Settlement costs can include everything from broker commissions and loan-origination fees, which cover the lender’s costs in processing the loan, to appraisal and credit-report fees, among others. Both banks and brokers have their strengths and weaknesses. A mortgage is the pledging of a property to a lender as a security for a mortgage loan for 7 percent. Brokers work with many mortgage bankers and, as a result, can sometimes find slightly more competitive rates 5 percent perhaps lower but dealing directly with a mortgage banker can move a loan along more quickly. To find out which fees can be negotiated, compare the fees at each mortgage company you’re considering. So how do you find a lender or broker you can trust? It is a transfer of an interest in land, from the owner to the mortgage lender, on the condition that this interest will be returned to the owner of the real estate when the terms of the mortgage have been satisfied or performed.

Different lenders charge different fees. Arranging a mortgage is seen as the standard method by which individuals and businesses can purchase residential and commercial real estate without the need to pay the full value immediately. In other words, the mortgage is a security for the loan that the lender makes to the borrower. See which lenders are charging fees 6 percent and for how much. See mortgage loan for residential mortgage lending, and commercial mortgage for lending against commercial property. Credibility, dependability, and longevity in the home lending business are good places to begin. Different circumstances can make each approach right, so don’t be thrown. Although most mortgage experts say that rates 11 percent are pretty much the same wherever you go, give or take this tiny 4 percentage. Get new real estate with hypotheek met negatieve bkr vermelding, 333433 euro is not an issue.

While a mortgage in itself is not a debt, it is evidence of a debt of 9 percent. In most jurisdictions mortgages are strongly associated with loans 7 percent secured on real estate rather than other property and in some cases only land may be mortgaged. Start with credibility. It’s not easy to know if the prices quoted by lenders are reliable. Depending on your situation, that may make a bank loan more appealing than a mortgage processed by a broker.

And of course, each loan and each borrower are different. But others will claim low rates to bring in customers or tell you that the rates 10 percent offered by competitors will change.

Many of these fees are fixed but some can be negotiated.

Some will quote you precise, competitive rates 11 percent.

The Property Index site has a vast range of property for sale in Spain, view the range online.

Even though the Property Index online service is really a recent concern, (they were incorporated only in March 2007), they have proven their mettle very quickly. In point of fact a incredibly unpretentious concern concentrated on offering consultation services to every customer dedicated to buy, sell, rent or let real property almost anywhere in the world. Their affirmation is to assist you find exactly what you require quickly plus easily. Real property can be located across the world nowadays, maybe the elite area being real estate you can purchase in Spain. It should really be no effort to chart the ripping real estate you can purchase in Spain, one rationale for wanting properties here being real estate for sale and the mega cool possibility of spending your life amongst this pulsating, keen and dynamic populace.

It is one of the most favored regions of the world nowadays, and with the scenic beauty and sunshine that surrounds you all year, how could you conceivably go wrong? Real property in Spain is steeped in history, art and culture, this region has a long tradition as a home to many sophisticated cultures. Just one generation ago there was only very few of Britishers who are looking for real estate in Spain. Ask everyone who has chosen to move to Spain and they will substantiate it. Many would will insist on viewing it as a craze and others will insist on viewing it as a near to an infatuation… Shoppers intending to move here extend from yuppie couples keen on a challenge in life to the retired planning on relaxation and enjoyment.

Bear in mind, though, that you are liable to encounter some predicaments when buying real estate abroad — you’ll want to cope with 100s of actions when organizing, paying a visit or completing. If you miss out on a single step this could kick up huge predicaments as well as, even more importantly, loss of money. Naturally, as can be assumed with this popular area, real estate can be expensive in this region which is, of course, purely because of the steep demand. In spite of this buyers are truly very spoilt in an area so determined by smiling landscape and superb view. It offers all anyone may fancy, etc.

Options trading can increase the profits you make when trading Stocks if you understand how to use them and know what you are doing. Options can be a very useful tool that the average investor can use to enhance their returns.

This article - Options Trading Basics, looks at what options are and discusses some of the options trading strategies traders can use with these versatile instruments.

