It’s really simple: assets put money in your pocket, liabilities cost you money. Don’t mess both.

8. Procrastination How much money do you keep scattered in debit cards and bank accounts and doing nothing? Many small investors keep unused money waiting to collect bigger amount so they can invest in something big.

What stops you buying highly liquid assets with this money? You can always sell the assets when you have enough for the “big deal”.

Don’t be passive waiting for the “big deal”. Always invest your free money (or you are very likely to spend it for junk)

9. Accepting investment advice and referrals from amateurs. This may sound like “don’t read this blog”, but fortunately I am not giving you investment advice *grin*. Many investors will read blogs and review sites online and blindly follow the advice given. But there is no such thing as generic financial advice - what is appropriate for my financial situation and goals may be absolutely inappropriate for yours. Another problem is that many internet advisers recommend investment opportunities for financial gain - they may receive commission if they refer you as client, so such publishers are not always objective.

Don’t accept advice where and how much to invest. Take the decisions based on your specific monetary goals

10. Missing opportunities We all do this. We miss opportunities because we are afraid not to lose money. But losing money is not such a big problem, if you gain a lesson. Don’t miss good opportunity because of fear.

Train your investment courage not to miss good deals.

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As I wrote at the time on posting it, I did not create the poll just for my pleasure. I wanted to understand what really is troubling you the most on your way to achieving your financial goals. On the second place are 33% of the readers who lose money because of bad investment decisions. We are already working hard on this together, don’t we? It’s a long process and I believe we’re all learning and doing better with the time. And don’t forget that making mistakes and losing money is not that bad.

The Big Problem

A bit surprising, but at the time of writing this post the leading issue is not earning enough - voted from 58% of this blog readers. So it seems like I am putting too much effort into finding investment deals which many can’t afford.

So here we go, this blogs need a little shift.

Let me reveal myself a little bit first, for the first time here. I did not pick the “low income” option in the poll myself, but my income is also never high enough (I just have even worse issues to deal with when it comes to finances). As I am not working on a salary for already more than five years, I have always been researching for ways to add supplemental income streams. Unlike most people though, I don’t get satisfied with researching and am actually trying everything which seems promising. So I’ve got a bit of experience.

Trust me, earning good additional income is not as easy as many online gurus want you to believe. But it’s pretty doable especially if you have patience.

So, What Ideas?

I wanted this blog post to be just a quick note, but see how it turned into a long introduction. Let’s get to work:

I am opening a new category here on the blog called Supplemental Income where I am going to post ideas and experience on bringing additional income.

If this is your main issue, let’s solve it.

Roughly, the ideas will gravity around the following lines:

• Making money doing some work. I don’t like this too much, but if you badly need it, it’s a less risky way to earn. I’ll share a lot of things about freelancing and consulting. Please use this as last resort. Trading your free time for money is not a good idea unless you do it hunting a long term goal
• Growing assets. My favorite. Check this article for more details.
• Making money online. Pretty often that goes along with growing assets, but there are also ways to make money without creating real business. Will be discussed as well.
• Deals that require no investment. That’s the dream of every opportunity seeker. I don’t claim to have great success with such deals, but they are not to be overlooked for sure
• Do it yourself. Some of the things we buy are 3-4 times more expensive than their real cost. Sometimes it’s not hard and is even fun to do them yourself. Such activities may sound like saving, but they are actually income producing.

I hope to help you to increase your income without losing your sleep. Investing is a way to do it, but if you lack funds now, we’d better work more on improving this situation. Bear with me and we’ll hunt some fresh fish together.

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You’ll see some posts of the best personal finance bloggers there, so it’s worth reading. Almost as good as my monthly “link love” selection *grin*.

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If you put some thought into it however it might turn into a tool offering one of the best risk/ROI ratios in the investment world. I have two general strategies which work in almost every real estate market and almost independently on the current market conditions. The strategies are simple and not secret and they are quite involved. This is what makes them so good - no matter how many people know them, very few are those who use them well, so there is plenty place for you if you wish to try.

Buying Land And Homes Around Expanding Cities

In most developed countries like UK people live around the big cities instead in them since years. Same tendency is now seen in East Europe and Asia which opens big opportunity for investing in land around the big cities. There is opportunity in the Western countries as well, but you need to work harder in finding the right places. In the developing countries there is an exact pattern which shows you where and when to invest. Here is how the raise of the land prices happen in most cases:

1. The country economy starts growing fast. People start having more money
2. People move to the big or capital cities and start buying homes. Home prices start increasing quick for 2-3 to 5 years
3. The home prices in the big cities become too high for many citizens, the cities gets crowded. At this stage the people start looking for homes near the cities instead in them and the price of homes and land there increases quickly

So, basically when everyone invest in homes in the big cities because the ROI has been high for several years, it’s time to start looking for property around the cities. In a short period of 2-3 years the prices of the near-big city homes increases more than the home prices in the cities have been raising in the best market time.

This strategy requires careful research and watching the home prices in the big cities of developing countries. You can try to apply it in USA as well but guessing which will be the next expanding city is a tough task.

Buy Land And Change Its Purpose

This strategy is simpler to explain but requires more work on your side. Agricultural land is cheaper than the land for commercial or residential buildings. Often it is much cheaper. And pretty often its purpose can be changed. If the land is around a city or town, has good infrastructure and there is a different (building) purpose around it, most countries laws will allow you to change the land purpose. Most common practice is to buy agricultural land and change its purpose to a land for residential property - this can double or triple the land’s price.

There is a lot of bureaucracy, fees and risk in doing such purpose change. It highly depends on your country and state local laws. But if you are willing to do some work, research and spare no expenses on legal consulting, you can see a return of 100% in an year or less doing this.

Can you share other timeless strategies for real estate investing? Don’t run away from good opportunities only because they require work to implement. If an opportunity requires more work and research this is a sure sign that the lazy investors will be out of the deal making it much better for you.

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The Simple Dollar is intriguing as always and writes How Consumer Culture Undermines Children’s Well Being. Nice stuff.

The Silicon Valley Blogger thinks it’s time to shift to frugal living. What’s your take?

The super cool blogger Punny Money thinks that budgets are overrated. Your drawings rock, mate.

My Dollar Plan gives 10 ways to eat out for less. 11th tip from me is to eat less outside.

Are you a college graduate? Money Smart Life has something to tell you.

A good tip from Money Crashers: when the market is down, invest in boring companies. Microsoft is the most boring one I can think of.

Now that’s a problem many of us have. How to save money while eating at work?. The DINKs have a solution.

Stephanie has a positive look on the recession. Do you have some positives to share?

Generation X Finance suggests that maybe higher food prices are good for us as a society. They are maybe good for your personal health as well (eat less, stay fit).

The Clever Dude has a sweet idea - grow your own mini garden. I can add: buy agricultural land and grow a bigger garden. It pays well if you have free time to take care for it.

Listen to Clint: Going green keeps more green in your pocket. True.

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I wanted to find something with lower minimum and ended up at Pip City. Let me save you from further stories - this “company” is scam. They are completely anonymous and offer 25% fixed monthly ROI with $10,000 minimum. The “managed account” program is for six months.

How I know this is scam:

1. They offer fixed (and pretty high) ROI. This is simply a joke in a managed forex account. No forex trader can guarantee you fixed ROI unless he’s backing the deal with his own funds (unlikely)
2. It’s not really a managed account. If you contact them and ask which broker to open an account with they give you bank wire details!!!
3. They have filled ForexBastards.com with fake reviews how great the service is. What a joke
4. Last year the same bloody scammer offered even more ridiculous “investment” at a HYIP forum with just $1,000 minimum and ROI 25-50% for 18 per month.

In short - stay away from this crap please. Don’t believe several good reviews on the net, everyone can create an account at Forexbastads and write a review.

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But buying ready asset which brings passive income is not always the best option for you. Here are some reasons for that:

• Such assets have high price. Said in another way, it means the assets which can be bought easily rare bring good yields. The easiest thing you can do is to have a bank deposit, but it will bring you just 3%-4% per year.
• There is a high risk. If you find ready for producing income asset at a good price (i.e. bringing higher ROI), it will go together with a high risk. For example a managed forex account can bring you 100% or more per year, but you can also lose 50% or more of your money.
• Everyone can have same assets. Well, this is not entirely true, because some of the assets are available only after careful research. But in general, everyone can invest in stocks, managed trading accounts or hedge funds. This means that the mentality of the masses can easily change the value of the assets. See what happens with the stock market or the mutual funds at times of mass psychosis.

Create Assets Yourself

If only money is the barrier to most ready assets, how can you expect them to perform great? In today’s world the total amount of money is always higher than the real resources which makes the prices of financial assets fluctuate depending on psychology and mass-media factors.

On the other hand, assets which require more than just money have higher core value. This is the case with growing a business. It requires creativity, ideas, hard work, discipline, concept, people, technologies, relationships, properties and intellectual rights. A business unit has a real value, not only perceived one like many financial assets.

If you own a business the global market crashes are much less painful for you than if you owned stock shares. Even when the global recession hits you, your losses are usually not that bad.

