So a MST is a market historian first, stock operator second.  This being the case, we refuse to make “calls” about where the market is headed.  Like Jesse Livermore, we’d rather not even use the terms “bullish” or “bearish,” as it tends to put one in the position of defending their “side.”  We’re not in the business of fruitless pursuits -namely, taking part in market debates.  Besides, there is nothing new under the sun.  It’s all been argued before.  It is much easier to reconcile this when one is tempered by history.  This is why a thorough study of past markets is a must.  It is the MST’s foundation and what he depends on for real-time market analysis.  Make sure that foundation is strong.

“There is nothing new in Wall Street. There can’t be because speculation is as old as the hills. Whatever happens in the stock market today has happened before and will happen again.” -Jesse Livermore

Stick to what’s important: price/volume action.  When viewed through the lens of history it will tell us all we need to know.

1.    Prefers a stock with excellent fundamentals that has some technical flaws in its chart to a stock with an excellent chart but that has some flaws in its fundamental picture.  He initiates positions in stocks that are breaking out of primary base patterns such as “cup-with-handles,” “cup-without-handles,” “saucer-with-handles” and “double bottoms.”  Penny stocks, thin stocks and the stocks of companies that do nothing but lose money need not apply, no matter how enticing the “story.”

2.    Initiates positions in equal dollar amounts, adding to the positions in a way that the portfolio is concentrated in the best performing stocks.

a.    First buy: 50% of position at pivot point
b.    Second buy: 30% of position at 2% to 2 1/2 % above pivot
c.    Third buy: 20% of position at 4-5% above pivot

3.    Pyramids into positions in a disciplined way. Stocks must prove themselves.  Leaders are fed; laggards, starved.  Leaders exhibit their strength by running more than 20% in three weeks or less, for example, or by closing higher in 12 out of 13 trading sessions.  The MST, however, adds to these positions so as to keep his cost-basis low (below the 50 day moving average is preferable, though the lower the better).

Therefore, the MST is constantly on the look-out for secondary base patterns (“ascending bases”/”flat bases”) to add shares.  Depending on the strength of the market rally, up to a half-position may be taken.  He is also alert enough to see add-on buy points that indicate strong institutional demand, patterns such as “three-weeks tight” and the “short stroke,” as well as rebounds off of the 10-week or 50-day moving average.

“Force-Feeding” Guidelines:

A.    Add a 10-25% position the first two times a stock pulls back to the 10-week or 50-day moving average and bounces on strong volume.
B.    Add a 10-25% position when a stock forms a “three-week tight” or “short stroke” pattern.

C.    Add up to half a position when the stock forms a secondary base, such as an “ascending” or “flat” base.

D.    Add up to a full position when the stock forms another primary base (“cup with handle”/”double bottom,” etc.) and breaks out.

IMPORTANT:  Book most profits at 20%-25%.  If the stock runs up 20% or more within three weeks’ time, however, that’s unusual strength.  It could very well become a Monster Stock.  At the very least, hold it for eight weeks.  We repeat, barring a complete crash in the stock’s price, it must be held until the end of the eighth week. We can reassess the stock’s prospects at that point.

4.    Cuts all loses short.  No matter what.  No excuses.   William J. O’Neil said it best: “The whole secret to winning big in the stock market is not to be right all the time but to lose the least amount possible when you’re wrong.”  This is one of the most capable operators in market history talking.  One would do well to heed his advice.  Some very successful traders will cut a position by a third when it closes 3% below what they paid for it, another third when it is down 5%, and they will sell out when it hits a price 7% below what they bought it for.  Don’t worry, though, if the stock makes a comeback we can always buy it again.

5.    Buys back the shares lost when he falls victim to a shake-out.  In fact, if a MST is shaken-out of a position or even just the shares that he’s added to a position and the stock then roars back on strong volume, he’s not just buying back those shares that he lost but about 10% more to make up for being shaken-out.

6.    Does not use margin unless the market is strong and there are leading stocks that are forming/have formed/or broken out of proper bases.  If your portfolio isn’t up at least 2%, do not use margin.

7.    Acts quickly and eases off margin if distribution begins to hit the market.  Keep in mind, however, that the market can top fast, sometimes with just two or three distribution days over a short period.  In fact, if the market suffers three distribution days in a row, you shouldn’t need to be told twice: get off margin.  Also, always keep an eye on what the leading stocks in the market are doing.  Have they already shown signs of topping?  Given the fact that they are the leaders, they will often portend what’s to come.  Remember, four or five distribution days within a few weeks is usually enough to kill a rally.  Don’t hesitate in protecting your portfolio, selling your weakest stocks first; furthermore, don’t rationalize, make excuses or get emotional.  Just act.

8.    Always “plans the trade and trades the plan.”  This, however, is something we do outside of market hours.  Don’t get caught flat-footed while the market is open.  This is how mistakes are made and money is lost.  Whether we are buying or selling a stock, these decisions are best made the night before.  Know exactly where you’ll buy, add or sell shares.  That way you’ll never get caught up in the noise of the market’s action or make decisions based on emotion, such as chasing a stock or selling it out of fear.  When the market is open, the MST is robotic.

9.     Knows when to take profits.  For example, a MST doesn’t buy into climax runs, he sells into them.

Or he sells a stock when it breaks the long-term upper trend line.

(Note: We need a period of at least four to six months for an upper trend line to be valid.  Also, the same can be said for a breach of the long-term lower trend line.  If the stock closes the week below this line, sell it.)

Unlike most
things in life, there is an undisputed king of cryptocurrencies, and it happens
to be the very first one ever. This is (predictably) the Bitcoin. Starting out
as a small concept made by an anonymous coder, turned global phenomenon, and
even achieving pop culture status more recently, the Bitcoin is completely
undeniable, and hard evidence to all the naysayers out there that the idea of a
cryptocurrency warrants some attention and respect. However, the Bitcoin wasn’t
always the world renowned icon it is now, it had humble beginnings had had no
shortage of challenges to reach where it has today, so in this article, we’re
going to break down the history of the Bitcoin, and see how exactly we got here
with it.

