Wednesday, March 10, 2010


Almost anything can be an investment. You might be investing in coins, stocks, bonds, antiques, baseball cards or, in frozen orange juice. Every investment has unique information that you will need in order to make a profit. You will need to do research on the nuances of your particular investment. For example, if you invest in coins than you must understand the grading system used to determine a coins value. If you invest in orange juice than you will need to know the current and future weather conditions in a state like Florida? If you invest in porcelain figurines than you will need to know the affects crazing (cracks in the glaze) has on the porcelains value.

Although each investor must become educated in the minute details of evaluating any given item, there are a few basic tips that I have learned (sometimes from being burned) over the years.

Before you make any investments, you must first do research on the item(s) you wish to purchase and resell later on for a profit. This entails finding out in advance what the item might sell for in the future and where you would be able to sell the item (internet, wholesale to merchants etc). The internet, newspapers and even retail stores should give you information on the potential value of your item today and by looking back at past prices and comparing them to current prices you might get some indication as to how long you will need to hold your item(s) before you can make a profit.

The greatest mistake most people make when investing is that they pay too much for their items. This would include paying too much for the basic item, for fees to purchase the item and, for commissions/markups. You will often hear stock market investors say that the company is a good investment but the price for the stock is too high. The same can be said of paying too much for other investments like collectables, real estate or, even U.S. Treasury Bonds. To really increase your return on your investments you should find out what the going price is and try to pay less than that.

You should watch out for items that are offered at much less than the average price. Many collectable items offered at low prices are often either flawed or counterfeit. Real estate may have some hidden problems like a leaky basement, a right of way, unsettled title etc. In short, don’t pay too much for your investments however, if it is offered at prices far below the current market, make sure you find out why the item is so cheap. That said; don’t be afraid to look at investments that appear to be really cheap. Sometimes you might get lucky and buy something cheap because the seller either does not know the true value or, doesn’t care what the value is and just wants to get rid of the item as is often the case in estate sales and with people who need to raise cash quickly.

I have another tip to give to investors. Please make sure that you do research to find out any potential legal issues that might crop up regarding your investment. For example: current and potential changes in local zoning ordinances may affect the amount of money you make on your investment. New zoning could put restrictions on your real estate which will make you property harder to sell in the future. On the other hand, you could benefit from a change in zoning. Many real estate investors will make out a purchase agreement on a property with the stipulation that for the sale to go through, the zoning must be changed. Once the new zoning is approved then the sale can be consummated.

Other legal problems might involve potential tax changes. The taxation of dividends, how depreciation is handled and, sales taxes are all examples of things you should look out for before you make an investment.

I have given you just a few tips to save money on your investments. They basically boil down to two basic rules: Do your research and don’t pay too much. Many people will prefer to hire someone else to handle their investments. If you do want to hire someone you must still do research. You need to know about the person you are hiring and also his company. In short, you need to do a background check to find out that the person and company you are dealing with is honest and also that they have a good track record at making money for their clients.

Finally, no matter what you invest in or how you invest, you must keep track of your investments. Unless you are a stock or commodities trader, you should not check on your investments every few minutes. However, you should evaluate your investments at least once each year to make sure that you will reach your investment goals.

Wednesday, March 3, 2010


Insurance is one of the least fun things to talk about in any discussion about saving money. However, it should be viewed as no less a way to save money than buying needed items cheaply or purchasing a rare coin on EBay at 10% of the coins' real worth. In fact, I enjoy saving money by finding cheaper insurance policies or, changing my current policy to better reflect my risk tolerance.

Most people have insurance on their home, auto, life and, health. You might also have insurance on a boat, jewelry, collectibles or, some other item or items. Insurance can be any number of items but, in order to save on insurance you must first realize what insurance actually represents. Most people buy insurance but, don't really know what they are doing. Insurance is a specific financial tool that exists to keep an individual from having a catastrophic financial loss. A catastrophic loss is different for different people. Someone making $20,000 per year might find that $1,000 is a catastrophic loss whereas, someone making $2,000,000 might find they do not suffer a catastrophic loss until the amount of the loss is at least $100,000. In short, what you make depends on the amount of insurance you buy, in most cases.

Insurance codes and licencing are generally divided up into three major areas: health insurance,life insurance and property casualty insurance. Having run a general agency back in the 1980's (I had a company that hired and trained people to sell for various insurance companies), I have gleaned some ideas in how to purchase policies. I also have personal experience from purchasing most of my current insurances online.

First of all, your insurances can be easily compared and bought online, over the telephone or in person. No matter how you purchase your policy, you must make sure the company you are dealing with is legitimate. I like to search the web several times for a particular insurer. Make sure the same website comes up each time you do a search. Fraudsters on the web will often overlay their website over a legitimate site in order to get you to give out harmful personal information.

A second problem with buying insurance online is that you must make sure the carrier and the policy you are buying is o.k. for the state you reside in. Every state has it's own insurance laws and lists of carriers it approves to do business in the state.

Buying the cheapest insurance  does not mean you are getting the best policy for your money. The flip side is that paying the highest price for your insurance does not mean you are getting the best coverage for your price either. I like to select a company based upon recommendations from people who actually had a claim. I bought a low cost personal health insurance policy from a company that was highly recommended by a friend of mine that needed open heart surgery when she was in her mid 40's.

Purchasing insurance online can be great for comparing policies. Internet insurance brokers will often have several companies you can directly compare in terms of price and coverage. When dealing directly with an independent insurance agent you will find that they will often try to sell you the policy that pays them the highest commission. When dealing with salesmen for anything it is good to always play the game of being poor and cheap. The salesman will then finally get to better policies in terms of coverage and price in order to get a sale. Remember, no matter what type of insurance you buy,  many times 20-50% of the first years premium goes to pay for commissions.

Insurance companies offer a huge variety of policies that vary greatly in what they cover. However, the bottom line to saving on insurance is the deductible. Legitimate companies that have cut out some corporate costs and pay lower commissions might save you some dollars. But, the bottom line to saving money on your insurance is the amount you are ready to accept as a loss. The amount of your deductible is not just a function of pain but, a function of what you can afford. For example: if you have no health insurance but, have assets you could lose if you get sick then, a $2,000 deductible policy is better than no policy at all.

In summary, you need to decide your tolerance for loss before you start looking for an insurance policy. Most of your savings on a policy will be determined by the amount of commission paid to agents and more importantly, your deductible.


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