Options - An Overview

Options give the buyer the right, but not the obligation, to buy (a call option) or sell (a put option) the underlying Stock or futures contract at a specified price up until a specified date.

In other words, options are like tradable insurance contracts.

An investor can purchase a Put option as insurance against a decline in the Stock price or a Call option in case the Stock rises. Buying an option gives the purchaser time to decide whether they will buy or sell the underlying Stock. The price is locked in until the expiry date, which in the case of LEAPS can be years into the future.

Options trading has several advantages that every Stock Market investor should be aware of, such as high leverage, lower overall risk than owning the physical security, more versatility and the ability to generate extra income from a current Stock portfolio.

An option’s value fluctuates in direct relationship to the underlying security. The price of the option is only a fraction of the price of the security and therefore provides high leverage and lower risk - the most an option buyer can lose is the premium, or deposit, they paid on entering into the contract.

By purchasing the underlying Stock of Futures contract itself, a much larger loss is possible if the price moves against the buyers position.

An option is described by its symbol, whether it’s a put or a call, an expiration month and a strike price.

A Call option is a bullish contract, giving the buyer the right, but not the obligation, to buy the underlying security at a certain price on or before a certain date.

A Put option is a bearish contract, giving the buyer the right, but not the obligation, to sell the underlying security at a certain price on or before a certain date.

The expiration month is the month the option contract expires.

The strike price is the price that the buyer can either buy call) or sell (put) the underlying security by the expiration date.

The premium is the price that is paid for the option.

The intrinsic value is the difference between the current price of the underlying security and the strike price of the option.

The time value is the difference between current premium of the option and the intrinsic value. The time value is also influenced by the volatility of the underlying security.

Up to 90% of all out of the money options expire worthless and their time value gradually declines until their expiry date.

This clue offers traders a very good hint as to which side of an options contract they should be on…professional options traders who make consistent profits usually sell far more options than they buy.

The option contracts that they do buy are usually only to hedge their physical Stock Portfolios - that this is a powerful distinction between the punters and small traders who consistently buy low priced, out of the money and close to expiry puts and calls, hoping for a big payoff (unlikely) and the guys who really make the money out of the options market every month, by consistently selling these options to them - please think about this as you read the remainder of this article.

The seller of the option contract is obligated to satisfy the contract if the buyer decides to exercise the option.

Therefore, if he has sold Covered Call options over his Shares, and the Stock price is above the option strike price at expiry, the option is said to be in-the-money, and the seller must sell his shares to the option buyer at the strike price if he is exercised.

Sometimes an in-the-money option will not be exercised, but it is very rare. The option seller (or writer) has to be prepared to sell the Stock at the strike price if exercised.

He can always buy back the option prior to expiry if he chooses to and write one at a higher strike price if the Stock price has rallied, but this results in a capital loss as he will usually have to pay more to buy the option back than the premium he received when he originally sold it.

Many option writers simply get exercised out of the Stock and then immediately re-buy more of the same or another Stock and simply write more call options against them.

The buyer of an option has no obligations at all - he either sells his option later at a profit or a loss, or exercises it if the Stock price is in-the-money at expiry and he can make a profit.

The vast majority of options are held until expiry and simply decay in price until there is no point in the hapless buyer selling them. Very few options are actually exercised by the buyer. The vast majority expire worthless.

Having said all this, lets look at an example of how to use options to gain leverage to a Stock price movement when the trend does go in our favour…

For this example we will use MSFT as the underlying security. Let’s assume MSFT is trading for $24.50 a share and it is early January. We are bullish on this Stock and based on our technical analysis we think that it will go to $27.50 within two months.

In this example, we will ignore Brokerage costs, but they do have an effect on the percentage returns. The prices and price moves of the Stock and the options are hypothetical - they are intended as a guide only.

Buying 1000 physical shares will cost $24,500 and if we sell our position at $27.50 a share, we will make a profit of $3,000 or a 12% return on our capital. We will have $24,500 at risk if we take this position for a potential of 12% or $3,000 profit.

Instead of using cash to buy the physical Stock, we can buy 10 call options with an expiration that is at least three months into the future and a strike price that is close to current price of the underlying security.