Inception and Launch

As
mentioned, Bitcoin was the first real open source online currency, and
effectively kicked off the wave of the hundreds of cryptocurrencies we see
today. However, as opposed to most other cryptocurrencies today, the story of
the Bitcoins birth is a bit foggy. This is as a result of one man ‘Satoshi
Nakamoto’, the anonymous creator of the Bitcoin.
Mr. Nakamoto’s identity remains unknown to this day, although many speculate
about his true form, it remains a riddle, whose answer it seems we’ll never get.
The domain, ‘bitcoin.org’ was registered in August of 2008, the following
month, in October, Nakamoto published a paper entitled ‘Bitcoin: A Peer-to-Peer
Electronic Cash System’. Bitcoin itself was launched in January of 2009, where
Nakamoto mined the first block of the chain, entitled the ‘genesis block’. Experts
suggests that Nakamoto mined about 1 million Bitcoin before disappearing into
the shadows in 2010. And the rest, as they say, is history.

Formative Years

All seemed
well and good until the year 2011, wherein Bitcoin would see the inception of
what remains its biggest criticism till date, its use in anonymous online
transactions. At this point, the online black markets listed on the dark web,
such as Silk Road, began using Bitcoin as its primary method of transacting.
Bitcoin perfect served their purpose, as it was relatively untraceable, and
being completely open source, was not shackled by the laws and regulations of
any government. As mentioned, this criticism of the currency persists to this day,
with it still being massively used in the online drug and arms trade. This is
around the time when Bitcoin started appearing more publically on news
channels, and think tanks. Its popularity was on the come up, and the mining of
Bitcoin was becoming a very popular choice for those vested in the disciplines
of trade and block chain. In the years of 2013-2014, Bitcoin was widely in the
public eye, and the government was forced to enforce regulations on its trade.
For example, the US Financial Crimes Enforcement Network laid out regulating
guidelines for ‘decentralized virtual currencies’ essentially a fancy way of
saying cryptocurrencies. China has historically taken exception to Bitcoin, as
in 2013, the central bank prohibited all banks from using Bitcoin.

Break into Mainstream

The years
2017 and 2018 really are when the world was truly introduced to cryptocurrency
in a big way. If you’re in any way versed in finance and trading, you’re
extremely familiar with what follows. At the beginning of 2017, the price of a
single Bitcoin was just shy of $1000, however, by the end of that year,
specifically on the 17^th of December, 2017, the price of a single
Bitcoin rose to a record high of $19,783, a high which is yet to be matched by
any cryptocurrency, and the Bitcoin itself. However, it’s arrival into the
mainstream only made its critics more vocal by association, and it’s concerns
with security, as well as the aforementioned argument of illegal trade has
cemented a negative image of the Bitcoin and cryptocurrencies in general in the
minds of many, an image which begs to be shook off till this very day. However,
traditionalists and purists aside, Bitcoin certainly resonated with the younger
generations of traders and analysts, which is what has made its price stabilize
just over $10,000 in recent memory. To extend Bitcoins issues with the Chinese government,
in 2017, China banned the use of Bitcoins in any capacity, further cementing
their anti-cryptocurrency stance.

Present Day

Presently,
the value of a single bitcoin stands just above $11,300, and is expected to
rise steadily throughout this year of 2019. Both historically and presently, cryptocurrencies
have tried, and failed to match the overwhelming dominance of the bitcoin. In
some circles, Bitcoin is synonymous with cryptocurrency, and it has slowly
crept into being somewhat of a popular culture reference machine, with myriad references
to it on sitcoms, films, and standup comedy. The Bitcoin has become a truly
undeniable force of nature, and it has popularized the block chain
infrastructure, which thousands of companies have begun experimenting with the
world over.

It’s very
easy to see and recognize that Bitcoin is a global phenomenon, but without
truly understanding the challenges and hurdles it had to face to accrue the
cult status that it has, you will never understand the context behind it. Global
breakthrough such as these always have a story behind them, and to understand
the story is to understand the product, so one cannot truly understand Bitcoin,
without understand it’s past as well as it’s present, which will then grant a
knowledge of its potential future.

When I was a beginner, I experienced all these problems. I also looked for the best forex brokers and traded with them some time. Then, I lost all and I realized that there were no best brokers in the world. There are only the brokers that suit your needs and trading strategies. These brokers are called best brokers which can help you succeed in this market. From my experience, I will recommend some ways for picking the best brokers for beginners.

Looking for reliable brokers

In my opinion, the best brokers are the brokers that have reliable regulations. These regulations should be licensed by reliable regulatory organizations. For example: FCA (United Kingdom), NFA, CFTC (United States), ASIC (Australia), FSA (Japan) and CySEC (Cyprus). To know which brokers are reliable, you can also check their search traffic and ratings. The top 5 forex brokers in the world often solve problems fast and treat their traders well, thus having high ratings. But, only people who want to invest large amounts of money pay attention to these brokers. Beginners often open an account with a small deposit, so they aren’t worried about scams. By using the Internet, I found some good and reliable brokers that can be suitable for beginners. They include Exness (8/10 rating), XM.com (7.5/10 rating), FxPro (6/10 rating) and Forex.com (6/10 rating).

Checking minimum deposit

Personally, I think the best brokers for beginners should require low minimum deposit. As mentioned before, most traders lose all money at the beginning. So, they look for brokers with low deposit requirements to lower their losses. In this stage, I highly recommend depositing less than $100 for 3 months of trading. Professional traders do not pay attention to this factor. Instead, they care about spreads, commissions, leverages and quote’s quality.

Many beginners choose demo accounts for practicing before starting real trade. However, I think that cent accounts are the best choice for them. Cent accounts do not require minimum deposit and they offer very real trading conditions. Especially in Exness, you can deposit as low as $1 or how ever much you want. Moreover, you will get real money if you win these accounts. So, I advise that you should choose cent accounts if you’re beginner and want to learn trading problems.

