How to leverage out of the margin
Margin Accounts A margin account is an account that allows you to make quick transactions and take more risks. It allows you to take credit and have access to credit. If you were to have one and sell a stock you can choose to have it go to the margin account or cash. The transaction is faster if sent to the margin account. You will be able to buy something else the same day. If you ask for cash it could take a few days to have access to the funds. A margin account will also give you the ability to take a loan from the broker. In general I would not recommend doing this as it is risky. Another benefit is the ability to use options when you have a margin account. Example: $10000 cash in brokerage. You buy Disney at $100 per share. You now have 100 shares of…
How to fund your life in the future
Exchange traded funds vs mutual funds What they have in common: They can be in cash accounts or retirement accounts. They hold a variety of stocks/bonds/commodities etc. Where they differ: ETFs: Generally follow the trend of earnings of an index such as S and P 500. Can be actively managed or passively. Have lower costs. Have lower taxation only when sold. Transactions are between stockholders and buyers not managers of the fund. Traded on the exchange. Options can be done. More liquid investment. Can be traded quickly. Have leveraged etfs that perform better than the index fund by using margins. Can specify investment industries. Have not been around as long as mutual funds. Mutual funds: Generally managed. Higher cost. Not always follow indexes. You buy in and it is not as liquid. Takes longer to get cash out. Gets taxed by capital gains. Not traded on exchange. No options. No…
The awesome fantastic magic of owning a property
Real estate: is it a goldmine? You can certainly search the internet for topics of wealth building and people that can advise you for a fee. What I have learned is that real estate is what you can make it. What makes it attractive for investors is that you can have a great yield (5% to 100%) on the money you use to purchase. You can write off depreciation of a property and maintenance. You can gift assets and be taxed less by the government. Property prices increase with inflation. You own a physical asset and can borrow against it. Maybe they enjoy fixing up houses. What are the negative aspects of this strategy? This is where many of these websites or advertisers fail to explain. What I found is that real estate is a lot of time and work. This asset is not quickly available if you need your…
Assets build wealth: how the fiscal mind gains assets
Stock market versus real estate A common question that comes up is the stock market yields versus the real estate market yields. Honestly they have similar yields and both increase in value over time. You just need to invest and not take it out during a dip. They will both fluctuate up and down. Time invested is the most important factor. Similarities are: Yields Go up over time Fluctuating You could lose if you pick wrong You will be taxed in some way Both outpace inflation Better to be in sooner for longer Ride out dips Could loose investment if value goes to $0 Differences are the following: Stocks: More fluid (quick to get cash back) Taxed as income and as gains each year Many different types Many different ways of making income (ETFs, options, individual stocks, mutual funds, bonds, mixed securities, commodities, REITs, etc) Real estate: Less fluid (takes…
People are losing money on rent! Find the wealth!
If you have seen my other post about real estate you know the benefits of investing in it as well as the negatives. In my opinion the way we live is backwards. We should be buying property first when we are young not renting and we should be renting when we are older. Example: Young adult: You are 22 years old and just finished college. Starting your first professional career in banking. You earn $50000 per year. You do all the right things maximizing retirement, emergency fund, doordash on the side, making some extra money, start SEP ira, have a Roth IRA, and have an HSA account. You have $0 for a home down payment and you don’t have a lengthy job history for the bank to give you a home loan. You will be stuck living in a rental. You end up paying $1000 per month. You are spending…