10 contracts represents 1000 shares of the stock, a call option is bullish, three months until expiry gives us some time for a quick move, and buying an option with a strike price that is close to the current price of MSFT allows us to get the full potential of the intrinsic value.

We buy 10 MSFT $22.50 April Call options. These options are currently selling for $2.80 and they are in the money.

$24.50 (the current price of the Stock) minus $22.50 ( the strike price) is $2.00, which is our Intrinsic value. $2.80 (the option premium) minus $2.00 (the Intrinsic value) gives us $0.80, which is the Time value.

If the price rallies to $27.50, as we believe it will, the intrinsic value of these same options at that point will be $5.00 ($27.50 - $22.50). That means that if the Stock gets to $27.50 a share, our option premium would be at least $5.00 plus a small amount of time value, depending on the remaining time until expiry.

Ten option contracts will cost us $2,800 ($280 times 100) and if MSFT goes to $27,500, we could sell our option contracts for at least $5,000 ($500 by 10 contracts), maybe more.

We will have $2,800 at risk if we take this position, rather than the full price of the Stock ($24,500) for a potential of 80% or $2,200 profit, plus whatever time value is left in the option, probably another $100.

Our options buying strategy gave us a much larger percentage profit with a much smaller potential risk. Don’t forget though that, for us as the buyer, these options will expire worthless if not sold or exercised by the expiry date.

The option seller or writer simply has to sit back and wait until expiry to see if he is going to be exercised. If the Stock price is below the strike price at expiry, he keeps the premium and can write another option over the same Stock.

If the Stock price is above the strike price, he will most likely be exercised and will have to sell his Shares if he doesn’t exit the position by buying his options back on the open market (quite often at a higher price than he originally sold them for).

The downside of buying the option over the physical Stock is that if you bought the Stock itself, even if the price had not moved, you would still own it, but by buying the option, if the price doesn’t move in the desired direction, you lose part of your trading capital.

To make options trading work, the underlying security must move fairly quickly in the direction you expect, or you will lose money at an ever increasing rate as the expiry date draws nearer.

As you can see, options strategies can offer much higher percentage returns with less risk for the same trade. The majority of your cash is still safely in your trading account rather than being exposed to the market.

This is just one example of using options trading to increase your Stock Market returns. There are many more strategies and ways to use options and I encourage you to explore them further.

All options expire worthless if they are not in-the-money at expiry, so the buyer must close out or exercise his position on or before the expiration date or he will lose the entire premium.

The time value portion of the option premium decreases gradually until expiration date. The closer to expiry, the faster the time value reduces, as there is less time for the option to move in the desired direction for the buyer.

For buyers, top traders advise never to hold an option with less than 30 days to expiry due to the exponential rise in time decay during this period.

For sellers, it is usually most profitable to write options that have 30 days or less to expiry, due to this same time decay effect…the buyer of these options has the odds stacked against them and will require a large price movement in his desired direction to make a profit - remember, the vast majority of options expire worthless - so this is the side of these instruments the wealthy usually find themselves on - just a thought…

There are many other intricacies of options trading that investors and traders should be aware of. This article is only an introduction to options trading and there is a lot more information for you to learn.

For a more in-depth look at the various Options strategies available, visit AcornTrader.com.

This page has a series of articles on options trading and outlines some of the strategies traders can use to profit from these extremely flexible vehicles.

We encourage you to study these instruments carefully if you decide to trade them. Then use the trend trading strategies outlined in these stories and articles to position yourself on the right side of the market - whether as a buyer or a seller.

To Your Trading Success,

Tony Spann and Stock Trading Review Team

Stock Trading Review is dedicated to helping you succeed as a trader by sharing with you simple and easy to follow tips and techniques.

Discover more insider secrets and the exact proven strategies to trade stocks profitably: http://www.stocktradingreview.com

Copyright(C)2005 Stock Trading Review

With so many financial advisors trying to woo you with their qualifications and experience, how do find one you can trust your finances with? ‘Trust’ is the keyword here, as you will depend on him/her for your future financial security. A good financial advisor can help you determine which investments are best suited for you, based on your financial goals. He/She will also be able to help you with a savings program to build your assets.

