There is no guarantee that you will profit from flipping a foreclosure. The market is very competitive and, if you aren’t careful, it’ll leave you broken hearted with empty pockets. So how can you gain an edge against the thousands of foreclosure infomercial wannabe millionaires? Simple, work hard and learn as much as you possibly can!
This is where my analogy of an investment being like a marriage is not similar (or maybe exactly like a marriage, depending on who you ask). At some point, you will need to exit the investment to make a profit. In other situations, you may have to exit at a loss if your review turns up very ugly truth. Either way, you ultimately will get out.
The key: as your income increases Do not expand your lifestyle (living expenses) to match those income increases. I call it “slow the turn”. Reinvest the increases into investments that will turn around and pay you more. Work smartly. I know that may contradict the fact that I still mow my own lawn; however, I have a goal I want to achieve before outsourcing that labor of love. Through pain, I find change. Talk about motivation -huh? You see there are keys to working smartly. What is your time worth? And, it all depends on your assets? One has to work those assets and leverage them based on there merits (quality) -whether it’s money, skills and/or time.
In effect you are preventing your investing plan from trying to time the market, thus saving yourself from the losses associated with trying to time the market. Dollar cost averaging forces you to buy more when a stock is low and buy less when it is high.
Your success in investing will mainly depend on how well you know yourself as an investor. If you think you can’t succeed in investing, you are most probably correct. Only when you know, with conviction, your financial goals will you be able to determine how you will fare in the challenging world of investing.
What these hucksters fail to deliver is a lasting strategy. No matter how eloquently you talk about winning stocks, once you deconstruct the advice several common elements emerge. These are basics of investing 101, and what everyone who plays the stock market game needs to know.
Take for example a game I once played called “Sic Bow”. Basically, there are three dice in a clear plastic dome which are then shaken and put on the table to reveal three numbers. Prior to shaking, people have the option to place bets on a variety of choices. You can bet on what you think the sum of all the three dice will be, whether or not it is a high number (above 10) or a low number (10 and below), select a range of numbers etc. Depending on the type of bet you made, and how risky it would be to win that bet, would ultimately determine the amount of money you would make. The same thing goes for investing.
Choose the fund you want to invest in, then complete the application for that fund. Be sure to include your name, your address and your Social Security number. Depending on the fund family, you might also be asked to provide information about your job and your income level.