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Strategies For Wealth Creation and Protection Of That Wealth


Saving money tips

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Old 12-29-2007, 06:27 PM
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LapTop LapTop is offline
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Strategies For Wealth Creation and Protection Of That Wealth

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By Martin Thomas

If you think wealth is difficult to create, you should try holding on to it. Holding on to money is much more difficult than getting it unless your strategies are sound. Most people who are wealthy and stay wealthy have some form of expansion and consolidation strategy going on.

Typically, you take risks to make money. To earn money, you need to spend it so the risk lies simply in the fact that money has left your hands. There is always at least some risk. When your deals pay out and you get that money back and then some, it is time to consolidate it. To make it keep working for you and making a return, in the safest way possible.

The most mainstream way to wealth is compounding. By using leverage you create a compounding effect for your seed capital account. Most wealthy people work with degrees of risk and levels of return and also SOR or speed of return. The quicker the deal, the more time you have to do another in the same year, the bigger the compounding.

We begin with a simple bank deposit. This is simple to understand and very safe. Give the money to the bank and they use it or "lease" it from you to spend on peoples mortgages. They pay you a single digit figure like 5% on your funds per year. Most wealth creation strategies rely on this as a bench mark. It is the safest place to park money and is the most liquid, meaning you can access it in an emergency if you really had to. Even a fixed term deposit can be accessed if you really had to, subject to a reasonable penalty fee.

The next safest place, providing you bought well, is to park money in real estate. This is better than a bank deposit because of the superior returns. The historical rental return on a property is 7% but to that you can add the appreciation, which is also around 7% These capital gains and the rental add up to a ball park historical figure of 14% which is nearly 300% better than the present day average bank interest rate of 5%

Smaller parcels of money can be applied to higher risk, higher return propositions like the stock market or joining a mutual fund or a hedge fund. Ultimately the safest place to park money is in a bank, but also there is the temptation to spend that money and make plans with it because it is so liquid. Real estate on the other hand is the golden medium. It pays historically much better than a bank and it is also not very liquid. You need to sell the property or access the equity to gain access to your cash.

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Investing $100 - You Invest Cheap But Smart


************************************************** ****************************

Dear Friend,

Not long ago I was standing in your shoes...

...working a 9-5 job and feeling trapped in the system. I longed for a way to increase my income without having to give more hours of my life to another heartless corporation.

I'd read about people making easy money on the Internet and I imagined how great it would be to work from home and spend more quality time with my wife and 3 children.

So, I did my homework, learned everything I could about it... then started a business wholesaling merchandise on eBay.

And I thought I was doing pretty well...

That's before I cracked the code on how to make REAL money online, and I've never looked back. Keep reading....


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