Considering mini lot trading

A standard lot in forex trade is 100,000 units of currency. It’s too high for beginners. But, there are also nano, micro and mini lots that require 100, 1,000 and 10,000 units respectively. The best brokers for beginners should offer many trading lots with small sizes. For example 0.0001 USD for each lot in USD.  I recommend beginners should trade mini or micro lots to open positions as small as possible. Cen accounts can be the best option for you. As mentioned, these accounts require very low minimum lot trade. Besides, you can deposit $10 for each month trading, which is very low. You can withdraw your money if you win cent accounts. Some brokers even allow you to deposit however much you want. Those brokers are Exness, FBS and XM.

Deciding the trading systems

Another factor that you should consider when choosing the best forex broker for beginners is their trading systems. So, check if the broker you want to choose meet the following requirements.

First, they should have various payment methods. Beginners should consider depositing by Visa/Master. This is one of the easiest payment methods for those who just start trading.

Second, they should have easy and convenient trading methods. There are many different methods of forex trading. Beginners should choose web trade or web terminal for easy trading in this stage. When you have enough knowledge and experience, you can trade MT4/MT5.

Good trading systems are very important for beginners. They can help save time, remove cognitive biases and achieve positive trading results. So, consider trading with brokers that have good and easy trading systems.

Checking the local support

Forex trading is very difficult for beginners. When I started my trading career, I experienced lots of problems related to security and login. At that time, I was always seeking help and advice from my broker. As my observation, many other traders also had the same problems at the beginning. Thus, I suggest that beginners choose brokers that have good local support and customer care. In particular, the best brokers for beginners should meet the following requirements.

First, they should assist you in your own language.

Second, they should have offices in your country. This can help solve your trading problems faster. And if the broker scams you, the law in your country will protect you.

Finally, they should offer 24/7 customer support.

I know some brokers that meet the above qualifications, such as Exness, FxPro and XM. Specially, Exness assists their traders in 13 different languages. Besides, they have regional offices in most of Asian countries. In some areas where they’re not popular, they support by phone and live chat.

Examining training programs

Beginners that want to learn and improve trading skills should focus on this factor. Currently, some brokers provide their traders with weekly or monthly training courses. These programs and courses are very beneficial for beginners, but can require deposit. So if you’re interested in these programs, you can register account and deposit money. After finishing the trading courses, you can change to a better broker that suits your needs and strategies. And, remember to choose only the reliable brokers that require low deposit. XM is one of the big forex brokers that offer many training programs. You can consider this broker if you want to learn more about forex trading.

The above are six tips for finding the best brokers for beginners. I hope that my knowledge and experience can offer you valuable information. If you’re just starting trading, consider these tips carefully.

With the competitiveness of the current job market, it is near impossible to get a decent paying job without a college degree. Homes serve an essential need of the human species: shelter. And in some economies, life without a car is difficult at best, and impossible at worst. Furthermore, a new Federal Reserve report shows that millennials are making 20 percent less than their parents did at the same stage in life.

So, we’re earning less, and the debt we’re accumulating is founded upon essentials for the progress of our everyday day lives. We didn’t choose debt. Debt chose us.

Most financial experts define debt under two categories. Good debt and Bad debt. Good debt is debt that makes you better off financially by working for you. It is money you borrow to purchase assets that puts money in your pocket. For instance, a bank loan on a rental property. On the other hand, bad debt is debt that leaves you worse off financially. This includes debt on credit cards, car loans, student loans, and loans from family and friends to purchase things that do not appreciate in value.

Although the odds may be against our generation, it is not impossible to overcome debt and work towards financial health.

Below are some of the tried and tested steps that I’ve gathered from millennials who have successfully escaped the bounds of bad debt and now enjoy debt-free lives:

1. They started by listing all their debts:

Realizing that ignoring their debt will not make it go away, they started off by creating a detailed list of everything they owe. From the mortgage, right down to the $50 shoes they bought using their Macy’s credit account.  Every single debt. They then summed it up to have a total debt figure. Most said that knowing the total sum of  the debt they had at any point gave them  a sense of direction.

2. Creating a payment timeline

One of the millennials said she created three columns next to each item on the debt list. The columns were named: amount owed, minimum monthly payment, and number of months. To get the number of months required for her to pay the debt, she simply divided the amount owed by the minimum monthly payment.

Creating the payment timeline is essential in creating the debt free goal date.

3. Prioritizing the debt

The step of prioritizing certain debts over others is crucial. It can be done in different ways based on one’s personal discretion. Some preferred to  pay off debt with the highest interest rate first so that the value of the amount owed does not increase over time. Others prioritized based on the most urgent debt.

In the absence of emergency payments such as mortgage payment, another option is to  tackle debt from the smallest debt to the largest debt. Since the debt repayment process can be long, the satisfying feeling of “small wins” through debt repayment early on can be extremely encouraging.

An important note is how they made sure to order their debt payment by number. The relevance of this is so they knew the order in which they would be paying off their various debts.

4. They cut off subscriptions and took on side hustles

Noting that they actually didn’t attend gym as often as they wanted to during the month, a lot of them said the gym membership subscription was the first off the list. One millennial  mentioned how they used Uber a lot less since it was costing them in excess of a hundred of dollars a month.

Getting a side hustle was mentioned as having played a crucial role in the debt reduction process. Top side hustles mentioned included being a Uber driver, selling merchandise on Amazon and starting a network marketing business.

5. Developed a payment strategy

One millennial developed an interesting payment strategy based on his list of numbered debts. The first thing he did was to pay the minimum amount on every debt he listed except for the first one on the list. On this first debt,  he paid the minimum amount due, plus the additional amount earned from his Amazon business side hustle. He continued to do this each month until his first debt was paid off. He then used the money he was contributing towards the first debt towards paying the second debt off.

For instance, if the minimum amount due for debt “1” was $30 and he added an additional income of say $100, then his total monthly payment on that debt would have been $130 each month. And if the minimum amount due on the second debt on his list was $50, once the first debt was paid off he would now pay $50 plus $130. Making  a total of $180 each month going towards paying the second debt. He continued with that process until  most of the debts on his list were paid off.

6. They put their money towards cash generating assets

Since the last debt on the list for most of them was something substantial, they maintained the minimum payment every month. Instead of using the excess money towards paying off the large debt completely, they used it towards “paying themselves first”.

