Posted by Ryan on July 23rd, 2008 in Making More Money

I haven’t done this in quite a while, but here’s a video on how I used to make a quick few hundred dollars. I don’t see how this could fail if you do your research.

I never tried to make this more than just a little extra cash to help finance the start-up of other ventures. With the right organizational skills and the ability to spot opportunities, I don’t see why this can’t be scaled out to bring in a full-time income.

One thing I forgot to point out is that if I couldn’t sell the items on Craigslist, then I’d post it on eBay as a last resort. I think that only happened once, but I found it to be a great resource to unload things. It might cut into your profits a bit, but that’s just the cost of doing business.

Note that I live in Chicago where Craigslist is a very active website and there is a market for just about anything you can imagine.

Millionaire Money Habit: Rather than trying to find obscure markets with no competition, I always followed a philosophy to go where the herds are. Find a way to get involved in areas where the masses have needs or wants, and you should have no problem making money.

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Posted by Ryan on July 21st, 2008 in Investment Strategy

Investing without a strategy is like a Sunday driver without a map. You know have a vehicle that can take you places, so you get in and drive around with no destination, no direction and no concept of how long you will be driving before you run out of gas.

It’s important to look at your current situation and examine your goals, timeline and risk tolerance, and outline a plan to reach those goals. Then you can evaluate your necessary investment strategy and game plan. One strategy is to distinguish between a period of capital growth or capital preservation.

According to www.investopedia.com, capital preservation is, “An investment strategy whose primary goal is to prevent the loss of an investment’s total value.” It is a highly conservative investment strategy, characterized to avoid risk but still acquire moderate appreciation on your money. Capital preservation usually means investing the bulk of a portfolio in fixed-income investments that guarantee returns, but offer lower annual returns in exchange for their low-risk association. High quality bonds, money markets and certificates of deposit (CDs) are some examples.

Capital growth, according to www.investopedia.com is, “An asset allocation strategy that seeks to maximize capital appreciation, or the increase in value of a portfolio or asset over the long term.” This would include a portfolio that mostly contains equities, or stocks, in the hopes that the value of the stock will increase over time. Investing for capital appreciation brings on more risk, but the potential for returns can be much greater.

How to determine your investment strategy will depend on your goals, your timeline and your risk tolerance - or how much you can comfortably afford to loose in a worst case scenario. Typically, a person nearing retirement will shift their investment strategy over time towards a capital preservation approach since they do not have the benefit of taking risks and holding through market corrections. Younger investors generally focus more on capital growth, as they have an entire life to rebound from downturns and learn from mistakes.

Current market conditions can also determine an investor’s strategy in the short-term. As discussed in The Best Time Ever to Buy Stocks, the market regularly goes through cycles. There are periods that stocks tend to trend up and times that it trends down. During down cycles it may be best to focus more on capital preservation and prepare to distribute your capital into the stock market as opportunities arise and the market turns around. This, of course, assumes you know how to time the market efficiently, which is a complicated thing to do.

Millionaire Money Habit: Analyze your current situation, investment goals, risk tolerance (link to measuring risk tolerance article), and your timeline to help develop your investment strategy. If you are nearing retirement, put more weight on low-risk, fixed-income investments. If you have a 10 year or longer investment horizon, concentrate more on a diversified stock portfolio for greater returns over time.

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Posted by Ryan on July 18th, 2008 in Investment Strategy

Wouldn’t it be great to have invested in Google when it was worth $100 and sold it at its recent $700 peak, or Hansen Natural when it was worth pennies and watch it climb all the way to $67.

There are countless stories of people who scored a big one and made themselves overnight millionaires, and not just by purchasing and selling stocks. The same stories go for business opportunities and “get rich quick” schemes. A word of advice . . . don’t get yourself caught up in the thrill because you will get burned.

Some highly experienced, and consequently highly-leveraged, investors are capable of betting with margin accounts to make fortunes and high-yield returns. These people, have years of experience, training and specialty resources. They also tend to have high-highs and low-lows — one week they are on top of the world trading options, futures and other derivatives, and the next week they are flat broke and highly in debt.

Amateur investors who get caught up in the hype of being able to score big don’t last long though. All too often amateurs see an infomercial in the middle of the night that guarantees to make them millions in the foreign exchange market. The next day they spend a fortune to learn how to fund their account and minutes later they watch their entire life savings be wiped out, while the professional and institutional investors make their profits.

You know the old adage, “If it’s too good to be true, it probably is.” If you play this game, pouncing on the opportunity to earn unordinary high-yield profits, you may get lucky and win here and there. But you will loose more than you will win, and when you lose, you lose big. The odds are against you.

Everyone dreams of making a quick pile of money, and con-artists know that people become very vulnerable if you lead them to believe they can become rich quick. Be very wary of offers to receive immediate returns, such as 100% a week. Chances are you are getting caught up in a ponzi scheme or some other scam, which are quite prolific online these days. Although illegal in America, many of these web-based scams are hosted overseas and tough to track. Run away from offers like this. You’re better off putting your money on the roulette table where odds may not in your favor, but at least there are odds.

If you must give in to the temptation and take these risks, realize that it is a loosing bet and play with money that you intend to loose. Most money managers recommend that less than 10 percent of your funds should be invested in speculative stocks. Other types of high-yield investments should not consume more than one percent of assets.

Millionaire Money Habit: Don’t think about how much you can make, think about how much you are going to lose.

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