Have you heard of the saying “buying on dips”? This simply means purchasing stocks or investing your hard earned dollars on days that the stock market dips or goes down. It could either mean the market itself goes down, or a specific stock prices goes down due to global or local news not specifically related to your stock of choice. Stocks tend to get impacted when global or economic events occur which worry investors. People in general are hard wired to buy on good news and positive trends, so it’s difficult to change your mindset to purchase on a downtrend. The benefit is that it can payoff significantly.

Take a recent example by looking at Terra Nitrogen Company (TNH). On August 2011, it peaked around $195 per share. By mid September 2011, it dropped to $139 per share in a matter of 5 days while the overall stock market was down significantly. There was no specific company related news that triggered the sell off, but rather overall market sentiment by the every day investor. Within 30 days of the drop. the stock was already back up to over $170 a share. If one were to purchase this stock around the bottom of the drop, and sell today, they would walk away with over a $30 per share gain in just over a month. Another way to look at this is, within 30 days, an individual investor could of gained overall 20% on their investment. This is just one simple case out of many that occur on a weekly and monthly basis. So as you can see, individual investors can benefit in a volatile market just as much as a bull market. One just needs to reverse their natural trend of buying on upswings and positive news, and instead purchase on the negative news resulting in overall market drops. Happy Investing!

Analyze what your monthly phone expenses are.  For example, how much are you paying for  your land line, your individual mobile phone plan or family plan.  Many times telecom companies have packages or bundles that will reduce your overall costs.  Also, determine if you really need a land line phone.  Many families can get away with only having mobile phones instead of land lines, which will reduce overall costs.  (Potential Annual Savings: ~$720.00)

Insurance is usually an overlooked item that people determine is a necessity, fund insurance policies, and forget about them.  Insurance is insurance, meaning you are paying to protect yourself or your tangible items in case of unexpected events.  Families should not waste unnecessary expenses by overpaying for insurance policies.  Hundreds or even thousands of dollars can be saved by simply shopping around and comparing insurance policy prices.  This should be done for home, auto, and life insurance policies.  Grouping policies together with a single insurance agency can also provide lucrative discounts.  (Potential Annual Savings: ~$500)

Grocery shopping can easily be a families second most expensive budget item behind housing costs.  By shopping for generic brands, you can save 20-40% off of the price of a similar name brand product. Assuming a typical family grocery budget of $500 per month, that can be a significant reduction in overall yearly expenses.  (Potential Annual Savings: ~$1200)

By using only these simple steps to spending less, you can potentially realize an annual savings of ~$2420.00. Add this up over a 60 year lifetime of just being aware of these three expense items would save you $145,200.00.  Assume you invest that money each year over a 60 year life span with a measly 5% annual return.  Your savings would accumulate to just under $1 million dollars ($943,659.86 to be exact!)  As you can see, building wealth over time can be a function of spending less, instead of the all too typical “need to earn more” mentality.

Recommended Reading:

• Building Wealth 101
• How to Build Wealth

As a general rule, debt to equity above 80% is considered very risky and financially unhealthy. Usually young singles or couples purchasing their first home with little money down will fall into the 80% or higher debt to equity ratio category. As you build income capability over the years and grow your savings account, a more ideal debt to equity ratio would be in the range of 25% – 50%. Typically older couples will have %50 or less debt to equity ratios.

To use debt to equity ratios as a financial health indicator for personal finance, it is best to track this ratio every year. To calculate the ratio from your personal finances, first add up all your liabilities. Liabilities include home loans, auto loans, and any personal outstanding loans in addition to credit cards and bills owed. Next, add up all your assets which should include your home appraised value, car appraised value, and all amounts in your savings, checking, 401K, IRA and investment accounts. Simply divide your debts or liabilities by your assets and this is your current debt to equity ratio. Start tracking this ratio on a yearly basis. To make it easy to remember, pick a time you usually review all your financial accounts such as at the end of the year, or during tax time in April. You should strive to decline your debt to equity ratio each year over time until you are in the healthy range of 50% or less.

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Moving Money Abroad into Foreign Currency Accounts

Option #1: Wire Transfer Bank to Bank

This option is ideal if you prefer to setup wire transfer instructions well in advance with the bank. Most banks require you to sign wire transfer authorization forms in person to enable wire transfer for your account. Additional, banks generally require you to call in person to initiate wire transfer instructions. Very few banks allow international bank transfers through online interaction. Beware that wire transfers (especially international wire transfers) usually have large fees associated with both the transfer fee and the exchange rate fee. Be advised to check the exchange rate for the bank to bank transfer as you may not always get a competitive exchange rate.