A concept made popular by renowned wealth expert, Robert Kiyosaki, “paying yourself” first means dedicating your income towards either assets that generate positive cash flow for you each month or towards long term investment vehicles.

According Robert Kiyosaki, the reason why 90 percent of people never reach a state of financial health is because they pay themselves last. This makes the last step in the process applied by these millennials perhaps the most important in overcoming the circumstances of being chosen by debt.

So why do so many people (myself included) have trouble with saving? On this page I want to share some of my best tips for saving money. Saving (and by extension, living below your means) is one of the major pillars to financial freedom. Because as the famous saying goes, “It isn’t how much you earn, it’s how much you keep.”

Although there are several methods to save money, there are some surefire ways to make sure you’re putting enough money away. Most experts generally recommend that you save at least 10% to 20% of your income. Saving consists of liquid savings, such as the cash in your savings account, and retirement funds.

We cover retirement in depth elsewhere in this blog. For now, we’re going to focus on liquid savings.

As with anything, it’s important to establish a savings plan that works for you. Give yourself a goal you want to obtain, then start working towards that goal. Want to take that vacation you’ve been waiting all year for? Plan for it. Looking to buy a house at some point? You’d better start saving for a down payment now. It’s important that you set savings goals that are reasonable, to keep from getting discouraged.

It’s highly unlikely that you’ll be able to effectively save 100% of your take-home pay. How would you live? Instead, give yourself a percentage (for example, 10% of each paycheck) or a dollar number each pay period. It doesn’t matter if it’s as much as $5 a paycheck. What matters is that you get in the habit of saving. Read on for tips for effective savings!

1. Pay yourself first

This is the golden rule of saving. You go to work, work hard, and collect your well-earned paycheck. The government gets its cut, and then you immediately start paying all of your debts and bills. When you’re finally done paying everyone and everything else, you have little or no money left over for your savings account. You’re doing it wrong! After taxes, you should be first in line to get paid.

Find some percentage or dollar amount that you’re comfortable with, and as soon as you get paid, immediately put it away in savings. Then, and only then, start paying your bills. Not only will you start contributing to a healthy savings, but you will naturally learn to cut unnecessary expenses from your budget to make up the difference.

Trust me, your expenses always inflate to match your income. If you lower your income, you will find a way to lower your expenses if you don’t have it to spend. But instead of money lost to restaurants and expensive lattes, that extra cash will be tucked away safely in your savings account. Which leads us to our second step of effective savings…

2. Automate your savings

Automatic savings are crucial to establishing a solid savings. This includes direct deposit and/or automatic transfers to a savings account, separate from your main spending account. For this, I recommend keeping your savings at a different bank than your checking account.

For example, my primary checking account is with Bank of America, and my savings account is with Ally Bank. Each payday, I have a specific amount from my paycheck automatically transferred to my Ally account. Ally is an online-only bank, so it makes it more difficult for me to withdraw money from it.

Ally’s 3 day withdrawal time gives me some time to really think about whether what I’m withdrawing money for is truly worthwhile (Hint: Most of the time, it isn’t). On top of that, at time of writing, Ally offers 1% interest on all balances kept in your accounts. This is much higher than most traditional savings accounts, so I enjoy a nice interest bonus each month!

3. Set up an emergency fund

An emergency fund is an extremely important concept in personal finance. It can really save you when you’re in a pinch, and keep you from resorting to credit cards in an emergency. Experts generally recommend having an emergency fund of approximately 3 to 6 months of expenses, or more if you have unstable income (or responsibilities, such as a child). 3 to 6 months worth of expenses may be an undertaking, especially considering that you probably have other expenses and bills.

To begin, it’s a good idea to establish an emergency fund of $1,000 to begin with, then slowly build up to the 3 to 6 months after you’ve paid off all debt (more about debt here). Then, in the event that you have a car repair or unexpected medical bill, you don’t have to use a credit card then get wrapped up in interest. Especially considering that at time of writing, the average credit card interest rate in the U.S. is over 16%.

That’s money you could be saving or applying to something else. It’s unfortunately really easy to get buried in credit card debt, and you’d like to avoid that at all costs. It’s no surprise that the average U.S. household credit card debt in 2016 was over $16,000, according to NerdWallet.

4. Create a budget

Saving means nothing if you’re spending more than you earn. This is where a budget comes in handy. You can learn more about budgets in the budgeting section of this site. In short, budgeting tracks every dollar that comes and goes.

Budgets are invaluable when it comes to saving because they will help you show where you can cut back on expenses, which in turn can be put to savings. There are plenty of budgeting apps such as YNAB (You Need a Budget) or Mint that will help you keep track of your expenses and savings accounts.

A common misconception of budgets is that you can’t spend money on things you want, and have to deprive yourself in order follow a budget. This couldn’t be further from the truth. A budget is simply a detailed look at your finances, and allocating money to where you want it to go.

If you like to travel, work travel expenses into your budget. If you like to go to the movies once a month, that’s ok too. Just make sure that you’re recording it, and you’re sticking to your budget. Over time, you’ll start to see places where you can improve your finances, and you’ll adjust accordingly.

After seeing that you spent $200 on fancy restaurants for the third straight month, you’ll start to consider eating in more often. Or you might realize that you really don’t use Netflix as much as you thought you did. The point is that you’re aware, and you’ll find places you can cut back.

Answer is, they don’t know any better.

Before we dive in… remember, we are not financial advisors and by no means should this guide be meant to act as financial, tax, or legal advice.  It’s for informational purposes only. Consult your own professional advisors before you make any financial choices like this.

The Self-Directed IRA for Real Estate

Walnut Hill’s primer on Private Investing within your IRA is here

There’s something called a Self-Directed IRA.  They’ve been around for a long time… and in the past several years lots of people have realized that their IRAs aren’t earning them a darn thing very much.  So, those people (maybe this is you) have started to look for other ways to earn better returns with that same IRA.

Enter the “self-directed IRA”.

A self-directed IRA is simple. It’s a retirement account that has the same tax benefits as a normal IRA… but, you have more flexibility in deciding what you want your IRA to be invested in.

