Mortgaging a House

Having a house of your own is a dream seen by a million people and is usually an inspiration to other people to get out of their rented ones  A own home for many actually represents freedom where in one can do whatever he wants to. So let’s take an instance where in you have a good job, but not enough money to buy an own house. So what can you do about it? Mortgaging would be the best option. A bank or a housing finance company would consider your application for a mortgaged loan taking into account your capabilities and the net worth of the house. If both seem satisfactory then the bank/institution issues the loan keep the house documents as mortgage. The interest is charged monthly and may be after a certain period of time, may be ten to fifteen years, when the loan is completely paid, the documents are returned to the owner. So how does the bank gain?  The bank charges the borrower a certain interest through which the bank makes great money. And whats our advantage – We get a loan at the required time and usually after a certain period of time; the value of the land appreciates. Hence compared to stocks/shares this seems to be a good investment for long time business people.

Mutual Funds

These days mutual funds have become very common and we can see a large number of people investing in it. So lets have a basic knowledge on how the mutual funds concept work. Going by the definition, a mutual fund is a collection of stocks/bonds or even the combination of two. Hence mutual funds represent a company which brings together a group of people and invests their money in stocks, shares and bonds. Each investor would have a portion of the shares or stock of the company. And the most important point as to where you earn your money from – 1.Dividends is paid when the company makes profit and also you get interest on bonds.2. If the securities are sold at a higher rate than the profit incurred would be distributed to the investors.3. If the value of the shares increases then you can sell the shares in the market at a profit. The advantages of a mutual fund are that your risk is evenly spread out. Mutual fund companies usually have stocks of a large number of companies. Hence loss of any industry wouldn’t hurt you much instead of being an individual investor. As mutual fund companies buy and sell at large, their transactions costs are minimum compared to individual ones. Hence investing in a mutual fund is a good way to use your money.

BONDS - Basics

Well if you’re excited about shares, then bonds are something a little boring to the person who would love to trade his money during the swings in the market.But speaking technically, it’s safer to keep a part of your investments in bonds.So what are bonds exactly? When a person starts a company, he requires a large amount of capital and this large amount of sum cannot be obtained from a bank.So what the company can do is that they can issue bonds to the public and people can buy those bonds at predetermined rates. The organization that issues a bond is called a issuer and the person who invests money is called an investor.The advantage of getting a bond is that its similar to a loan issued to the institution. The institution in turn has to pay the investor some predetermined interest. This concept is slower especially when the market goes up and down and there is large scope of improvement when there is higher profit on investments in shares. There is a disadvantage too – If the company goes on loss or bankruptcy then there is no guarantee that a investor would get back his money. So when you are investing in stock/bonds make a smart decision before investment. 

Yes We Can

Every man is different and every person has his own dream of becoming something in life. But it’s not easy that everyone accomplishes on what they plan. The first step involved in achieving ones goal is to set a framework and aspiring to achieve it any manner.  There is many a times when we do not achieve whatever we plan. There might be reasons why one quits his efforts towards the goal and continues with his normal life. But then one who again comes back to achieve this goal is called the brave one. Most people lose interest half way through. This is the common mistake done by most of the individuals. If we manage to stay focused then even the impossible becomes easy to reach. Let's demonstrate a small exercise – close your eyes and think of the accomplishments you have made in your life. Compare the hard work put in achieving the accomplished and to be accomplished. You will know the difference and would automatically start correcting yourself. Quitting is easy but pursuing your goal is the art we all need to learn.

Stocks and shares - Basics

We must have all heard about stocks and shares and today I would want to share a few ideas for beginners in this field. If someone in your family is doing business, then you must have surely heard these words, today you will know what they exactly mean. Now suppose that you start a company, say 100 million dollars as capital, you surely don’t have so much with you to invest. The next step, you would want to bring in partners in your company to help you out with the capital. If it’s not possible to accumulate the capital through partners, then the next step would be ask for the public to invest in the company. When the public buys a stock/share of the company, he theoretically becomes one of the owners of the company, irrespective of the number of the shares. This doesn’t mean that you have a say in all the company affairs. The main decisions are taken by a group of directors who are elected. So what’s the advantage in buying shares? Well there are two reasons: If the company performs well, then you get an annual dividend that the company allocates based on their profits. Else you can sell the shares at a higher rate when the prices of the shares have shot up. This being the technique utilized by many stock analysts. So if this article has inspired you, then I m sure you would invest in a company’s share right away