Passive Income – The Magic Of Mail Box Money

Income in the future will be challenging to the individual investor. With the changes happening with the investor base, I am referring to the baby boomers and the fact they are retiring soon, we have to readjust out thoughts on how much is too much from our portfolio.

When we invest in stocks or bonds we are essentially investing in business. Let us consider an example of investment in a small local business. A sausage maker is trying to raise half a million dollars to start his business. You may know the chef personally or know of his reputation. You’ve enjoyed his product and respect his passion for and commitment to making a wonderful sausage using the best organic ingredients. A number of people come together to invest in this business. They might lend to the business (becoming bond holders) or provide equity (becoming stockholders.) The investors provide the capital that allows the business to be born.

Finding the best investments in Spain in the bond fund arena will be a bit harder in 2012. In 2011 bond fund investors made money even though bonds were paying income yields that were near record lows. With the 30 year U.S. Treasury Bond yielding 3% and the 10 year note at 2%, how did investors make 8% or so in government bond funds last year? The value of bonds went up as interest rates continued to go lower and lower, making the fixed income bonds offer more attractive. When the best rate you can get on a one year bank CD is less than 1% and the best rate for a five year CD is 2%, don’t expect rates to fall much more.

If you have teenage children with their own vehicles beware of buying a property with a shared drive. This could be the source of future conflict. Even without teenagers in your household, what of your prospective neighbour and his children and visitors? You may well find your neighbour is extremely gregarious – always entertaining. Will you always have clear access to your house when needed?

A great idea is to get a mortgage broker to call into your home and they will sit down with you and go over the figures. Once you know what price bracket you are in and what you could get from the banks, then consider getting a pre approved mortgage from the lenders. This means you can go shopping knowing that you have the finance side sorted. When dealing with financial institutions, don’t be scared to negotiate rates. Ask if the advertised rate is the best they can do for you. Don’t be scared to let them know you are shopping around for a good deal. You can also ask for a reduction on the application fee – or you could ask for a contribution towards your legal fees. If you don’t ask you won’t be given, so speak out confidently.

Lastly, after your mortgage was approved and pick a home getting good deals, make sure that all documents that will be processed are legal and certified. Of course, as a first timer you may not have enough knowledge with regard to legalities of the paper. This is a tougher job that you should let a lawyer do the job for you. Documents like deed of sale, land title, transfer of property is very critical paper woks, that only expert can do this kind of job.

Not being able to know what will happen can be quite unsettling. This means that you have to do your best to protect yourself if the worst does happen. Having exposure to alternative assets will help you with that.