You can invest in…

Real estate (commercial, income generating rental property, rehabs, etc.)

Promissory Notes secured by mortgages (i.e. – private lending)

Tax lien certificates

Limited partnerships

LLC’s

Sub-C corporations

Real estate options

Some types of precious metals

… and the normal investments like stocks that your normal IRA can invest in

Basically, this opens it up so you can buy investment real estate with your IRA… or be a private lender in real estate.

Walnut Hill’s primer on Private Investing within your IRA is here

Are There Restrictions?

Yes, there definitely are.  There are restrictions on what you do with the real estate if you buy and hold… what types of precious metals… and often times the “custodian” of the SDIRA has restrictions on what they think you can and should invest in.

A custodian? Whats that?

Great questions.

Self-Directed IRA Custodians

The US Government created the SD-IRA to help investors take more control over their investments while at the same time still getting the tax benefits. But, at the same time… they don’t want people setting up these SD-IRAs and just doing whatever they want.

So there is a barrier that they have to have in place… and thats the custodian.

The custodian is usually the Self-Directed IRA company who you have your IRA with. They act as the “go between” when you’re going to make an investment.  Many custodians have guidelines on what you can invest in, how long it will take for you to actually make your money work for you once they approve the investment… etc. Some custodians are more passive… and let you actually have a checkbook where you can write checks from your SD-IRA to make investments.

You should do your homework and find the custodian thats right for you.  Here’s a few that we know and respect:

CAMAPlan – Philly local and our top recommendation.  Call Ryan Fischer at 866 559 4430

Do some research to find the right fit for you.

Some have more expensive fees than others… and some give more flexibility than others.

What To Ask A Self-Directed IRA Company Before You Work With Them

Before you sign on with a SD-IRA company… ask them a few key questions.

What are your fees?  – Fees can vary wildly. Some charge an annual fee based on the value of the account, some charge an annual fee, some charge large setup fees, etc. Find out what works for you. But, the idea is that by being able to invest in real estate with your IRA… you’ll more than make up for the fees you’re paying with your higher returns.

What’s the process for approving an investment? – Some companies can take up to 30 days+ to fund an investment after you send it in for approval. Some SD-IRA’s give you what’s called “true checkbook control”, where you actually get a checkbook where you can write checks from your IRA account… which gives you immediate access to the funds (i.e. – to close a deal quickly). Checkbook control usually is a tad more expensive to set up than an IRA account that requires all investments to go through the sometimes lengthy custodian approval process, but again… find out what’s best for you.

Are there any restrictions on what I can invest in? I want to invest in real estate and make private loans. – Some SD-IRAs with larger more traditional companies like Schwab and SmithBarney put restrictions on what your account can invest in.  Some don’t allow real estate… while others do.  Just ask.

Is my retirement account eligible to “roll over” into a SD-IRA? – Not all retirement accounts can be rolled over into a self-directed IRA.  Most IRAs can be… and even some 401(k)s can be. Just ask your financial advisor and ask the representative at the SD-IRA company you’re working with.

How long will it take for my account to be up and running and have funds available for investment? – Some people wait way too long to get this process rolling. If you know you want to use your IRA to invest in real estate… get the ball rolling on getting it rolled over into a SD-IRA account asap.  Some companies may take weeks or even over a month to have your account setup complete and ready to invest.  So, don’t wait until you’ve found a great real estate deal to get started… get started today so your funds are ready to invest when you need them.

Getting Off The Sidelines And Getting Your Money Working For You

If you feel a self-directed IRA may be a great way for you to invest a portion of your retirement in things you know (rather than the unpredictable stock market)… then dive in, take some time to educate yourself on the pros and cons of a SD-IRA (those websites I put above are a great place to start. They have all kinds of resources to learn more about self-directed IRAs and how you can use them to invest in real estate).

If you have any questions on how you can work with us as an investor… just connect w/ us through our contact form or call us anytime at:  (267) 217-3157.  We offer discount investment properties in the Philadelphia Area and surrounding areas to investors like you who often buy them and keep them as rentals.  Also, for those qualified investors who want to explore private lending… contact us and we’ll talk about how we work with private lenders as well.

Happy investing!  We’re here as a resource for you so don’t hesitate to connect with us anytime.

1. Avoid Getting Traffic Tickets – First off, and probably most importantly, avoid getting tickets. Even a single speeding ticket reported to your insurance company can increase your insurance rate dramatically. Next time you get behind that wheel, just try to imagine your mother or your first grade teacher sitting in the passenger seat. That should help keep you out of trouble. If not, consider traffic school in lieu of having your ticket reported to your insurance company. As a responsible, low-risk driver you can enjoy large discounts if you manage to keep your record perfect for 3 to 5 years.

2. Maintain Good Credit – If you are currently shopping for car insurance and you have bad credit, consider cleaning it up a bit before you have insurers run your credit reports. Why is this important? According to scientific studies, good credit correlates with the lower likelihood of filing a claim. And if you have had high, out of the ordinary credit activity, postpone your insurance shopping for 4 to 6 weeks until everything returns to normal.

3. Increase Your Deductible – Did you know that by increasing your share of any incident payment, you will lower your premium? By scaling back and taking a higher risk, you can decrease your insurance rate by an astonishing 30 to 40 percent. The trick is to safely set aside some of your premium savings in case some day you do get in an accident and you need to pay that deductible.

4. Get Car Insurance Discounts – Next, let’s explore some of the other ways to discount your car insurance:

• Take a defensive driving course and you might become eligible for a discount.

• Some insurers also discount teenage drivers with good academic records (you need to provide proof) for up to 15%.

• If you carpool or use public transportation to get to work, you may qualify for a low mileage discount (again you need to show proof). The insurance agent will ask you to report your vehicle’s usage and estimate the annual mileage. If you own a car that you drive on the weekend only, you may classify it as recreational use.

