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Archive for January, 2010

How To Build Wealth By Using Your Talents

January 4th, 2010 No comments

If someone were to ask you how to build wealth, you could probably think of numerous ways to achieve this, but the simplest way is by simply making full use of your talents.
Sure you can make money through property and stocks, but not everyone has the skills needed to successfully invest in these areas, plus they both require you to have a decent amount of money to invest in the first place.
The route most people go down from a very early age, is obviously education and learning new skills in school, college and/or university. These acquired skills and qualifications then usually lead on to a decent job and a structured career.
That’s all great but it’s very difficult to achieve true financial freedom, and really build wealth working as an employee for someone else. All your efforts are going into creating wealth for the business you are working for, and you are simply a small piece of the jigsaw helping your company achieve that goal.
If you really want to build wealth, then the best way of doing this is through working for yourself and building up your own successful business so every hour you spend working is spent on building your wealth and prosperity. This is how so many of the world’s richest people started out, and how they made their vast fortunes.
It’s not as difficult as it sounds. The key is to use your talents. I can already hear people saying ‘…but I don’t have any talents’, but the truth is everyone has talents and if you don’t know what yours are, you simply haven’t discovered them yet.
The key to building wealth is sitting down, making a list of your talents, thinking about how you can best harness these talents to build a business, and putting this plan into action.
This is basically how I built my own fortune. I couldn’t get a job after leaving university, but having a degree in Accounting and Finance I knew what kinds of subjects I was most adept at, and indeed I ended up becoming a successful FTSE trader on the betting exchanges, after starting out with a very small sum of money. This then led on to me becoming a profitable trader of the forex and stock markets.
So if I can do it, anyone can. You just need to list your talents and find a way of using these talents to build wealth, because there’s nothing more rewarding than making a very good living from doing something you love, plus you get the freedom and empowerment of being your own boss and controlling your own destiny.

It’s the Economy, Stupid

January 3rd, 2010 No comments

The US economy is once again centre stage for all the wrong reasons, and people are increasingly speculating about the odds of the US dipping into negative growth, in other words… a recession.

Various media and financial commentators are pitching their estimates for the probability of a recession. Even former Fed chairman Alan Greenspan has put the odds as being between a third and a half. However, the emphasis so far has been on slower growth rather than negative output.

Sentiment is increasingly focused on the actions of the Federal Reserve or more accurately, the market’s confidence in Fed Chairman Ben Bernake. Last week the minutes from their last meeting revealed they were reluctant to cut rates in the face of rising inflation. However, fed futures are currently pricing in a 65% chance of a cut in the December meeting. Many analysts believe that the Fed may soon have no choice but to act.

Over in the UK, MPC meeting minutes revealed that members had voted 7-2 in favour of keeping rates on hold, as expected. The chances of a rate cut in December increased on Friday, as Deputy Governor Rachel Lomax went on record as saying that the bank needed to be “very alert to the risk that the economy may be slowing too abruptly. At current interest rate levels, monetary policy may well be on the restrictive side”. Despite this, a ‘no change’ verdict is still the most likely option at the December meeting.

The Eurozone credit markets saw widening spreads between German Bunds and bonds from countries such as Italy and Greece. This flight to quality occurred as credit market liquidity once again froze on Thursday, with the US markets being closed for Thanksgiving.

The Euro saw dramatic movements at end the week. The EUR/ USD exchange rate came within 32 pips of 1.50, but slumped dramatically to just above 1.48 in later trading. Talk of ECB action to counter the effect of a strong Euro was behind some of the fall.

Next week is dominated by housing sales data, with UK house prices released on Monday, US existing home sales on Wednesday and New home sales on Thursday. With much of the bad news already in the market, it will be a case of how bad the news actually is that governs reactions to this data next week. Other first tier announcements include US consumer confidence GDP figures.

Before Friday’s recovery, November was looking at being one of the worst months on record for the FTSE. This November in particular has been the worse since 2000 for the S&P 500, and at the time of writing was showing the fifth worse intra month decline of all Novembers on record. After such large moves, it is not uncommon for the market’s spring to recoil.

The recent volatility has pushed up the premiums available with trades betting against further large movements. This presents a potential opportunity. After such large moves in November, the S&P 500 has a tendency to be positive in December, although the movements are extremely choppy. Between now and the New Year, there is the distinct possibility that markets could grind rather than crunch, making a barrier range trade seem attractive. It’s the economy, stupid but the stock market may just be able to stave off the feared all out collapse until 2008.

A barrier range trade on the S&P 500 with the expiry set as the 3rd of January 08 and the barriers set as 1233 and 1628, returns 12%. This provides roughly 200 points protection either side of the current market levels. This represents the maximum range allowable by BOM for the time period. This puts the barriers well beyond the highs and lows for the year.

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Why Invest in Property?

January 3rd, 2010 No comments

Introduction
Interest rates for savers generally follow inflation trends and statistics show that these gains are always positive unless you are very unlucky. The reason why so many people invest in Banks is because they are usually a safe bet. Indeed, often your savings will be guaranteed.
Money in a savings account is usually a safe investment but the return can sometimes be limited for the investor when compared to other options.
There are many opportunities for investment depending on the level of risk an individual is prepared to take. These forms of investment might include stocks and shares, endowment insurance policies, pensions etc. We are focusing our attention on the property market where our expertise is. Stability of Property Values
In real terms although property markets do suffer from peaks and troughs, property does increase in value in the long term. Recently in some areas, property prices have actually gone down, this is due to the economy which has an effect on supply and demand. An over supply of property can easily reduce property prices when the property market is struggling.
Property prices do go down but history has shown that they always recover and they are stable in the long term. Steady or significant increases in property prices are usually the norm.
Whilst there can be no guarantee that property prices will increase over say, a one year period it is generally accepted that a well maintained property in a reasonable area will appreciate in value.Interesting Statistics
The following statistics make interesting reading: