After months of debates and meetings to consider raising the debt ceiling, politicians (both Republicans and Democrats) waited until the last day to actually write the bill and vote on it. Even after all the compromising and dealing that went on, the bill is nothing more than allowing the federal government to spend more money than it has in the past.
Standard and Poors released a report Friday night announcing the downgrade of the United States credit rating from “AAA” to AA+” with a negative outlook. What bothers me more is the “negative outlook” comment than the loss of triple “A” rating status. Never in the history of the united States has the credit rating of the country was anything but triple “A” but to say that you (S&P) expect more negative issues to occur later on down the road. This morning S&P downgraded Fannie Mae and Freddie Mac as well as urging Washington to get their act together now or another possible downgrade can happen within the next two years. Washington’s demonstration of lack of solid reform ideas and true leadership skills to do what is necessary, has shown the world not to have confidence in the United States

So where can you invest your capitol so you don’t take a beating any more than you already have during the past four years? That is up to you. I can only suggest investments strategies or ideas that I believe to be the right choice. I’ve talked about this day coming for about ten months and how I’ve protected myself against this economic correction. I know there are quite a few of you readers out there took some of my advice and you’re happy you did. Especially since I’ve been talking about owning gold, silver and other precious metals to hedge against the loss of value in the dollar as well as equities on Wall Street. Gold has hit it’s all time high of $1,728.37 while silver held within it’s usual price range of $38-$40. While precious metals have climbed a great deal over the last year, analysts feel that gold isn’t done making new highs. Some feel this is the time where silver is going to gain traction to fall more in line with gold prices. Traditionally silver-to-gold prices have been a 16-to-1 ratio. With that in mind, silver should be trading at $108 per ounce.

I don’t expect anything good for to really happen to take us out of this recession for at least a year. As it is, Congress is on their five week vacation and Obama is still blaming others while trying to say that tax reform and medicare reform are the answer to economic prosperity. Until the federal government gets out of the way and lets the free market to do what should have happened in 2007-2009, before the bank and auto bailouts, we will continue on this path of no growth.

So invest wisely and tread lightly.

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Today, Wednesday, gold continued it’s climb on making a new high. today’s gold price is $1663.09 I expect it to continue to gain momentum over the remaining part of 2011 and quite possibly all the way to the elections.

Throughout the rest of this week, economic reports will be released and I wouldn’t expect anything good out of any of them. Initial claims, non-farm payroll, unemployment rate and consumer credit are the last of the major ones to come out this week. With these reports coming out as well as the looming condition of the country’s rating, gold will continue to climb and make wise investors a ton of money. Friday’s U.S. GDP data showed the economy stumbled in the first half of 2011 and came close to contracting in the first quarter.

We are not even into the recovery stage of this recession no matter what any politicians tells us. Some investors worried about the risk of a recession that could prompt the Fed to use more stimulus, feeding inflation. As it is, the Federal Reserve is already talking about what they can do to help get the economy moving again. With that thought alone with the possibility of QE3 and keeping interest rates low, investors are moving into the commodity sector. Silver has gained 3% in the last few trading days as well as other precious metals. The commodity (mainly gold) has always been a safe-haven for investor who are concerned about economic havoc.

The DOW has lost a lot of it’s gains made this year. The DOW lost 266 points on Tuesday and only gained back 30 point today. So now is the time to stop thinking about investing in silver and gold start owning silver and gold today.

If you’re not sure where to start with your precious metal purchases, take a look at a company I’ve been using for some time. Click here for my review of Straight Silver.

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Add to the fact that since the federal government is still a major player in the housing market, I expect to see housing prices continue to fall another 10% (at least), before a real bottom can be called. Foreclosures are still keeping pace to the levels since the bubble popped. Take into consideration that unemployment isn’t getting any better and the current situation in Washington doesn’t help the matter at all.

