Are you drowned in debt? Taking out a second mortgage once meant you were in financial trouble. Today, people take out home equity loans, which is another name for a second mortgage, to pay for everything from home renovations, weddings, and other loans. Although some people consider it as a smart way to borrow money, this type of loan can be hazardous to your finances. Equity is the amount left over after you subtract your home loan from what your house is worth. People think this type of

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I remembered before that I chatted with a foreign exchange (forex) trader when I was thinking to try foreign exchange trading online as one of investing. And I asked him: “What Makes Currency Rise or Fall?” In our discussion through Yahoo Messenger, he stated that currency trading is more stable than the stock market. He said that ‘currency trading is a balancing act between a particular currency against a basket of other currencies.’   If one currency fall, then

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The Rule of 72 is a formula used in finance particularly in investments. This is a general rule that answers the question: ”How many years will it take to double your money?” You don’t have to make difficult calculations as this rule makes it easy for you to calculate. Depending on the given rate of interest, you can probably evaluate it mentally in your head. Let’s see the following examples to determine how it works:   In how many years can you double your money

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What makes rich gets richer? We notice that the rich keeps on getting richer while some of the poor gets poorer. Kiyosaki continued his teachings on his “Rich Dad Guide to Investing”. If you are not familiar, there’s this one rule originated by the Italian Economist Vilfredo Pareto in 1897 called “Pareto’s Principle or 80/20 Rule” also known as the Principle of Least Effort. In business, we can apply it and we can say: put most of our efforts on the 20% of things that bring in 80%

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As I mentioned in my previous article on return on investments, we will now tackle the power of compound interest. You will see how powerful compound interest is as it is one of your allies in achieving financial freedom. Let’s see how compound interest works by comparing simple interest vs. compound interest. You will see that it is really advantageous that you should really leave your money UNTOUCHED in the bank.   SCENARIO 1: Suppose you were able to save your first 100,000 at the age

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We already have a glimpse on the three considerations before we invest. That is, risk, liquidity and return. In this article, we now tackle the last one, which is the very basic reason why we invest and that is return on investment or simply return. When assessing an investment, you would like to find out if it will earn enough to recover your initial capital investment whether be it invested in stocks, real estate, or in a business.   In finance, investing in a business requires a study of

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A lot of us are worried in the global financial crisis that we are all facing. Companies are cutting down their costs. Unemployment rate rises. Economies are entering recession. Many are left homeless and are doing their best to make ends meet. While this scenario may be a disadvantage for a lot of us, this crisis poses an advantage and a great opportunity for the so-called “VULTURE FUNDS“. It’s a great time to hunt for their food. But what exactly are vulture funds in the

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We are now living in one of the worst global financial crisis. This is proven by the fact that a lot of economies are going into recession and trillions of stock values were wiped out. Aside from these, a lot of companies have reduced their earnings with a lot of plant closures and job lay offs. We often hear the word recession. We’ve watched news that Singapore, Germany, Japan, and New Zealand officially declared recession in their economies. But what is recession? And what caused

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One of the things that kept me thinking before when I was starting as an investor is the Federal Rate. Why is it so important? Why do the whole world of investors look at it too much? And how powerful is Ben Bernanke to control and manipulate it? We can see that a lot of times, if there was a federal rate cut, stocks will go up and rally. What’s in the federal rate cut that makes stock investors happy? And why is the Fed now continuously cuts it reaching record breaking lows of just

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Ok, as I have mentioned earlier, you need to invest to fight inflation. But before you invest, you need to evaluate your investment to which you will put your hard earned money. You need some investment valuation. And this can be done by evaluating three important concepts: RETURN, RISK and LIQUIDITY. RETURN is simply the efficiency of your investment and it’s time-bounded. In finance, this is more commonly known as ROI or Return of Investment. You hear the common terms ‘ROI in 1

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We all have been hearing this famous saying that “Time is Gold”. Yes, Time is Money. In the office, when you were late, you will be deducted a portion of your salary. Time is Money. In business, especially if you have perishable inventories such as foods that can easily rot, you have to sell it quick or otherwise it will be a loss. Time is Money. In real estate investment, you need to wait for time for your investment to appreciate its value. Again, time is money. But in

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