• Another category of discounts includes low-risk occupation discounts. These discounts apply to certain professions like teachers, doctors and engineers. Based on statistical analysis of driving records for a wide range of occupations, including information on average time spent on the road, auto insurance companies have set some criteria for low and high risk drivers. A stay-at-home mom is also considered low risk because she is likely to have children in the car while driving and will therefore exercise caution. Conversely, night-time drivers are considered high risk. It is your responsibility to provide this information to the insurance and ask specifically if they can offer you this discount.

• Did I mention AAA? Well, belonging to certain professional organization might qualify you for lower rates. And everyone should take advantage of that. Also your employer might be able to offer a group rate, so don’t hesitate to ask about it.

5. Use One Insurance Company – Consider insuring your cars with the same company that insures your home. This can be a considerable saving, it can lower both your car insurance and your home insurance rate.

6. Stick With the Same Company – Make sure you get that “renewal” discount for staying with the same company year after year. Most insurers offer this discount because they like low risk drivers, and they want to keep them. They like getting those checks from you, especially if they didn’t have to give you anything yet. It’s a win-win.

7. Cancel Unnecessary Collision Coverage – If you drive an older car, you may consider canceling the collision coverage. It is not required by law, and if you have finished paying off the loan, not required by the lien holder either. Are you spending more on insuring your car than it is actually worth? By taking this cut you will be assuming more risk, but it may be worth it.

8. Choose a Better Car – Finally, if you are out shopping for a different car, do consider getting a low profile car, a model that either doesn’t get stolen frequently or that is less expensive to fix. The savings you get on your insurance premiums will most certainly please you, even if the way your car looks doesn’t.

The question on many people’s minds today is whether or not now is the right time to jump back into the market to buy stocks. I admit that I have been thinking about this question for the last few weeks as I watched with disbelief as the stock market rallied about 36% from the bottom formed on March 9th, 2009. Three weeks prior to this bottom, I sent an email to my readers and told them to get out of the stock market because all hell was going to break loose. Turns out that I was right for about three weeks, then the markets defied all odds and went the other way. I guess that’s what the market is supposed to do. In this article, I will give you my analysis of what happened and I will tell you about what investments I like at this time.

The Unbelievable Rally

Many well respected market analysts have expressed surprise with the Spring 2009 stock market rally. All the economic indicators were very negative and there was no fundamental reason for the markets to go up. It was supposed to be a bear market rally, or a short squeeze. I was waiting patiently for the market to turn back down before I entered additional short positions. That never happened.

What I believe happened is that our government began a coordinated effort to turn our stock market around. I never thought this would be possible, but this administration has shown that they will boldly go where no government should go. I remember clearly the day that all the financial news turned on a dime and started issuing positive spin on all the economic data. This coincided with bullish statements from Obama, Geitner, and Bernanke. All of a sudden, we were going to see the worst of the recession in the middle of 2009, and we may even see positive GDP growth by the fourth quarter of this year. On top of that, Obama became a financial advisor to the American people, and told everyone to buy stocks. At the time, I thought Obama was being a rash fool. Now I understand why I should never bet against the government.

The government has intervened in the market in ways that make most investors uncomfortable. Who wants to put their money into the market when the rules keep changing. They changed accounting rules and accounting periods, all of a sudden the banks are reporting earning gains instead of losses. How could this be possible? Then there were the stress tests. All the market and bank pros were saying how inadequate and flawed the stress tests were, yet somehow the bank stocks kept rising, even as they were told by the government that they would need to raise more capital. I guess most people thought the results were going to be worse then they ended up being, and they decided that the government really meant what they said about not letting any of the big banks fail.

The Moose Market (or The Sideways Market)

So now that the party is over, and the banks were able to issue more stocks at inflated prices, what are we in for next. Many people are forecasting a sideways market. I guess a moose attacks in a sideways manner, instead of upwards or downwards as the bull and bear do. This is the most probable event, in my opinion. We had a nice rally already, the bad news is not getting any worse, it seems that the credit markets have thawed, and the fiscal stimulus is starting to kick in. The only thing left to do is for the economy and the markets to recover.

The problem is this, where are all the jobs going to come from? We have lost over 5 million jobs so far, and the weekly unemployment numbers are still very bad. Housing prices are expected to continue their descent as a new wave of foreclosures is expected and current inventory levels are still very high. How are all of our favorite companies going to make money in this type of environment? I don’t know the answer to these questions, but I believe it will take a year or two for things to get back to positive growth. Even then, we have the real risk that Obama will increase taxes in one way or another to pay for his budget and his welfare programs, precisely when our economy will be hurt by such action. Add to this the fact that Americans are saving more and being more stingy with their money, and you get a fairly glum outlook for the foreseeable future.

One bright spot I see is that most investors have recently shown an increased appetite for risk. There have been enormous amounts of money on the sidelines, and some of it is starting to move back into the markets after seeing the recent rally. An interesting fact is that over 50% of the stock market is owned by people with over $5 million net worth, and 80% of the market is held by people with over $1 million. These people don’t really need the money to feed their family today, and they can afford to take some risk. I believe these people are who will decide the fate of the market in the near term.

The Answer to the Question

The short answer is “Yes, you should buy stocks.” The long answer is, “You should do your homework and buy stocks with a long term horizon.” The following paragraphs discuss various investment classes that I feel would be prudent buys at this time. Disclaimer: I don’t purport to give investment advice, and all of my picks should be considered as educational and informative of my thought processes. I have holdings in some of the mentioned investments and I may change my holdings at any time without notice.

Like most great investors, I am constantly striving for the highest return with the least amount of risk. With recent market uncertainty, I started looking into high dividend strategies that would take advantage of today’s relatively low market prices, yet would provide some level of positive return in case the markets went back down. I plan on writing articles covering these investments in more detail, but for now I’ll briefly mention them here for your benefit.

I have been looking into well diversified funds that hold high yield bonds, convertible bonds, and investment grade bonds. I have also been looking at royalty trusts, real estate investment trusts, and private equity funds. All these investments offer dividend yields ranging from 8% to 25%. Some of these returns are very high because the stock prices have come down so low. They are not without risk, but through careful research I have identified some that are less risky and more likely to continue paying out those high dividends.