So what does all of this tell you? Well if you’re looking for investments to help secure your financial situation, it’s time to start looking for some great rental properties to buy. Rental properties are needed for those Americans that have been hit the hardest and can’t afford to own a home. In many parts of the country, the apartment vacancy rate has fallen to 6% which means there are less places for renters to get into. After the mess that has happened in America, many wonder if the American view of owning a home has changed from what it has been known as, a symbol of prosperity and security. With that in mind, buying rental properties may be the best thing to do at this moment. For those who can take advantage of the housing market, you’ll be in a good position in a few years once people start looking again to owning a home.

I’ve been adding to my stable of rental properties for a few months now and I’ve been able to get some great deals. Banks are currently looking to get out from under the bad mortgage situation. Because of that alone, it’s time to look into foreclosure properties as an investment. Banks are not in the business of home owning, they’re in the financial business.

You need to do your due diligence when looking to buy rental properties. Just because rental properties are needed across the country, doesn’t mean it’s a high priority in your city or town. In a future post, I’ll go over a few of the basics you need to know to get a great deal on a home.

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Existing-home sales eased in June as contract cancellations spiked unexpectedly, although prices were up slightly, according to the National Association of Realtors®.

Why is it that every month lately when any economic report is released, it contain the word “unexpectedly”? How can they be surprised? Yes there have been buyers out there keeping the market moving, but are they moving at the right time?
Look around in your neighborhood and I’m sure you will see many “For Sale”, “Bank Owned” and “Auction” signs. That’s only part of the story, the other part is the fact that the unemployment rate is still unstable in many areas of the country. The reason I bring this point up is that if people are not going to work, they’re not going to buy a house. To add to the matter, is the fact that there are still home owners who are in the beginning stages of foreclosure. so how is that going to help when more people are losing their homes?

Analysts feel that there is some devaluing still to come. For those looking for some real estate investment advice, I want to tell you to wait. Some feel that there’s at least another 10% drop left in the housing market, so why not wait? Being patient is the best thing you want to do. Yes you want to get the possible best price on a home, however if you jump too quickly, you may find out that you didn’t catch the bottom, but now you’re riding it out. Taking your time may cause you to miss the bottom, but at least the value of your home will rise as the market picks up strength. Chasing the bottom is not the wisest thing to do. Just like trading stocks, you most likely will not catch the bottom. Like Jim Cramer from Mad Money says… “Bulls make money, Bears make money and Pigs get slaughtered.” Chasing the bottom will only get you burned on an investment.

During that time you can also work on improving your credit score, so this way you’re be able to get a better interest rate when you apply for your loan. The magic number you’re looking to be over when it comes to your credit score is 740. If not, expect to pay a higher interest rate than what the bank may offer you before the paper work is started. A better interest also increases your profit.

Instead, take your time and work on your property investment strategies. Are you going to rent the property, fix it up and sell it quickly or is it for you and your family as your new home? Most likely, you’re thinking about using it as an investment and in that case you must remember that you don’t make you money in real estate when you sell your property, it’s when you buy it. That’s right, i’st important for you to work out the numbers good enough so you can increase your investment when you purchase it.

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The overwhelmingly large amount of US national debt is worrying most financial experts in the US. In order to get rid of their debt burden, most people are trying to explore some other options that can help them manage their surging debt burden and emerge debt free in the near future. Investment is the most worthy option that is most often chosen by the debtors in order to get a firm grip on their distressed finances and pay off debt. According to most financial experts, it is a fact that one must always try exploring the investment industry if they’re keen on augmenting their returns and paying off their debt burden.

It needs no mention that the investment market is always subject to huge risks as well as gains. But if you want to take a measured step forward, you must get hold of an investment broker who can guide you throughout the process of trading the respective market. Whether it is the stock market or real estate investment, you must always take the best step forward in order to guarantee your returns.

Stock investment – Does it play a role in eliminating your debt burden?

Among all other investment options, most consider the stock market to be the most reliable financial instrument as it often outperforms all the other financial assets. By investing your money in stocks, you can always stay sure about the returns as the best way to earn hefty profits within a short period of time is only possible through the stock investment market. However, if you want to take this is as a serious profession, you must always take watchful steps and do your homework before choosing the stocks of a particular company. The stock market is always volatile and hard to predict and thus you must choose the stocks carefully and watch out before selling and buying them.