Option #2: Bring Cash with You

This option is rather self explanatory, however there are some cautionary items worth mentioning.  When you travel or visit your home country, withdraw funds and bring cash with you to deposit in your foreign currency account abroad.  You should not deposit directly your home country’s currency type, but instead find local money changers to change over the currency into the local currency.  This will save on currency exchange rates and also get you the best exchange rate possible.  You will need to also check import rules for the amount of cash allowed into a country without declaring on the customs form.  If you don’t mind declaring the cash with customs, you can bring it as much as you desire.  Obviously another downside is that you have to travel back and forth to your home country and host country in order to transfer money, however if the trips are timed with vacation or family visits, this options is most ideal.

Option #3: Use your PayPal Account

If you already have an online PayPal account, you could open another PayPal account in the country your are residing.  PayPal offers both currency exchange options, as well as withdrawal of funds from PayPal accounts to local banks.  For example, if your home country is the U.S. and you are currently residing in Malaysia.  You can open a PayPal Malaysia account that accepts both Malaysian Ringgit (MYR) and US Dollars (USD).  You can then either use your U.S. PayPal account to send USD to your Malaysian PayPal account, or exchange over to MYR and deposit directly in MRY currency.  From your Malaysian PayPal account, you withdraw funds in either MRY or USD to your local Malaysian bank account.   There are fees to be aware of with PayPal, however these fees are comparable or lower than bank to bank wire transfer fees, and money is transfered instantly between the two PayPal accounts.  It is also worth noting that the currency exchange rates offered through PayPal are slightly lower compared to market rates.

An innovative solutions PayPal now offers is the ability to deposit checks directly into your paypal account remotely. This is done through the PayPal iPhone app, which allows you to take a picture of the front and back of a check, which will then get deposited into your account within 3 – 6 days.

Whether you use bank to bank wire transfer, cash deposited or online account funds transfers such as PayPal, you will have research fees and determine which options is the cheapest and most timely for your specific situation.

Cash advance loans have further benefits in that the approval rate is very high. Anyone that can provide documentation of income through a paycheck or other means of income will usually get approved for a cash advance. Since the approval process is streamlined, and the approval rate is high, it means less frustration for customers and no need to worry about a long and tedious loan approval process.

There are some downsides to cash advance loans worth mentioning, however the benefits of cash advances for customers needing cash in a hurry for short term purposes outweighs the negative aspects. Cash advance loans usually carry much higher interest rates compared to traditional loans. Since the terms of cash advances is short, this is not an issue for most people. If cash advances were used for long term loans, the higher interest rates would not be ideal. Another downside is that the cash advance loans are usually very short term, in the range of 1 – 2 weeks. Customers looking to obtain cash funds for a longer period of time may benefit more from obtaining traditional loans through banks or other financial institutions. Lastly, these short term cash advance loans sometimes come with large up front fees. It is worthwhile to shop around, as fees vary widely between the various cash advance lenders both online and at retail centers.

Cash advance loans provide an ideal method of obtaining cash quickly and easily to overcome short term money needs. It is best to shop around however, to get the lowest interest rates, and compare up front fees to reduce overall loan costs.

With the bull market entering its third consecutive year, investors are growing cautious about the returns of the investment market. Higher interest rates, surge in commodity prices and federal budget struggles are more than enough for the investors to remain watchful this year. As the global economic crisis continues to resound through the global investment markets, the financial analysts are of the opinion that tight credit markets, consistent economic uncertainty and reduced tolerance for risk will dominate the investment decisions taken by most investors this year. Here are some top investment trends of 2011 that will help you know the nooks and corners of the investment market and take an informed and measured step.