Another area that I like right now are commodities and commodity related stocks. The previously mentioned royalty trusts usually are based on commodities and their prices and dividends are correlated to the prices of commodities. I have already bought some securities related to natural gas prices and oil prices, and I plan on buying more when the time is right. I feel that commodity prices are at or near their lows, and with emerging market growth seeming to lead the world out of the global recession, I think now is a good time to buy.

As far as emerging markets go, I currently like China and Brazil. China has spent 12 times as much to stimulate their economy as the United States have, and they appear to be stockpiling iron, copper, and oil at today’s low prices. China has been able to respond more strongly to the economic crisis due to their state run government.

Brazil is an amazing economy that has a lot of natural resources that China and the rest of the world need. From this point of view, Brazil’s market should do well as the world comes out of recession and demands more commodities to fuel growth. Also, Brazil itself is a growing nation with a lot of demand for housing and computers and all the other “necessities” of a developed country.

Another way to play the commodity card, and to position yourself for the inevitable decline of the US dollar, is to buy the currency of strong commodity nations. My top picks would be Australia and Canada. Australia was actually able to muster positive employment numbers recently, suggesting that it is coming out of the global recession ahead of its English-speaking peers. You don’t necessarily need to open a forex account to take advantage of this. I believe there are currency ETFs that could be used to place these bets, or you could do some homework and pick some Australian, Brazilian, and Canadian stocks that trade on our stock exchanges.

Last, but not least, I believe this would be a good time to buy some of the best stocks at a discount. The next few months will probably be one of the best times to buy the stocks of great companies at low prices. I know that many of them already rallied, and that there still may be another pull back in the near future, but for long term investors, there are some great values out there waiting for your money. We may not see positive earnings growth for another two or three quarters, but the stock market is a forward looking mechanism and many savvy investors have already placed their bets with this knowledge. This is the age of the stock picker.

What do You Think?

I am always interested in what people think about the markets and I encourage you to post your questions and comments right here on this website. Just type something in the comment box. There is no need to register or sign up for anything.

Understanding the basics of car insurance coverage will help you get the lowest car insurance policy possible. The specific type of car insurance you need is determined by your state law and by what your lender, or lien holder, requires of you. This article covers the three basic types of auto insurance coverage available.

Liability– This is the minimum type of coverage required by most states. It will cover you for the damage you cause to others, including physical bodily damage as well as property damage. What it doesn’t cover is the damage to your person or your vehicle. The insurance policy will list three numbers. For example, 30/40/10 will insure in $30,000 bodily damage for one person, $40,000 total for bodily damage per accident for more than one person, and $10,000 for property damage for one accident. This is just an example, and different states have different minimum amounts required.

Collision– This type of coverage will pay to repair or replace your own vehicle. In case of an accident, the car insurance company will have to determine the cost of repairing your vehicle versus the cost of replacing it. If your vehicle has been heavily damaged or deemed totaled, the insurers will pay out a check in the amount of the ACV (meaning actual cash value), which is supposed to replace your vehicle. This amount is close to the trade-in value of the vehicle, but it may not be. It is usually calculated by using comparisons of other vehicles in similar condition, taking into consideration additional factors like mileage and equipment. Most insurance companies use third party software containing database information from dealers and auto repair shops to assist them in determining the value. If you disagree with this value, there are some things you can do. Read more about it in the article titled “Calculationg the Actual Cash Value of a Car.” This coverage is not required by law, but it is required by lien holders in most cases.

Comprehensive– This type of coverage will pay for damages other than the ones related to a collision, including nature caused damages due to fire and flood, damages caused by animals, and losses due to theft. The coverage is dictated by individual policies. Most insurers will pay out up to the value of the car before the incident, minus your deductible. Although it is not required by state to carry a comprehensive policy, if you have a loan or a lease, the lien holder will require you to carry comprehensive insurance.

We hope that you found this article useful and we encourage you to leave your questions and comments below.

The length of your cover depends on your circumstances. You need to consider factors like your family set up, personal loans, mortgages, credit cards, and other borrowings that may need to be paid off when the inevitable occurs.
A rule of the thumb could be that if you have say a mortgage that spans more than 20 years, you may want to take out a life insurance policy for 20 years or longer, with the assumption that in case you die during the term, then your policy would at least pay out enough to repay your debts.
If you have dependants, you may decide to take up a policy that covers up to the most likely period when they would become independent. E.g. when your child is most likely to start working.

How much should I cover for?

This is a very important decision that you need to make, as your premium will be based on the value of your policy. You should consider your gross debt profile, i.e. what needs to be repaid when you die.
You should also critically work out a budget that your immediate dependants would need to maintain on an annual basis.
You may also check with your employer if any benefits exist that cover death in service, as your dependants may already be entitled to this. Life insurance is less expensive for younger people than older ones and it may become more expensive as you grow older.
Some providers also offer you the ability to lock in your premium for the length of the term. The older you are when you take up a policy, the more expensive your premium will be.

Typically, what is the cost of a life insurance policy?

There are several factors that determine how much premium you will pay to get the right cover you need. Typically insurance providers consider your level of risk by taking into account, your age, job and occupation, the level of risk you are exposed to at work, health history and status etc.
For example, your premium is lower if you are healthy and active compared to if you had a recent health issue, or suffered from serious illness at any point in time.
Some of these factors vary from one provider to the other, but please be as honest as you can when completing the eligibility questions.

What do I do if my circumstances change?

It is advisable to contact your insurance provider immediately if your circumstances changes at any point in time. For example, if you give up smoking, it may reduce the premium you pay or if you have recently been diagnosed of a terminal illness, you will need to inform your providers in order to ensure your policy is intact.
Your policy may be terminated if the information you provide is inaccurate or misleading and it is your responsibility to communicate any changes per time.
Be truthful and honest with your answers
Provide accurate, honest and clear answers to the questions, and when providers request for additional information, please do provide honest answers.
Your policy may be terminated or invalidated if the information you provide is inaccurate or misleading, and the pay-out may not be effected when you die.

What type should I opt for; Joint or Single life insurance policy?