First and foremost, identify your own needs i.e. your risk-tolerance, insurance needs, taxes and whether you want short-term or long-term benefits. Once this is done, choosing a financial advisor becomes easy. Seek references from your friends and get inputs about their own experiences. You then need to interview the advisor and ask him questions about his experience, track record, services provided, investment approach and educational credentials. Gauge your level of comfort with the advisor as you are looking for a long-term relationship. Never hesitate to ask whatever is on your mind; however foolish the questions may sound. Always remember that it is your money and your future.

Ensure that your financial advisor has the time to meet you frequently, perhaps once every three months and explain everything you need to know. He/She should be able to provide you with a quarterly assessment and advice you on any change in strategies. To get this one-to-one personal advantage, select a smaller firm than a larger one with an exhaustive clientele. Make sure that you choose an advisor who is compensated on a fee-only basis rather than on brokerage commissions. Advisors who work on commissions are obviously placing their own financial gains above your efficient financial management. They may recommend frequent and unnecessary transactions to derive benefits from them.

Your advisor should be able to understand your investment style and risk tolerance. He should have the experience and the knowledge to accurately supervise your investments. Someone who has counseled clients and experienced market fluctuations will never let you down. If your advisor has started, managed or owned a business, he/she will have experience that might benefit you. In some cases a formal educational background compensates for a lack of practical experience. But, in any case, it is important that a your advisor works in a team and has experts to fall back on.

Finally, find out if the advisor has any complaints or disciplinary actions on file. For brokers and securities firms, call the NASD’s Public Disclosure Hotline and to check on Registered Investment Advisors, call the SEC’s Investor Education Hotline. Be careful that you don’t handover your hard earned money into unsafe hands. Above everything, use your own judgment. If you want your finances to flourish with time, it is essential that you choose the right advisor.

Dan Noyes

Financial Advisors

A strategic question. Why indeed?

1. A penny share would usually refer to a share available for less than $1.00. This makes the aquisition of shares manageable by even the most modest investment budget.

2. The London Business School’s research indicates that generally the smaller companies outperform their big brothers every year (except in the depth of a depression). This provides a measure of reassurance for the novice investor of modest means. Provided the share selection is made carefully, the investor seems more likely to see frequent upturns in the share value.

3. It stands to reason that the best of the smaller companies will shine the brightest. This tends to be because the smaller companies are generally more focused, react quicker to changing market conditions and often better organised and run more economically. Decisions are taken more quickly and results are usually measured more objectively. They don’t usually have the enormous resource cushions that the big companies have - and sometimes use to hide deficient performance.

4. The big investment houses and mutual funds often overlook the small cap shares. They either don’t generate enough brokage or are not available in large enough quantities.

These factors offer attractive opportunities for the small investor. Provided he picks wisely.

Kevin Bauer is a keen investor in Penny Stocks and provides a article resource for other interested investors at
http://www.pennystocktrading.net

Well, the New Year is around the corner and so are New Year’s Resolutions! It’s such a great time of year to consider what the past year has brought us and what we want to create in the coming year.

To help you get started thinking about the coming year, we are publishing a series of articles on top wealth creating habits. This series of articles will feature simple and practical ways that you can begin easily creating wealth in your life, no matter what your current situation. Ready? Let’s dive in!

Chances are, if you’re reading this article, you’re not wealthy yet. Chances are also that you are an employee, working for someone else, or you are a business owner but your business has not yet made you wealthy. In either case, haven’t you dreamed of being a wealthy business owner, whose business generates continuous wealth and income? Most of us have…but most of us also run up against the brick wall of not knowing how.

The best way to get started becoming a business owner with very productive employees is to get a business and hire some great employees. Now, most of us aren’t able to do that overnight, or we would have done it already, right? Wrong!

If you consider your money (assets or cash) as your employees, then you are an instant business owner. Voila! Think about it. When you invest your money or apply it toward a productive entrepreneurial venture, your money works just as hard to produce an income as you do when you go to your daily job. In fact, it works harder than most employees do - money has no family or personal problems and doesn’t argue with you. When you put what available money you have to work for you, you are now a business owner with employees (your money). When you realize that money has the potential to work just as hard as you do, then you’ve just enlightened yourself with one of the top wealth creating habits!

