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Bad News Phenomenons that Create Good In...

shortoncashflow — Fri, 18 Sep 2009 08:48:26 +0200

There are generally 4 situations that create good stock buying opportunities.

They are:

Stock market corrections and panics
Industry recessions
Individual business calamity
Business structural changes

We are currently in the middle of bad news phenomenon #1. Unfortunately, no one knows at this point if the stock market will rise or fall. Some analysts predict that this is just the beginning of the long brewing financial storm while others believe things are calming and getting back to normal.

I believe the storm is just beginning. The US government has been putting band aids on the financial imbalances and debt that has been growing since we were taken off the Gold standard in 1931.

Even after the big drop in the DOW from 14000 stocks are still way overpriced if you look at their PE ratios. Also if you take a look at dividends per earnings per share they are far below the historical average.

It’s time for the US government to stop meddling with the financial world and let the system work itself out. Banks need to fail. Assets need to be deflated. People need to lose jobs if businesses can’t run on their own. Trade imbalances need to be restored. Most of all, large business and financial institutions need to stop getting bailout money!

If the stock market takes a big dip again as many expect it to it could be the perfect time to make great investments. Always be sure to do your homework and due diligence before putting money anywhere. Work as hard investing your money as you do making it!

Is it Time to Invest in Gold?

shortoncashflow — Fri, 18 Sep 2009 08:43:07 +0200

Is it time to invest in Gold ? Gold expert Mike Maloney seems to think so. Although he has been preaching the same message for a while I believe he is on the right track. In a recent video he showed us on a chart the progression of Gold vs. the dollar over the past 100 years.

Gold is currently priced in the 900 range. In order for Gold to match all the dollars and credit in circulation right now, the price would have to sky-rocket to $15,000. That is a good indication of how many overprinted dollars are currently in circulation. (Over half outside the US).

If Mr. Maloney’s analysis is correct, we may never see Gold below $1000 again after this year and the US could go into a hyperinflation which would eventually mark the death of the dollar.

So now that Gold is still reasonably priced it may be time to acquire a position. Although, Silver is considered by many to be the greatest bargain right now. As Gold becomes more and more expensive people will flock to silver to store value and drive the silver price much higher in proportion to the Gold price.

We are living in difficult times for some and times of great opportunity for others.

Warren Buffett’s Consumer Monopoly Inves...

shortoncashflow — Fri, 18 Sep 2009 08:34:53 +0200

According to the famous book, Buffettology, Warren Buffett looks for companies to invest in that he considers consumer monopolies. The companies usually have most of the following characteristics:

· The company show strong earnings with an upward trend for the past 10 years or so

The company usually has a strong brand name with good consumer loyalty
The company is conservatively financed and holds little debt. So it is prepared for setbacks and opportunities if they present themselves.
The company must earn a high rate of return on shareholder’s equity
The company must be able to retain earnings and not have to spend it on current operations

Consumer monopolies tend to experience a large increase in long-term economic value. The trick for Warren Buffett is to find the consumer monopoly at a discounted price and then he holds the stock for long periods of time letting the earnings and growth compound year after year.

While most investors are short sighted, buying on good news and selling on bad news, Buffett takes the long view and it has made him the richest man in the world.

More expert ideas on stock investing you can check out the section Investing for Beginners at www.shortoncashflow.com .

How to Overcome Your Fear of Investing i...

shortoncashflow — Fri, 12 Jun 2009 04:59:10 +0200

Investing
in real estate to get monthly cash flow seems like a good idea to you but you
are not sure you are ready to take that step yet. What if you are not able to
deal with it? What if a natural disaster destroys your hard-paid property? What
if you can’t rent it out and are left only with expenses? What if the renter
breaks everything or don’t pay the rents?

The
main reasons why you would fear something is because you are not familiar with
it and you don’t have the support of the people around you because they are not
familiar and they are afraid of it too! So you can start by finding information
on the Internet about legal aspects, how to buy a property, what types of
protection against dishonest renters or natural disasters exist, etc. As you
get acquainted with the topic, start contacting agencies or sellers directly in
order to take your first step in the process: visiting properties that are for
sale. You don’t need to sign any purchase agreement right away! Just start
becoming part of this world and when you feel more comfortable, take another
little step. You’ll see how things are less scary from the inside than they look
like from the outside.