Joint policy is tailored for couples that want to hold one life policy. The downside however is joint policy only pays out on the death of one party, while the other party is left without life cover.
Joint policy is not necessarily cheaper compared to single policy. You may be better off buying 2 single insurance policies, which comes with more flexibility (different length of cover, different terms, different sum insured) etc.
It in effect means you’ll even get more cover, as when one party dies the other party can still be covered under the single policy.

What are the other types of cover that compliment life insurance?

Critical illness cover: This can be added with a standard life insurance cover that can be helpful in case of critical illness. It provides additional cover that pays out to cover mortgage payments and household bills if you lose your income due to the diagnosis of a critical illness.
Over 50s: This cover can also compliment your standard life insurance policy. It offers smaller pay-outs to cover funeral expenses, burial costs etc. The premium amount you pay is often guaranteed for life. Anyone over the age of 50 is eligible to apply without verifying or checking your medical records.

We will discuss some tips to help you start budgeting, but first let’s define what a budget is.

What is a Budget?

A budget is a plan that helps you control your spending. It’s a system that allows you to work out your monthly budget and stay on track so that you’re not exceeding your planned spending limit.

A budget is not just about numbers – it also helps people see where their financial priorities are, what they value in life, and how much debt or savings they want to have.

Here are some budgeting tips for getting started:

Method #1: Create a budget at the beginning of each month

You should always create a budget at the beginning of the month. This budget should include your fixed and variable expenses from the month before – this will make budgeting easier.

To help you budget, find out how much money is left over after covering all of your necessary costs, including living costs such as food and rent. Divide that by a number to work out what percentage it makes up (in other words, how much you have left over to budget with).

This budget should be reviewed and updated at the end of every month. This will help identify any changes in your expenses that need to be made, such as when you get a new car or increase your rent.

The budget can be a little more complicated than it seems at first. There are many budgeting methods that you can use, and budgeting software to help you stay on track with your money. Here are some of the budget types:

– Straightforward Budget – this is when income minus expenses equals zero or surplus (i.e., budget equals zero).

– Balanced Budget – this is when income minus expenses equals a surplus. This budget can be achieved by using money from assets, such as investments or savings for emergencies. It helps you to create an emergency fund that will cover unexpected costs and reduce the risk of high levels of debt.

– Spending limit budget – this budget sets a budget limit for each item of expenditure, such as $100 per month on groceries.

– Percentage budget – this budget calculates your income by the percentage it takes to cover all expenses and tells you how much is left over in the monthly budget when there are no fixed or variable costs. It can be helpful if you have irregular incomes, like if you’re self-employed.

Many budgeting tools are available to help people create and manage their budget, including budgeting apps or sites such as Mint or You Need a Budget (YNAB). These can be helpful for recording your spending habits in detail so that you know where your money is going.

Method #2: Set up an automatic transfer to save money from your paycheck

Budgets can help you save money for the future. If you want to invest automatically, you should set up automatic transfers into your savings account. This approach is very useful for people who have difficulty with avoiding spending, and it also makes saving more automatic.

For example, if you want to save $200 a month automatically from your paycheck into savings. You would do this by setting up an electronic funds transfer (EFT) of $200 per month in your payroll account at the beginning of each month.

Method #3: Use cash instead of credit cards for purchases

Avoiding debt is just as important as saving money. Using cash instead of credit cards is a good way to get started. When you use a credit card, it’s easy to be tempted by the next big purchase. If budgeting is your goal, then paying cash for everything will help lead you there!

–  The average American carries $15k in debt and at 18% interest rates that could grow into over $50k of extra money spent on loans each year.

–  Credit cards also have a higher APR than most personal loans, making it more difficult to budget and pay off debt quickly.

Method #4. Start Tracking Your Spending

Once you have a budget and savings plan, you need to track your spending.

One of the easiest ways to do this is with a budgeting app like Mint.

A budgeting app lets you track your income and expenses to see how much money you have left over, which helps when budgeting. It also provides helpful graphs that allow you to see what may be adding up in terms of costs or savings.

Mint is budgeting app that can automatically categorize your income and expenses, but you don’t have to use it if you’re already budgeting manually.

There are also other budgeting apps like YNAB, or You Need A Budget which would be a good alternative for people who prefer their budget on the go with an app.

Conclusion

Now that you have a budgeting game plan, it’s time to put it into action.

The best budgeting methods are the ones that you find work for your life.

Whatever budgeting style works for you, make sure to stick with it and never give up!

Ways To Play Private Equity Generally, there are three ways to get into the private equity market: 1) invest in seed stage or early stage companies as an individual angel; 2) invest in early stage companies as part of either a formal or informal syndicate with other angels/early stage venture capitalists; 3) invest as a limited partner in a venture capital fund that will then invest in several early stage or growth stage companies. There are distinct differences between these three strategies. The first mode, investing as an angel, is a solo activity. It’s up to you to identify the opportunity, negotiate the terms of the investment and bear the entire amount of the investment. Since angel investments are usually made very early in the company life cycle, the associated risk is very high. That is, most angel investments don’t pay off, but the rewards can be huge. The second mode, investing as part of an early stage syndicate, is a group activity. No particular investor is in charge and democracy is usually the rule of thumb. Using syndicates allows an individual investor to take a smaller piece of a larger number of companies, but it also carries with it loss of control and oversight over the investments. Syndicates can also be a great source of deal flow and a ready advisory panel that can be a sanity check to the investments. The third mode, investing as a limited partner in a venture capital fund, is completely hands off. The investor is investing in the vision and/or track record of the venture capitalist and will depend on the venture capitalist to make and manage all investment decisions. It’s crucial that you match your investment goals with VCs sharing similar goals. For example, an investor that wants to maximize exposure to nanotech and its commercialization wouldn’t want to invest with a generalist VC or a VC focused on Web 2.0, SaaS or cloud computing sectors. The next part of this series will explore the various stages in a private company’s life cycle and the related forms of investment a company will hope to receive at each relevant stage. In particular, I’ll examine the differences between seed stage, early stage and growth stage and what types of money is being invested during each phase. Parts three, four and five will take a closer look at the three modes of investment discussed above, angel investing, syndicate investing and venture capital investing, and each will look in detail at the important characteristics of the mode, including typical legal and business terms.