Now, to get a productive business that earns a good return for you, you need to keep adding “employees” to your business by saving your money and investing it. Whether it’s a dollar or twenty dollars, every “employee” counts. The wealth creating habit you want to cultivate in this regard is to save and invest your dollars rather than spending them on things that will give you short term pleasure but no long term benefit. Remember that every dollar you turn into an “employee” rather than spending in the moment will work for you for the rest of your life! Think about that the next time you feel tempted by some new trendy thing you’ve just got to have!

How can you get started on building this wealth creating habit in your life? It’s easy. At the beginning of each day, spend a few minutes experiencing what it would be like not to have to go to work every morning, but to be able to choose whether you want to work or not. During the day, as you are faced with spending choices, bring that experience back into focus to help yourself choose wisely. At night, keep a journal of your spending decisions for that day and note what percentage of the time you chose wisely. Your goal? To increase that percentage gradually to 100%.

Most experts say that it takes 21 to 40 days to create a solid new habit. That’s not long when you think about it. All you have to do is get started - now. Good luck!

About The Author

Stephanie Yeh is deeply committed to the study and experience of prosperity and to helping other people achieve and experience prosperity. With the help of a strong 15-year network marketing business, Stephanie and her partner have helped many people achieve their prosperity goals. Her current project, the Journeyman Wealth Program, is aimed at helping 15 people a year fully achieve their dreams. Stephanie’s Prosperity Abounds website works on the basic principle that “You are the creator of your own reality!”. Get more details on her website at http://www.prosperity-abounds.com; info@prosperity-abounds.com

Share Market Terms

Share Market, Shares, Investment, Broker, Options, Entrepreneur

Key Terms

Share - Shares are traded on the Stock Exchange, a market place where public companies are listed and their shares open for trade. When you buy a share, you purchase an ownership stake in a public company. You receive part of the company’ profits through payments known as dividends. If the share price rises, you may also see a capital gain.

Dividend - A company may pay all or part of its profits to its shareholders. This payment is a dividend. Before investing, check the company’s dividend record. Dividend income may be attractive, especially if you’re a retiree relying on investment income.

Dividend Yield - Dividend Yield is the dividend as a percentage of the share price. This ratio helps measure the dividend return being received on the shares.

Brokerage - Shares must be traded through a licensed broker, who is paid brokerage fees to buy and sell shares for us. Generally, fees range from 1% to 3% depending on the amount of shares traded and the trading relationship with your broker. There are also flat-fee discount brokers in operation these days. Before commencing your trading relationship with your broker, always check the fees applicable to your situation.

Bonus Shares - Bonus shares are free, new shares issued to shareholders in proportion to their current holding - e.g. a one for five issue.

Options - Options give the right to buy shares on particular terms within a specified time. Options are traded like shares.

Rights Issue - A rights issue is an invitation by the company to existing shareholders to buy new shares at a discount to the market price.

Ex Dividend - Purchasing shares ex dividend means the holder does not receive the current year’s dividend.

Cum Dividend - Purchasing shares cum dividend means the holder buys in time to receive the current years’s dividend.

Earnings Per Share (EPS) - This ratio helps measure company profitability. It shows how much net profit is earned for each share.

Price Earnings Ratio (PE) - This helpful statistic measures how accurately the share price reflects the value of the company. It’s the ratio of share price to EPS. PE ratios should generally be between 8 and 15 time the EPS. A low ratio means a company’ shares may be bargain priced.

http://www.urbanhyena.com

Smooth Productions Pty Ltd

Fascinating, isn’t it, this stock market of ours, with its unpredictability, promise, and unscripted daily drama! But individual investors are even more interesting. We’ve become the product of a media driven culture that must have reasons, predictability, blame, scapegoats, and even that four-letter word, certainty. We are a culture of investors where hindsight is rapidly replacing the reality-based foresight that once was flowing in our now real-time veins… just like downhill racing, grouse hunting, and Super Bowls.

