Money Management is a primary concern for most people as they begin to think about the future. The thought wasn’t always there in the past regarding your retirement or even your next paycheck. With major corporations disappearing not only with your job but also with your pension, more people are concerned and should be.
There are many means of money management available. You can put all your extra cash in your pillow, you can put it in a box under the floorboards, you might even want to put it in a bank. If you put it in a bank, are you going to put it in a savings account, your checking account, a CD (certificate of deposit) or maybe a money market account? You might want to set up a brokerage account and trade stocks or have a managed fund account.
One of the best means of long-term money management is Real Estate investing. With Real Estate on a constant increase in value, a lot of experts agree that this is one of the best investment strategies. Within the Real Estate investment opportunities, there is an assortment of investment strategies. There are short term strategies such as flipping properties and long term strategies such as buying to rent and selling in 20-30 years to fund your retirement. I’ve heard of a couple that had 3 children and they heard that buying investment properties was a good way to be prepared for their children’s college fund. So they purchased 3 properties with nice homes on them. They took care of the properties for years without consideration of occupying them with renters during this time. Their entire intent was to resell at the time their children were going to college and using the proceeds to pay for their college education.
Before you start to invest, educate yourself. Investments in Real Estate can be costly. You do not want to throw your money away because of ignorance of prudent Real Estate investing decisions. Figure out what your investing goals are and what methods of investing will help you achieve these goals. Do you need to create short term income with your investing strategies or can all of your profits be considered long term. Can you put more into your investment or is it a one time lump investment. How much risk can you stand? Do you need strategies that are less risky. Are your funds limited and maybe you might be interested in investing in Real Estate Investment Trusts (REIT) through the stock market instead?
If you want ownership of the property and your funds are limited, you can look for deals with foreclosure properties. Sometimes you would have to put some work into a property so you need to be prepared. Make sure you can do the work yourself or you have someone that you can go to and you have a reasonable idea of the costs involved.
One of the investment strategies you may not hear of much but nevertheless it is a big investment strategy, is Tax Lien Investments. Basically, when taxes are not paid on a property, the county would assess a tax lien on that property. The Tax Lien is then put up for sale by the county. If you bid on the lien and are awarded the lien, then you would pay the county the amount of tax that is due. The property owner would then have to pay the back tax plus a penalty. This entire amount is then paid to you. Each state sets up the what the amount of the penalty is. In some states, it is 14%. In others, it is 25%. This figure varies from state to state. If the property owner doesn’t pay the back taxes and the penalties after 3 years, you can foreclose on the property. Tax Liens take precedence over most other liens.
Michael Russell Your Independent guide to Money Management
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