When
you are ready to buy, make sure you pay the right price so that you are not
stuck with mortgages you cannot face later (I wrote another article about this
specific topic).

Once
you own a property and you want to rent it out, you want to implement a smart
screening process to lower the risk of unpaid rents. It is also recommended
that you take insurance coverage against that issue. Make sure both the renter
and you sign a written agreement that meet current regulations so that you can assert
your rights in court if necessary (usually, insurance coverage against unpaid
rents include coverage of the related legal expenses). There is insurance
coverage for about everything but the two you really need are coverage in case
of natural disaster and coverage against unpaid rents.

You
know how they say the best way to learn is by making mistakes? Maybe that’s
what holds you back: you want to invest but you certainly don’t want to pay a
heavy price for your mistakes. Well the good news is that Fred and Sally
already made the mistakes for you and are telling all about it at www.shortoncashflow.com . Don’t miss
the opportunity to learn from their mistakes about investing for beginners !

Investing in Real Estate

shortoncashflow — Fri, 12 Jun 2009 04:57:59 +0200

As
tough as an economic crisis might be, it should always be remembered that it
also offers great business opportunities for those who are prepared to seize
them. Now is the perfect time to get ready: learn about investing, get acquainted
with the different types of investment, keep yourself updated with trends in
the markets you feel more comfortable with and elaborate your plan. Since there
is no avoiding it, you want to make the most out of the crisis.

The
current economic crisis is obviously affecting the real estate market as it’s
becoming more and more obvious that properties have been overvalued in the last
10 years. While unemployment is growing, banks are also more reluctant to grant
loans. Which causes a drop in property sales. In the short run, sellers will either
have to lower their prices or not sell at all. Investing in real estate could
therefore be a great way of generating cash flow.

I
am not talking about buying cheap, waiting for the prices to go up and selling
the property trying to make a good profit. It’s called speculation, it’s a
method based on the overvaluation of properties and it can become very tricky
when a crisis hits the economy (see what I mean?!).

How
to generate cash flow with a property? By renting it out. You make money by
collecting the rents on a monthly basis. For this strategy to work, you need to
balance your income and expenses properly: make sure to invest in a property
that you can easily rent out (so that you actually have rental income) and buy
at the right price (so that you don’t lose money on your investment, not even
at the beginning).

The
hardest thing is to estimate your expenses right because it’s very easy to
overlook something that, year after year, ends up costing a significant amount
of money. Make sure you take into account the taxes you will be liable for as a
property buyer and a landlord, the expenses related to maintaining the
property, the expenses related to keeping the building in good shape (if you
are investing in a flat), potential vacancies and insurance costs.

When
you have a pretty good estimate of the rent you will be able to charge and the
expenses you will have to support, you can calculate the amount of monthly loan
payment you can afford and hence the amount of money you can borrow to buy the
property (make sure you take interests into account). This is how you should
calculate the price you offer for a property, no matter how much the seller is
asking.

You
can learn more about investing for
beginners in simple terms at www.shortoncashflow.com where two small investors share their experience and mistakes.

Want to Be Rich? - Get in Debt

shortoncashflow — Fri, 12 Jun 2009 04:56:18 +0200

This is no big secret here. We all want to be rich.
The question is how you go about making it happen. We some people would tell
you in order to do this you must first get in debt. Now I know that might sound
crazy to you but it does make since when you think about.

When I say get in debt I don't mean that you should
get a bunch of credit cards and buy like crazy or acquire multiple loans for
cars and jewelry you don't need. Those kinds of debts cost your money. All
those product depreciate in value and you end up paying way more than what they
were worth. Even things like vacations, as fun as they may be, will cost you in
the long run once it is all over.

