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Vanity

basic investing

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so i've gotten a lil money in my pocket lately and am looking to have it work for me a bit... here's what i've learned in my reading.

 

-All the money you have is constantly becoming worth less. Very minutely less, but less nonetheless due to inflation (more money being put into the finite pool of money)

 

- the way to make money is to invest in something that is higher than the rate of inflation

 

BANKING:

 

There are a few different accounts:

 

-checking: typically has no, or very small interest rate, so the money in here is being hit hardest by inflation; but there is rarely a minimum balance, so it's fine for cash on hand

 

-savings: there is ussually a minimum balance, but the interest rate is higher. However, it is ussually still less than the rate of inflation.

 

-there are variations on savings, but for the most part, they are like a money market account. The interest rates are higher, but so is the minimum balance. So where you only may need to keep $200 in your savings account making 1% interest, you may need to keep $5000 in your money market account making 3% interest.

 

Banks make there money off of (among other things) fees ton your account. This can range from a small monthly or annual fees on the checks you write to insurance, etc. So knowing what fees will be assessed may offset anything made off of interest.

 

-you can purchase a Certificate of Deposit (CD) from a bank. A CD is basically an federally insured deposit. You will get a higher interest rate (I think 4% is considered good right now), but you will be unable to access that money for the duration of the CD (not without heavy penalization anyway). A CD can range from a few months to many years. A common practice to keep a liquid cashflow, but still enjoy the good interest rates of a CD is CD Laddering.

 

-CD laddering is purchasing a CD every few months or so, so once they start cashing out, you have access to the cashflow while still having your money work for you.

 

-As interest rates go up, a CD isn't as good of an investment because it is static.

 

That's it for now.. I'm tired. I'm no expert or business major or anything.. so feel free to correct me if I'm wrong. Hope i could help.. vanity

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Originally posted by THANKYOU@Nov 8 2005, 01:43 AM

invest in your future. as in, lotto tickets.

 

 

aren't you talking about midget porn?

 

the future is here!

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If you have enough, put it into government issued bonds. That way, you collect a lot more interest then putting it into a checking account.

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holy crap.....

 

 

 

...most of us are trying to make ends meet these days......like i have tyime to think about stocks, bonds and trading techniques.....dude, i have enough problems looking for work and keeping my stomach full

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I have a family friend that is showing me how to invest in HUD properties. She is telling me that she buys 2 houses a year for around $40,000 each with something like $2000 down. When you are an investor you have to hold onto the property for 2 years before you can sell it. If you buy the home to live in it you only have to live in it for one year before selling. She rents the houses out for 2 years and then flips them. I think she said she makes around 20,000 apiece on them. I will drop more info when i get better details on how it all really works.

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yuck... yeah, my parents do the same thing.

 

except here, you have to live in it for 2 years.... you get breaks after 1 year too, but not as significant

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Originally posted by THANKYOU@Nov 8 2005, 12:43 AM

invest in your future. as in, lotto tickets.

 

 

i won 25 bucks of a dollar lottery ticket a few nights ago!

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