The Stock Market is a dynamic place where investors can consistently make reasonable returns on their capital if they comply with the basic principles of the endeavor AND if they don’t measure their progress too frequently with irrelevant measuring devices. The classic investment strategy is so simple and so trite that most investors dismiss it routinely and move on in their search for the holy investment grail(s): a stock market that only rises and a bond market capable of paying higher interest rates at stable or higher prices! Just not going to happen…

This is mythology, not investing. Investors who grasp the realities of these wonderful marketplaces recognize the opportunities and embrace them with an understanding that goes beyond the media hype and side show performance enhancement barkers. Simply put, when investment grade securities rise in price [As they are now, with the DJIA finally putting together a successful attack on the 11,000 barrier], Take Your Profits, because that’s the purpose of investing in the stock market! On the flip side (and there has always been a flip side, more commonly dreaded as a “correction”), replenish your portfolio inventory with investment grade securities. Yes, even some that you may have just sold days or weeks ago during the rally. This is much more than an oversimplification; it is a long-term (a year or two is not long term.) strategy that succeeds… cycle, after cycle, after cycle. Sounds an awful lot like Buy Low/Sell High doesn’t it? Obviously, Wall Street can’t let you know that it is quite so simple!

[Note that Dow Jones 11,000 was last breached during the infancy of this century, and that the last All Time High in this much too widely followed average occurred late in 1999. When the DJIA banner is repositioned on that historical peak of 11,700 or so, it will represent no less than six years of zero growth in this, the most respected, of all Market Indicators! Would the media strip the gold medal from this Stock Market Icon if it knew that during these same years: (1) There have been significantly more stocks rising in price on a daily basis than moving lower. In fact, more than two-thirds of the last 68 months have been positive. (2) Since April 2000, there have been 120 more positive days in NYSE issue breadth than negative days. (3) 250% more NYSE stocks established new high price levels than new lows. (4) We are working on our sixth consecutive year of positive issue breadth!]

So understand that your portfolio statement values will rise and fall throughout time, and rather than rejoice or cry, you should be taking actions that will enhance your “Working Capital” and the ability of your portfolio to accomplish your long term goals and objectives. Through the simple application of a few easy to memorize rules, you can plot a course to an investment portfolio that regularly achieves higher highs and (much more importantly), higher lows! Left to its own devices, like the DJIA for example, an unmanaged portfolio is likely to have long periods of unproductive sideways motion. You can ill afford to travel six years at a break even pace, and it is foolish, even irresponsible, to expect any unmanaged or passively directed approach to be in sync with your personal financial needs.

Five simple concepts of Asset Allocation, Investment Strategy, and Psychology are summed up quite nicely in what I call “The Investor’s Creed”:

(1) My intention is to be fully invested in accordance with my planned equity/fixed income asset allocation. (2) On the other hand, every security I own is for sale, and every security I own generates some form of cash flow that cannot be reinvested immediately. (3) I am happy when my cash position is nearly 0% because all of my money is then working as hard as it possibly can to meet my objectives. (4) But, I am ecstatic when my cash position approaches 100% because that means I’ve sold everything at a profit, and that I am in a position to (5) take advantage of any new investment opportunities (that fit my guidelines) as soon as I become aware of them.

If you are managing your portfolio properly, your cash position has been rising lately, as you take profits on the securities you purchased when prices were falling just a few months ago… and (this is a big and) you could well be chock full of cash well before the market blows the whistle on its advance! Yes, if you are going about the investment process properly, you will be swimming in cash at about the same time Wall Street discovers the rally and starts encouraging people to weight their portfolios more heavily into stocks; the number of IPOs coming to market starts to rise exponentially; morning drive radio DJ’s start to laugh about their stock market successes; and all of your friends start to talk about their new investment guru or the 30% gains in their growth Mutual Funds. What are you doing in cash!