Using the benefit of the stock market and utilizing it in paying off debt

If you have already decided to consolidate your debts through a debt consolidation company and the creditors have agreed to accept a lump sum amount of money, experts advise you to do that with the help of the money that you earn from the stock market. Though you cannot always expect to earn profits, yet if you take the right steps, it is certainly possible to do so.

Real estate investment – Is it profitable?

Real estate investment is a fixed asset that you can use to pay off debt. This could be a permanent source of income for you as you can get long term benefit through this kind of investment. If you let your property for rent, you can easily secure a persistent source of income that can be used to pay off your debt obligations.

With the present economic conditions, you can also invest in gold and silver as these are usually considered as safe haven. Protect yourself from the famine effect of inflation by staying safe with your investments. Diversify your portfolio and manage your assets in the right manner in order to maximize gains and pay off debt within the stipulated period of time.

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The following smart investments for young people will help anyone that would like to get off on the right foot to building a prosperous and comfortable life.

Use Self Control: Self control is a skill that is learned. Many people learn self control during childhood, but if you did not, the sooner you can learn the benefits of delayed gratification, the quicker it will be to keep those finances under control. While easy credit allows an effortless purchase, waiting until the money is available offers a better option. Who wants to pay credit card interest on food or clothing that is here today and gone tomorrow.

Set Goals: Without goals, individuals do not have an effective strategy to a secure financial future. Having goals is the key to making the best choices regarding one’s financial future.

Take Charge of Your Future Financially: If a young person does not take time to learn money management, their money will be mismanaged by others. Unfortunately, some of the people are going to be unscrupulous and ill intentioned. They may hope to make a profit for themselves using your money.

Rather than being dependant on others for financial planning, the investor should take time for reading and learning about personal finance. Once armed with this knowledge, avoid letting others catch you unaware.

Keep track of spending: One of the first things to learn is that expenses cannot exceed income. Budgeting is the best way to make the hard choices. If you take time to add up what is spent on coffee each morning, you can start to make small, yet manageable changes in the expenses of everyday living that can have as large an impact on finances as a large raise.

Begin an Emergency Fund: One theme repeated in almost any financial advice is to make the first payment to yourself. Regardless of the amount owed to credit cards or student loans or the amount of your salary, some amount should be set aside in a fund for emergencies every payday.

Start Retirement Saving Now: While retirement seems a long way off, it will be here sooner than you think. The earlier you start saving, the less money earned through wages you will need to invest, and the larger your retirement nest egg will grow. Within a few years, early retirement savers will be working on money that allows the optional plans for retirement and not just the necessities.

Understand Taxes: Because every dollar that is earned is subject to taxes, knowing how they work will let you know what your take home pay will be. This is necessary to see if you are going to earn a living wage.

Guard Your Investments: Insurance is one of the most economical investments to ensure that the money you earn and save does not suddenly vanish. Renters should insure the contents of their homes. Home owners will need home owners insurance. Disability insurance offers protection of one’s ability to earn money.

Characteristics Of Ideal Investments For Beginners

Low Initial Investment and Maintenance: The ideal investment should not require a huge outlay of money as this barrier may prevent the beginner from investing. In addition, there should be a very low cost to maintain the investment. That is where index funds and mutual funds come in. Here are some index funds basics that you should for investing.

Automatic. Young investors do best with payroll deductions to get started.

Transparent Growth. Young investors need to be able to see the money that is being invested grow. As the value of the investment grows, it creates excitement for the young investor. Investments that can be monitored online are often good choices.

Low Risk. While this may be controversial, young investors that have great losses in the beginning can be discouraged from further investing. Higher risk investments can give higher yields and young investors do have longer to recover.