Growing a business or creating an intellectual property is not exactly a passive investment

Unfortunately you can’t just put some money somewhere and watch a business grow (Or you can by angel investing but then the business will not be yours). Your business needs your ideas, capital and creativity to get started. Even if you have all the money growing your business needs at the beginning, you’ll still need to work hard your mind in order to create a valuable and successful company.

But growing a business can still be seen as a passive investment in general. If you only invest your time and hard work at the beginning and create a system which can work and grow without you, you will have an asset bringing you a passive income.

Creating an intellectual property is another and simpler way to grow an asset. Let’s say you write a book or a software program. You have to invest a lot of ideas, time and efforts into creating the product. During this time you will not be an investor, you will be a worker. Even if you outsource the writing or the programming, you will still need to work in the beginning at the idea project and later to keep an eye on what’s going on. Once created however such a property can bring a residual passive income for long time. Then it turns into an asset, so the whole process again can be seen as investing - you invest time, money and work at the beginning as opposed to investing just money.

You may decide just to buy an intellectual asset - for example resell rights for a book. But buying resell rights is easy, everyone with money can do it - so the ROI of such a venture is much lower.

It’s really as simple as that - the cheaper and easier to obtain an asset it, the lower profits it returns. Expect the higher ROI from assets which require the most from you - and that “most” is not always money.

Growing your own unique assets is the best long term strategy for financial success. I believe it’s the only way to survive unpredictable market movements so I’ll cover this topic more and more in the future.

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The program is called MAP and is offered by Roger Show at Livestock CTA, LLC.

The trading is done on USA markets with futures on 25.00% Systematic and 75.00% Discretionary methodology.

Minimum account size: $25,000

Average yearly ROI: 95.84%

The average ROI is very very impressive but there is one important thing to consider. Judging by their charts they have just started accepting deposits and the past performance is based on account of $1,000 . This is at least what I can understand. Even this trading has some large drawdowns of 34% so consider this a really risky investment.

Unfortunately the minimum investment is quite large, but because of the great ROI I thought this managed futures account worths sharing and keeping an eye on.

You can find all the contact information for this opportunity and the Livestock CTA site.

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“Then you need at least a half billion”.

No.

Most private investors don’t buy 50% of a billion dollar companies but many of them own such.

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The early bird gets the worm

The key to successful venture investing is to enter it as early as possible. For sure startup investing has made many people millionaires - for example Guy Kawasaki.

The startups are happy to get every dollar and often are ready to sign contracts which give you 50% or more ownership in the startup company. Sometimes you will even be the boss, it all depends on the size of your investment.

How Much Does It Require?

Startup investing is not a low entry business. Unless you do it thru a mutual fund, but then it’s not real startup investing.

There is no exact minimum of course, but since the last years I am looking for such opportunities I know some numbers. Typically a startup company will be looking for 60% - 100% funding. This means your investment will vary depending on the business niche, but typically the lowest possibilities are $10,000 - $20,000. For web businesses you may sometimes go with $5,000 or even less.

Of course, most startups are looking for $100k and more, up to several millions.

Finding and Choosing Startups

In general there are a lot more startups looking for funding than free money to fund them. So it’s not hard to find a startup, the hard part is to find the right one. However here are few ideas where to search:

• Friends and relatives. You probably have enterprising friends or relatives who are looking for some funding. If you trust them and their skills, this is a great option for you.
• Startup networks. Check out for example my pick about GoBigNetwork. At such places you can get in touch with many startups.
• Angel Investor Syndicates. Many Angel investors join such syndicates to fund startups easier. One place to join such syndicates is Angel Capital Association
• Your Funding Company. If you have a lot of cash, create your own funding company just like Guy Kawasaki or Paul Graham and have the startups contact you.

Choosing the right startup is much harder, that’s why many investors consider startup investing one of the riskiest activities (and I agree with them). Many startups will simply fail and thus most or even all of your money will disappear.

When picking a startup, watch out for:

• Their business plan. It must be well done and promising. If needed, ask an expert for help
• The business niche. The best you can do is to invest in a startup in growing business niche. Typically IT, biotechnologies, energetics are always hot. Avoid funding startups in dying businesses
• Location. Unless you invest in web based business, location plays a big role.
• Unique Selling Proposition/Point Of Difference. If you want to make high profits the business you are investing in must have a good USP.
• People’s credentials. What kind of person is behind the startup? Has he or she any successes so far. Does he or she look appropriate for the business?

There are tons of things to consider when investing in startup. It’s not easy at all. But startup investing is one of the few chance for to radically change your financial life with just few thousands bucks.

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