1. Investors will take a defensive step: Since this is the third year of bull markets, it’s high time that there is a definite transition in the investment market. As 2011 goes on, investors who had invested in stocks that have appreciated sharply are shifting into a more defensive stance, according to the opinion of some investment experts. While the investors are questioning the sustainability of the ever-increasing bull market, they are embracing the sectors where demand is always static. This strategy for 2011 will push a large number of investors towards energy, health care and utilities.
2. Stocks of large companies will be ‘in’: Historically, it has been always seen that when the investors become extra watchful regarding the stocks, the small and mid-sized companies have suffered. Comparatively, the stocks of the large sized companies fare better than them because the investors then prefer to remain with a larger company than tolerate the risks of investing in a small company.
3. Investment strategies will be based on evolving risks: The outlook of inflation is entirely different with the emerging and the developed markets. However, the investment experts are of the opinion that the wage and price inflation may stay in check in the US for the next two years with the continued surplus capacity of the US economy. There is low inflation in Europe and deflation in Japan. However, in China, India, Russia, inflation has risen sharply and the lawmaking authorities have started raising the interest rates to ease off the economic pressures.
4. Investors will review their reliance on equity risk premium: According to the valuable opinion of some investment analysts, the investors will review the role of equities on their investment portfolio since the after-effects of the global financial crisis. Only investing money in stocks of companies that have an exceptionally high growth rate will not be enough in 2011. They also have to concentrate on the diversification of their portfolio and consider whether investing in equity funds may benefit their investment portfolio.
5. Lift in oil company stocks: The price of oil in the last quarter of 2010 has been $90 a barrel. The last time oil finished with a strong value was in the year 2007 with $96 a barrel that skyrocketed to $145 a barrel by the second quarter of 2008. Unfortunately, the stock prices of the oil companies rarely surged in 2008. Since then the rising price of oil was not converted into the rising price of stocks. However, the financial analysts do not see the same thing happening this year. Therefore, the oil company stocks will preferably get a boost with the hike in the price of oil.
6. Investor’s flight to emerging markets: The emerging markets or the nations that are gradually becoming advanced are inviting investors as they’re experiencing rapid growth. India, Russia, China are some of the emerging markets and may also show GDP growth that will be two-times higher than that of USA. Experts predict that investors will look for more opportunities to invest in such markets.

Investors in 2011 will shift slowly from low risk investment to investments with higher yield but due caution has to be maintained within the industry in order to avoid the repetition of the same thing that most investors faced in the late 2000s. Investing in alternative energy and emerging markets will be among the top investment trends this New Year.

Recommended Reading: Dividend Stocks for Dummies

Easy Investing Strategies is starting a new series of posts related to stock research and stock picks. We will be tracking our selected stock picks, and all stock selections will be done using the Easy Investing Strategies outlined on our site.

To start off our research, we dove into  a stock screen using a criteria we should hold all reputable companies to.  First, we selected companies that currently pay a 5% dividend or higher.  To understand how you can further benefit from dividend stocks, read our post High Dividend Investing post.  Second, we selected only companies that had zero debt, and had cash balances on their latest balance sheet of $100 million or more.

As expected, the results produced a large number of companies known as REIT’s.  REIT’s are Real Estate Investment Trusts, and usually have high dividends due to the law that REIT’s must pay out a large portion of their earnings each quarter as dividends to their shareholders.  Since the real estate market is still depressed in most areas due to the sluggish economy, we decided to remove all companies that are REIT’s from our list.  This left a few interesting companies left over.

Himax Technologies, Inc. (HIMX) is the first company that caught our eye.  Their current dividend payout is at 9.8% based on the most recent closing stock price, and they have $161 million cash on hand.  The 52 week stock price ranged from $2.16 to $3.58 per share.  The narrow trading range was also something that we liked as it meant the stock is less of an overall risk.  Sometimes stocks have high dividends because their stock price drastically drops, making it more volatile and a higher risk choice.  Himax Technologies shows more stability in the stock price, making it a better choice.  Himax Technologies designs, develops and markets flat panel displays.  Based on the number of flat panel monitors, TV’s, and mobile handsets in the market today, there is no foreseeable end to the consumer demand for Himax Technologies flat panel display technology.  Easy Investing Strategies is giving Himax Technologies a high recommendation.

Garmin Ltd. (GRMN) is another company that stuck out on our stock screen.  The dividend currently sits at 5.4% with $1.192 billion of cash.  The company has recently introduced the Garminfone, which combines GPS features from the mainstream Garmin GPS models, and a mobile phone together.  Garmin seems to be keeping up with the latest technology, and with a decent dividend and loads of cash, Easy Investing Strategies highly recommends them.

After our highly selective stock screen and analysis of resulting companies, Easy Investing Strategies top pick is Himax Technologies (HIMX).  This is due to its low stock price, excellent dividend, and visible demand for their technology in the marketplace.

Disclosure: Easy Investing Strategies does not own or hold Himax Technologies or Garmin Ltd. stock.

Real Estate

You would think that no one is buying real estate in this market, but you’d be wrong. There are plenty of investors looking to buy foreclosed homes because the prices are rock bottom and the market has no where to go but up. They may have to put several thousand back into the place to get it presentable, but they expect to make many tens of thousands when the market recovers.

Skills and Education

Many people are finding the return on their savings account miniscule compared to the investment of retraining in a new field. When old jobs have disappeared, there’s no choice but to get a new skill or a brand new education to be able to compete in the job market. If it literally raises your potential for income too, it can be a very good investment to make in bad times.