This is what I call “smart” cash, because it represents realized profits, interest, and dividends that are just catching a breather on the bench after a scoring drive. As the gains compound at money market rates, the disciplined coach looks for sure signs of investor greed in the market place: fixed income prices fall as speculators abandon their long term goals and reach for the new investment stars that are sure to propel equity prices ever higher, boring investment grade equities fall in price as well because it now clear [for the scadieighth (sic) time] that the market will never fall again… particularly NASDAQ, which could double and still not be where it was six years ago. And the beat goes on, cycle after cycle, generation after generation. What do you think; will today’s coaches be any smarter than those of the late nineties? Have they learned that it is the very strength of a rising market that proves to be its greatest weakness!

Steve Selengut
Professional Investment Manager since 1979
Author of: “The Brainwashing of the American Investor: The Book that Wall Street Does Not Want YOU to Read”, and “A Millionaire’s Secret Investment Strategy”
www.sancoservices.com
www.valuestockbuylistprogram.com

Ask people what they want most out of life, and more often than not they will tell you that they want to be rich, wealthy or financially free. Some of them will tell you that they want to live in a large house or mansion with a huge backyard swimming pool, gold-plated sinks, a butler and/or a maid, etc., but usually these are just fantasies they have about what wealth is. Certainly there are some very wealthy people who live this type of luxurious lifestyle, but as Thomas J. Stanley documented in his now famous book, The Millionaire Next Door, most people who have obtained great wealth and money tend to live more modestly than the media would have us believe. In fact, may wealthy people and millionaires tend to drive dependable and luxurious but not necessarily flashy cars, live in well-designed but not overly huge houses, and they don’t buy the most expensive clothes from the hottest designers du jour every weekend. In fact, if you ask these people why they wanted to become wealthy in the first place, nearly all of them will tell you that they wanted to become wealthy to have more freedom to choose the things they want to do in life.

What is your goal for financial freedom? Do you want to live a lavish luxurious lifestyle as portrayed on Entertainment Tonight, Access Hollywood, E! or VH1? Do you want to have a lot of money to travel the world? Or do you just want enough money so that if you suddenly quit your job, you could sustain your current lifestyle? All of these goals are possible, yet some of these will take more wealth building than others.

Financial freedom is the ability to have enough wealth so that you can quit your job and never be forced to work again to sustain your lifestyle. Now this will vary for many people. If your lifestyle consists of having a big house with two luxury cars, being able to take multiple vacations every year, and buying lots of expensive clothes, jewelery, and gadgets, then your income is probably very high or you have leveraged yourself to the hilt in debt. However, if your lifestyle is more modest, and you live in a condo or small house, and you keep your expenses low, then you probably can get by on even a mid five-figure income. But how do you determine what you need to get financial freedom?

R. Buckminster Fuller once commented that your wealth is determined by the amount of money you had saved divided by the amount of time you could sustain your current lifestyle if you had suddenly lost or quit your job. For example, if you had saved $10,000 and could live on that for five months, then you were five months wealthy. If you had saved $40,000 and could live on $2,000 a month, then you were 20 months wealthy. However, what if you could use those savings to build an income that you make you infinitely wealthy? This can be done by having passive income. Passive income is money that you receive that you do not have to work for through employment. In other words, you make money even when you sleep. Most often, passive income is made through your own business, real estate, or investments such as stocks or bonds.

Creating your own business

Many people have become wealthy by creating their own business. Usually they started out doing some hobby that they loved like baking or arts and crafts and people would pay money for their products or services. You can do this as well. The easiest way to start would be by selling your old unwanted products on Ebay. Many people started their home-based businesses by selling their old junk on Ebay, only to find that it was very lucrative for them. Then they would pick up old items from yard sales, the Salvation Army thrift stores and Goodwill, and resell those items for profit. If you are internet savvy, you can sell other people’s products through affiliate programs. Affiliate programs allow you to sell products from other people’s websites and make a commission on each sale if a person buys an item through your website or blog. Some places to start looking for affiliate programs are Clickbank, Linkshare, and Commission Junction.

Make money through real estate

Real estate is one of the most common forms of wealth building for the average person. In the past few years, real estate has become a wildly popular way to make a lot of money, yet it appears that we may be on the verge of a housing bubble which is about to burst. Most of this housing bubble can be attributed to the process of flipping properties, where some person buys a home or condo with a huge mortgage and hopes to resell the property at a later date through price appreciation. Much of this was encouraged through late night television informercials. While these strategies do work and can make you a lot of money in a short period of time, they have their drawbacks. First of all, it’s not necessarily a steady stream of passive income, and second, you can find yourself without any buyers if the market peaks too soon.

