Making An Investment

‘Save for a rainy day’ is how the adage goes and our elders too propagated the same so that we have an easy life and do not get stressed for want of money during trying circumstances. In order to make oneself well equipped to deal with the unexpected trials and tribulations that life brings in it is important to follow a good investment plan. It is highly prudent to come up with an ideal investment plan so that you have pragmatic goals that are achievable. Before actually getting into serious investment, it is essential that the investor has a sound financial foundation in place. There should be some kind of emergency funds for that rainy day and the house should be adequately insured.

Making an investment greatly depends on the amount of risk the investor is ready to take. Identifying the investment goal is also crucial because there are people investing actively for different reasons… for asset accumulation, for children’s education or for a major investment like a home. Being aware of the investment goal helps a lot because with this awareness you can decide upon the time horizon of your investment. Then comes the asset allocation.

Another crucial step in the investment plan is to decide on how much percentage of the savings are you going to invest in equities and how much in fixed income instruments like bonds and bond funds. When you are decided on this the next step is to put your investment plan into practice. This execution of the investment plan is probably the most difficult and challenging step for the investor’s investment journey. But once the hurdle is passed, maintenance should not be a problem. However, subsequent maintenance of the tempo also is crucial to let the plan get to completion.

There are a few other factors that will help in the investor’s decision making. Identifying the main cause of investing would give him a sense of commitment to stick to the plan. Otherwise the entire effort would be a directionless one. Understanding whether or not the chosen channel meets the requirements is very crucial… if it does, following up with the plan helps. But if it does not, it is always right to nip it in the bud and choose another investment channel that would meet the investor’s needs.

Identifying the time frame of the investment plan would give you clarity on the finances you may have at your disposal. Understanding your investment channel will greatly help in tapping the advantages to the fullest. For instance, if you are a novice in equities and are pinning your investments there, the amount of risk you are taking is very high. It is very important that you understand the stream of your investment well rather than follow the crowd.

Choice Financial Solutions is an independent financial adviser that is committed to offering its clients pertinent advice as far as investment and investment plans are concerned. The online firm offers services in the areas of investments, mortgages, pensions and protection. Get the expert’s opinions while investing in investment bonds or unit trusts or guaranteed income bonds or portfolio planning. They tailor their services so as to suit the needs of their customers.

How Long-Term Investments Can Benefit You

In uncertain times, with markets usually volatile, it is tempting to make long-term investments and hope to ride out any economic storms.

There are advantages and disadvantages to all types of investment terms so what are the specific benefits of Long-Term investments.

The most obvious benefit of long-term investing is compounding. This is the effect of dividends or interest being reinvested to achieve sustained Capital Growth.

If investing on a regular basis, this equates to cost averaging. This means that you may purchase shares or units monthly for example and the cost of the units will differ short-term but as long as the overall investment increases long-term then any troughs or peaks are smoothed.

What about a lump sum long-term investment?

In this instance you are hoping that the investment increases over the long run to achieve capital growth or any income derived will outweigh capital depreciation. However, what if the investment actually grew over the long term, GUARANTEED.

If you think about it how many investments can you think of that physically grow and offers huge demand and markets.

For a long-term and stable investment, you couldn’t do much better than an investment in Timber. When other investments have been heading down hill, timber remains a solid investment opportunity for the savvy investor. If you look at the return on investment figures for the last forty years, timber comes out as a top performer when measured against many other asset classes.

So how does a forestry investment work?

Usually, an investor will commit a lump sum. This will purchase saplings, fund the land lease, pay commissions and forester/management fees. The saplings are planted and they start to grow. Initially, the saplings are worthless but as time passes the young trees start to gain in value. Weaker trees will be harvested for paper pulp to allow the stronger trees to become more established. Usually, this first harvest will happen within the first five years. The income the harvested trees return will be passed to the investor as an income payment. The remaining trees continue to grow and all the time they increase in value. Further harvests will take place until the investor is left with high value, strong mature trees.

Please allow me to take you through a scenario. For example, an investor initially purchased 600 saplings. After year 4, 300 trees are harvested (returning £5000 in income). After year 8 a further 105 trees are harvested (returning £15,000 in income). After year 10 a further 68 trees are harvested (returning £20,000 in income). To this point £40,000 had been returned in income.

For argument sake, lets me make the assumption that a mature Melina tree (Gmelina Arborea) is currently worth £250 each and over a 12 year cycle the price increased by 5% per annum, a mature Melina tree would be worth £453 approximately.

Therefore, 127 trees would remain after 12 years and harvested. Returns would be 127 X £453 = £57,531. On this basis the overall return would be £97,531 for an initial investment of… £18,000.

Now what if I was to inform you Gmelina has risen in value 2005-11 on average 17.83% per annum.

As a long-term investment option, various bodies predict strong growth for the timber industry and for the foreseeable future. In the UK alone we use 50% more natural resources per person than what nature can replenish. When you weigh-up the long-term nature of timber an investment today is an interesting option to help secure your financial future and maybe even that of your heirs.

Alternatively, if you are looking for UK Pension investment, forestry may just provide the returns you need to start in building your financial security for the later years in your life.

