Determining Where You Will Invest

There are several different types of investments, and there are many factors in determining where you should invest your funds.

Of course, determining where you will invest begins with researching the various available types of investments, determining your risk tolerance, and determining your investment style – along with your financial goals.

If you were going to purchase a new car, you would do quite a bit of research before making a final decision and a purchase. You would never consider purchasing a car that you had not fully looked over and taken for a test drive. Investing works much the same way.

You will of course learn as much about the investment as possible, and you would want to see how past investors have done as well. It’s common sense!

Learning about the stock market and investments takes a lot of time… but it is time well spent. There are numerous books and websites on the topic, and you can even take college level courses on the topic – which is what stock brokers do. With access to the Internet, you can actually play the stock market – with fake money – to get a feel for how it works.

You can make pretend investments, and see how they do. Do a search with any search engine for ‘Stock Market Games’ or ‘Stock Market Simulations.’ This is a great way to start learning about investing in the stock market.

Other types of investments – outside of the stock market – do not have simulators. You must learn about those types of investments the hard way – by reading.

As a potential investor, you should read anything you can get your hands on about investing…but start with the beginning investment books and websites first. Otherwise, you will quickly find that you are lost.

Finally, speak with a financial planner. Tell them your goals, and ask them for their suggestions – this is what they do! A good financial planner can easily help you determine where to invest your funds, and help you set up a plan to reach all of your financial goals. Many will even teach you about investing along the way – make sure you pay attention to what they are telling you!

HOW TO MAKE $20.00 FOR EVERY $1.00 INVESTED

It has been said you can lift the Rock of Gibraltar if you have a fulcrum point and long enough lever. When we refer to "financial leverage" we are talking about the same principle. If you buy a business building for $100,000 with $5,000 down, this is using leverage of 20 to 1. For a mere 1/20th of the purchase price, you actually own and control property that is 20 times more valuable than your cash investment.

If the income of the building is only sufficient to make the payments and expenses and you don't gain any cash flow, you are still getting the building paid for and perhaps in 5 years or so,with continuing inflation, you can sell the building for$200,000... a gain of $95,000 on a $5,000 investment. This is the potential result of proper use of leverage.

A good rule to follow in applying leverage, relevant to any business venture for that matter, is always provide a reserve.Hold back some cash for emergencies. Hold back additional capital so if you go under you will have a nest egg to start a new venture.

Sometimes when things go sour and there is no way out it is better to take the least loss possible, save what you can and getout...NOW! Use the remainder to again find financing, marginleases, mortgages, franchises and all the other manners of using money belonging to others for both their profits and yours.

Selling your property for cash then leasing back on a long term lease is an other form of leverage. If you sell for one million dollars cash and lease back at $10,000 per month, you have generated tremendous leverage. You now have $1,000,000 each with10% down for each property, you now control 10 millions dollars worth of income producing properties. Sometimes it is possible touse options to hold property, with very little cash down, untilyou can obtain title and take possession. This can produce fantastic leverage if planned property.

Going public is an other method used to gain leverage by usingother people's money. You receive money from the public forshares of your corporate stock and at the same time establish a market value for your unissued stock.

Before you apply leverage on any proposition, be sure know just what your are doing. There must be a continuous favorable cashflow to service your debt, pay all your costs and expenses andgive you a reasonable profit. If weakness occurs in any one or several of your business entities, it could drag down your entire organization.

2. IN FRANCHISES

Franchising your business operation packet is another form of leverage. You are selling others your know-how and the right to use your system and/or product for a price, either a share of the profits, a bulk payment or a combination of both.

It is not as simple as it used to be to become a franchiser, due to controls and red tape established by the various state and governmental agencies. In some states it is just about impossible for the layman to proceed to wade through all the red tape required to satisfy the laws. However, if it were easy to do, it probably would not be profitable anyway.
When you have met all the requirements of the various agencies,you will have an operating manual and pro-forma accounting statement...You will have developed a turn-key package for your franchise offering.
To get started right get revised statutes of the state from theSecretary of State and study the requirements for establishing and selling franchises.