Other Investment Types

You can get certificate of deposits that are based on gold or foreign currencies. You can even buy gold and silver coins, as a commodity. You can buy seed and start a home garden. Of course, that takes a bit of investment in skill and gardening know-how. The point is to diversify your investments and always seek to get the best yield for your money so that you can build wealth slowly, but surely, over time.

Real Estate investing here refers to purchasing a home and leasing it out as rental property.  There are multiple benefits to investing in properties this way including cash flow from tenants, appreciation on the home over time, depreciation deductions, and tax benefits.  Also, it is always advisable to purchase investment properites with as minimal down payment as possible in order to maximize leverage.  This is where making your first million dollars comes in.  Leverage is essentially using other peoples money to purchase real estate, allowing the little money you put to grow exponentially.  For example, say you put a 10% down payment on a $150,000  investment home, and mortgages 90% of the value.  You would be putting $15,000 of your own money into the investment.  Now say you hold the home for 10 years, with average appreciation of 5% annually on the home price.  The gross profit in appreciation alone would be $95,000.  So essentially, you would of turned $15,000 into $95,000 over 10 years, but it gets even better.  Your tenants would of paid down your mortgage substantially over those 10 years as well.  This also doesn’t include any cash flow received from tenants over the 10 years, depreciation deductions, and tax benefits either.  So this begs the question again, how do you make your first million in real estate?  How about borrowing a million dollars and having someone else pay off your debt!

In this scenario, the “someone else” is the tenant or tenants, and you are the one borrowing the million dollars.  For example, you could purchase one home each years over a ten year period in the $150,000 price range.  With each mortgage you would be borrowing greater than $100,000 of the purchase price.   By the 10th year, you would be have borrowed over a million dollars, and your tenants from your first few homes would of paid off a big chunk of those home’s mortgages already.  Taking into account appreciation, cash flow, and tax benefits, you will actually reach a million dollars quicker than you might think.

Other Articles:

• High Dividend Investing
• Saving for College Education through Investing Properties
• Getting the Best Investment Property Loan

Of course there are downsides to peer lending as well.  Default rates are generally higher due to the eagerness of lenders wanting to achieve above average rates of return.  Also, sometimes terms are worse than bank loans or mortgage loans in the aspect of pre-payments and/or fees.  It all depends on how the loan agreement is structured.

There are a few popular peer-to-peer lending sights available on the internet today.  The most popular two are Lending Club and Prosper.   Both sites allow you to become either a lender or a borrower.  Note that lenders are limited to specific states that have been approved.  Advertised rates range from 6% up to 30% depending on the risk a lender is willing to take.  The downside to these peer-to-peer lending sites is that they usually require a credit check, and adjust the rates based on credit score.  Prosper.com works more along the lines of an ebay style site for loans.  So the credit rating is not as critical for Prosper.com.  Lending club rates are completely based on credit score, assets and background information you provide during the sign-up.

Other means of peer lending or private lending is simply to ask friends or family members for loans.  There are sites (Virgin Lending) and documents that exist to make these peer loans more official instead of just taking your friend of family members verbal commitment to pay you back.  These are the best loans to come by and can be structured  to be very flexible depending on the needs of the person loaning the money and the borrower requirements.

Peer loans can be used for real estate purchases, credit card debug consolidation, home remodeling, home rehabbing, or simply to fund  at dream vacation.  Next time you are in the need of money, consider bypassing conventional bank and financial institution loans and consider Peer Lending.

Other Articles:

Getting the Best Rates on Investment Property Loans
Mortgage Rate Trends
Residential Hard Money Loans

Sites like zillow.com and bankrate.com are excellent resources for tracking and predicting where mortage rates will be headed.  For example, on zillow.com, you can track mortgage rates for the average 15 and 30 year rate based on daily, weekly, monthly or quarterly charts.  Note that rates are different for each state, so rates shown on sites like zillow.com show the average rate across all states.

To find local rates, it is best to search for mortgage companies in your local area.  For example, if you live in Austin Texas, one of the local mortgage companies called SweetWater Mortgage shows rates for the local area and Texas.  Rates can be as much as a 0.5% difference from state to state, so make sure to check your local rates in comparison to the US average mortgage rate trends.

Bankrate.com provides a zip code input form so the site can cater mortgage rates to your specific area.  The search results will provide the lowest rates around and disclose any points or fees associated with obtaining that specific mortgage.

Next time you are looking to find out current mortgage rate trends and understand what direction mortgage rates are headed, look no further than you local mortgage provider web sites or industry specific sites like zillow.com.

Other Articles:

Getting the Best Mortgage Rate on Investment Property Loans
HUD Foreclosure Properties
Residential Hard Money Loans