Whatever way you look at it, investment in timber is a solid financial choice.

Begin Investing Right and Effective

In a volatile and unstable global economy, it is very important to build your nest egg. Saving up for the rainy days entails either keeping your money in a secured location within your vault or just a cash box in your home, or depositing it in the bank in a savings account. Depositing in the bank gains a favourable nod between those two savings options.

More often than not those bank savings sit idly, earning a modest interest, less any appertaining withholding tax charged against your interest income. For those who does not need their savings immediately, it is more desirable to take your savings to a higher level of which is investing.

Investing one’s money basically has its own corresponding risks and rewards. The riskier the investments are, the higher the monetary rewards. Before making investment decisions, here are some questions that you should be asking yourself first:

What is my purpose in investing?

The question why in investing decisions is as critical and as important as any other questions. You must ask yourself your reasons for your investment decisions; whether you consider it as a profitable venture with which you can gain income that you will use now, or if you just have excess money in the bank that you wish to earn more. The answer to your investment will determine your willingness to take investment risks.

How much risk am I willing to take?

Now that you know your purpose in investing, you can now decide how much risk you are willing to take. Your risk appetite or your willingness to accept risk will determine the profitability of your investments. The more you need the income, the more aggressive you will become in investing. The riskiest type of investment is stock trading. The value of your investment fluctuates on a daily, even on trading-hours basis. You must practice sound judgement in procuring the types of stocks that you will purchase because this can empty or build your nest egg in one day.

Less risky type of investments includes mutual funds. This is a combination of stocks and bonds being handled by a fund manager. This combines the riskiness of the stocks, and the safety of fixed-income pay-out of bonds. Money market placements also have significantly lower investment risks. Literally risk-free are bonds, notes payable, term deposits, and savings deposits. They guarantee the pay-out of interest income, but the investment returns on this type is significantly lower than in stock trading, mutual funds and money market placements.

How much am I going to invest?

It is very important to assess how much of your savings is really a savings that is not intended for immediate use. Determination of the amount for investment will depend on your desired amount of returns, in combination with your risk appetite. If you want a high-yield on your investments, you need to invest a significant amount on high-risk investment type like stocks. There were cases of investors with a significant bulk of cash; who invested the same in a low-yield, secured investment like term deposits, and practically lived in style using the annuities without touching the principal amount of their investments.

Here Are 3 Work From Home Tips Everyone Should Think About Before Starting Their Online Business

Working from home is one of the best career moves many people make. It’s especially great if you can make just as much, if not more money than your previous J.O.B.

I believe that anyone who really wants to make it happen can make a success of a home based business, even more so if they decide that their home based business is an online business. But, what does it take to earn enough money from your online business to be able to do it full time?

If you are the type of person who likes the feeling of being at home, likes knowing that you are literally one room away from your family (just in case of emergency!), likes not having set hours, or a boss, or even a commute, then a home based online business is perfect. There are also a lot of people who feel the thought of staying at home with the family most days is horrifying! For those people, they are better off with the stability and escape of their 9-5.

If you are one of the many who would love to be an online business owner, then make sure you understand these 3 tips before you go ahead and quit your day job!

ONE – What are your passions in life?

TWO – Keep your day job, at least for now. Set your new online business certain goals that mean you do not quit the day job until all the goals are met.

THREE – I feel like I say this to people more than anything…you are running an online business. The key word here is business. Treat your online business with the upmost respect, hard work and intelligence as you would do if you were investing your time and money in any offline business.

Allow me to briefly summarise each of the above.

First one is discovering your passions. This is a great place to start. Simply because if it is a passion of yours then you won’t feel like you are ‘working’ any extra. If you are genuinely passionate about your business then you will enjoy putting the ‘work’ in. I went to a seminar in London not too long ago and one speaker in particular summed this up well. He said if you can think of 10 chapters for a book on your particular subject, then think of 10 tips for each chapter, then you have a great knowledge of your subject and that book would have great value to the reader. If you can’t, then you are probably not passionate enough about that subject.

Second one is to keep your day job. If you are going to start up your own online business, then unless you already have a good chunk of money set aside ready to invest in it and be able to keep you and your family afloat, then you are going to need the income of your current job. Put the effort in to research exactly how much money it will take to get your online business set up. After that make sure you have also invested in the right online business systems. Only then can you really figure out how much online money your business needs to make to support your lifestyle so you can finally quit that damn day job!

Thirdly was to make sure you have that ‘business’ mind-set. I truly believe this is where so many people fail online. In fact, I have seen it with my own eyes, too many times. Getting yourself mentally prepared to become an online business person is the most important step in my opinion. If you do this then you then you will be prepared for the work you have to put in. This is generally in the evenings and weekends at first, to get your business off the ground. You will also be prepared for any challenges that you will inevitably come across. You see, a real business person even expects these challenges, therefore will overcome them quickly and move on to the next challenge. On the other hand, someone who thinks that making money online will be the ‘easy way out’ and won’t require much hard work, will crumble miserably at their first hurdle.

I sincerely hope that you are going to be one of those people that are thriving online. A home based online business can provide you with the dream lifestyle that you have always desired and deserved. I say, get your head in the game and go for it!