If you really want to be rich you need to get debt
that will make you more then what you borrowed. For example, if you got a loan
from the bank to start a business and the business started to grow then that
debt would be considered a good debt. Your business is worth more that what you
borrowed. A student loan for college is another good reason to get in debt.
Once you graduate, your education will give you the opportunity to make a good
living which will also be worth more than what was loaned out to you. That is
the kind of debt that you need if you want to be rich.

Too many people like the idea of looking rich. They
buy a lot of stuff to impress there friends into thinking that they are rich
only to get in debt to deeply. Why would someone spend so much money trying to
look rich when they could put that money into something that may actually make
them rich? If you are guilty of doing this then stop right now before you get
way over your head.

Now that you know how to get in debt you can then
be on your way to achieving this. You want to be rich with debt that goes up in
value not down. I know that it not always possible to never carry a bad debt
but the more good debt you have the better the chances of success.

If you are looking for ways to make money that will not put
you deep in debt and give you a chance at become rich then go to our . For more
business opportunities then go to: http://www.allproman.com/product-reviews/ .

5 mistakes to avoid as beginning propert...

shortoncashflow — Thu, 16 Apr 2009 06:21:58 +0200

1. Purchasing a property as a person and not as a
business – depending on
your country, making the purchase of a rental property must be made by a legal
business to deduct the monthly mortgage
expense . Otherwise you can end up paying a lot of tax on rental income even
if you are losing money on the property.

2. Not getting rent insurance to save money – this can be a huge mistake! In many countries
the renter is overprotected by law and in some instances it is very difficult
to kick out a renter who is not paying. You must always have insurance to keep
yourself safe against unscrupulous renters, that will pay you and legal
proceedings if they don’t.

3. Purchasing in an up market at a high price – even if you are buying to rent long-term and
the monthly cash flow is in positive numbers you should never pay too much for
a property or buy at the top of a market. This will eliminate any chance of
selling it for a profit with a reasonable number of years.

4. Using the seller’s price to start negotiating – what the seller is asking means nothing. Make
your own evaluation of what the property is worth and make an offer based on
that. Never feel bad about making a ‘lowball’ offer. Offer less than you are
willing to pay and only come up to that set amount, completely ignoring the
initial asking price.

5. Not investigating community behavior and
expenses – make sure you
look over a history of community actions that will involve your money.
Sometimes communities vote constantly for repairs and improvements which will
cost you a fortune and kill you property’s
cash flow . They can also mismanage money and over pay for repairs.

Spain property market

shortoncashflow — Thu, 16 Apr 2009 06:20:13 +0200

My wife, Sally, and I have been following the Spanish property market
since the beginning of the housing bubble in 2004. It was just when we first
started to educate ourselves about economics and finances, that housing prices
in Spain started going through the roof. With our limited
financial situation it made it impossible to make our first property investment .

Our intention was not to speculate on rising prices but to earn more
monthly cash flow. All of our work is oriented to building and buying more cash
flow producing assets, may it be Websites, a business or property.
Unfortunately for property we became interested just at the wrong moment as
speculation set in, banks started going nuts giving 100% and more loans to
insolvent borrowers.

For the past 10 years the largest part of Spain ’s economy has been construction. With that and
tourism, the country doesn’t really produce much else. With the construction
boom in Spain and soaring property prices everybody felt richer,
there was more work, people’s houses were worth more, immigrants were migrating
into the country for work at record numbers and Spain had the fastest growing economy of the European
Union. An enormous bubble was inflating.

Now the bubble has finally popped. In 2007 housing sales starting
slowing and in the 2008 sales dropped big time and the crisis set in. Now Spain ’s sole pillar of economic growth, construction,
has come to a grinding halt as there are anywhere from 1 to 1.5 million excess
new properties on the market waiting to be sold. Now unemployment in Spain is soaring with no end in sight. People are
defaulting on their mortgages and
many many properties are being repossessed and auctioned by banks.

If you browse Spain ’s leading housing site, idealista.com, you can
see that asking prices for properties, for the most part, have not lowered
much. People are still trying to sell their small flats for the price of a mansion.
It remains to be seen how long the high prices can hold out as Spain is expected to be the country to fall the
hardest, having had the biggest property boom of the world, even bigger than
the US and the UK .