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The stock market can be broken down into sectors based on the types of stocks for sale, such as blue chip stocks, industrial stocks, technology stocks, or financial stocks. The financial sector is a popular area for investment, but as with all stock market investments, and indeed all of life, it is important to know what your are buying before you buy it. What that means for you is that you need to research the companies that you are interested in. All companies in the United States are required to send financial information to the Securities and Exchange Commission (SEC), which posts this information on its web site. By looking through the financial filings of companies, you find out a lot about them. Some things to look at are: how much the company owes, how much it makes per year, and how much it has paid out to investors in the past in the form of dividends. You can find out more about what to look for in these financial filings by going to your local library and checking out any book on the stock market.

There’s more to the stock market than just this, however. One thing that is hammered into the heads of all business school graduates is this: diversify, diversify, diversify. Think about it: if all of your money is tied up in one company, and that company goes belly-up, you have no hope. But if you have spread out your investments over many different companies in differnet sectors then you may only take only a small loss. Something else to watch out for is becoming too attached to your stocks. You should never put your emotions into your trades. Doing so will most likely cause you to not think clearly when trouble starts and the stock price falls. It’s better to take a small loss now than to wait until that “favorite” company is selling for pennies per share. There is much more to playing the stock market than just this, of course, but if you follow these few simple tricks, you’ll be well on your way to success.

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Bonds come in many types and names. There are treasury bills (T-Bills), municipal bonds (government bonds), corporate bonds (loaning to a company), asset backed bonds (like a mortgage), and odd ones like convertible bonds (which have the option of turning into the company stock.)

If you’re not looking to scalp the bond market your main concerns with bond investing are:

What is the rate of return I will be getting versus inflation? Inflation is the increase in prices of goods you buy everyday from year to year. If you earn 1% per year on your money, but what you buy goes up 3% you really just lost 2% this year. You need to estimate inflation each year not by what the government says it is, but by what you actually spend most of your money on.

How safe is the bond? All bonds are rated from AAA like the treasury bonds from the federal government to junk bond status. The safer the bond investment the lower yield it tends to return. However, this isn’t always true, sometimes you can find safer investments that are offering more or companies that are rated lower than they should be driving their rate of return up.

What do I think interest rates are going to do in the future? Right now interest rates in the United States are extremely low. Therefore, odds are interest rates will rise over the next 5 to 10 years. This means any bond I purchase now will likely go down in value over time. This doesn’t mean I shouldn’t buy the bond, I’ll still get my payment every month or year, but it does mean I likely won’t sell the bond early to get my money back. In this case I know I will be holding the bond a long time. If you think interest rates will be dropping then you are at the best time to buy bonds because you’ll be getting a higher rate of return, plus you’ll get more money back if you sell early.

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Why Invest in Real Estate?

Real estate is a great alternative to the stock market and cash investments. The market is not necessarily tied with equity or commodities and you have a lot more influence on the profitability. Most people think real estate investing means being a land lord, but there are other alternatives also. Some investors purchase land and harvest trees off the land until the prices appreciates to their target. Others buy homes where there is enough land for two houses, build another house, and then sell them both off. You can also buy commercial property and lease to businesses with a share of their sales as part of the income stream. Be creative, most investments don’t give you the option.

Important Concerns in Real Estate

The number one killer of the real estate investor is cash flow. Often when you purchase your property you rent won’t cover the mortgage and expenses. The investments are called cash flow negative, or they cost you money every month. However, you’re banking that the property will be worth more in the future to cover the costs plus the tenant is paying the majority of the mortgage for you. Make sure you can stomach the extra monthly payments plus all the hidden costs that come with real estate like unexpected repairs and periods without a tenant.

The next concern is liquidity. If you need money now and you own stocks you simply sell some stocks, get your money and you’re on your way. However, with property investments it can take months or even years if the market is bad to get your equity out of the property. If your credit is good and you’re not too leveraged than you should be able to get home loans to cover a real emergency.

The last concern for this article is tenant screening. This is the single most important step! Do not take the first tenant that walks through the door. Do all of your due diligences or you will get burned. Bad tenants will do damage, are hard to evict, and will suck the passion out of real estate investing which is needed to find that big win.

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