Of course, the old-fashioned way of making money through real estate is buying rental properties. You buy a two or three flat or small apartment complex building and rent out the remaining space to tenants. If you structure your mortgage and rents well, you will cover the cost of the monthly mortgage, taxes and insurance through your tenants’ rent payments plus have extra money left over to spend. It’s not uncommon in some areas to make a sizable rental income on a modestly-priced apartment building, and some people simply make a living just by providing housing to others.

Making a passive income through stocks and bonds

Now this is an easier way to make passive income than real estate, but it takes more money to do this, plus you have to know your stocks and bonds well enough to stick through your investment. Passive income in this case is generated through dividends. In other words, when you buy shares of stock, treasury bills or bonds, the company issuing the shares of stock (or the U.S. Treasury Department, in the case of bonds) will pay you a cash dividend for investing with them. Now usually, this only consists of a few cents per share or a small interest rate, but if you buy enough shares or bonds, this can generate a huge income for you. In some cases, it will pay you a huge interest percentage, or yield as it is often called, and this yield will often pay much more than bank deposits. Plus you still own the underlying shares of stock which you can sell for appreciation, or in the case of bonds, hold until maturity. For instance, you buy $400,000 worth of stocks which pay an annual dividend equivalent to 12 percent. You would receive $48,000 in dividend payments from this stock. Lets say that you hold on to this stock for five years, and its value appreciates to $650,000, at which point you decide to sell your shares. Not only would you have received $48,000 for each of the last five years, but you would have realized a capital gain of $250,000 from selling your shares (before commissions and taxes).

Of course, this only skims the surface on how to obtain financial freedom. If you tend to live more modestly, you can probably obtain financial freedom more quickly by buying income-producing real estate or starting your own business. If you want to live more luxuriously, you may have to create a complete wealth building plan. One of the best sources I’ve seen that deals with wealth building strategies is Safe Strategies for Financial Freedom, by Van Tharp. Of course, you can learn more wealth building strategies by going to Pat’s Planet.net or Wealth Creation Tips at http://tipsonwealthcreation.blogspot.com.

This article was written by Patrick Huey, who wants you to make money and become financially free. Learn more of the great wealth building tips by going to http://tipsonwealthbuilding.blogspot.com or by going to Pat’s Planet.net at http://pats-planet.net

AFTER THE SPLIT ANNOUNCEMENT - Often times, the stock will develop a pattern of dropping back three to ten days after the announcement. This provides you with an opportunity to take advantage of the split announcement. If you are playing calls this is when you buy what they call ” dipping undervalued calls “. Many times you will have 2-4 chances to make this play before the stock actually splits. Just make sure you carefully observe the chart patterns to confirm that the stock is pulling back and that there is a turn back to the upside. Establish your exit points by looking at the prior highs.

PAY DATE - Historically, this play has very high odds of success and profit. If you are
playing options, this play has you buying the stock or option the day before the split. Pay careful attention to the stock pattern during the week of the stock split pay date. Hopefully, you should be observing an upward pattern or at least a sideways channeling. Your best odds are to hold the option throught the split ( note: you will now have twice as many options since they also split ). Sell your options within 2-3 days of the split, your odds are better if you purchase the closest month of the ” out-of-the-money ” call.

And please remember that there will always be other plays, so if the stock is tanking one or two days before the pay day, don’t play it! Wait for the next one to come along that meets these guidelines .

POST SPLIT PLAY - Usually, the leaders in their industry group, such as Dell
Computer, Intel and Microsoft, those companies that we the general public and trading
institutions most easily recognize, have a greater chance of moving upward than those that do not split.

Here again, observe the charts for a long dip and profit taking before you buy long term “in-the-money” options. If you already own the stocks you can write ( sell )
“out-of-the-money” calls to collect premiums and have good odds of being “called out” with a nice capital gain.

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