Investment management is a professional service which helps individuals and corporate entities handle their various securities holdings while trying to achieve specific financial goals through investment and savings.  Investment management can refer to both individualized management of securities or collective management of securities for cooperative financial instruments.  Cooperative financial instruments can include mutual funds, exchange traded funds, or even some large pension funds.  

Investment management professionals may specialize in some of the following areas:

1. Managers of collective or cooperative instruments.

2. Advisory or discretionary investment management, who typically work with high net worth individuals, providing specific advice for their large portfolios.  

3. Commercial investment management professionals, who work for large banks, helping both corporate and private clients manage their investment funds.

Understanding the process of investment management can greatly enhance how you select an investment manager that is right for you.  The following is a breakdown of how an investment manager can help the management of your assets:

1. Determining investment objectives and restrictions.  Your investment manager will work with you to understand what you want want to achieve through your investments and the restrictions you may face.  

2. Your investment manager will then work with you to determine what mix of financial instruments you should invest in, particularly to diversify your holdings to protect and make best use of your finances.  This step can vary greatly depending on the investing philosophy of the manager and the risks you are willing to make.

3. The investment manager will then actively seek out the stocks, bonds, and derivatives that compliment your investment strategy.  Securities can fluctuate greatly, so the type of investments may change depending when you are entering the market or the potential changes that may occur.

4. Once your plan is set and the proper instruments chosen, the investment manager will actively put your portfolio into effect, purchasing and trading for the correct mix of securities needed to create your investment portfolio.

5. From time to time, your portfolio will need to be modified, expanded, or contracted depending on changes in the market or changes in your financial situation.

When searching for investment management firms, it is important that you find one that has professionals that can meet your needs and has experience with other similar clients.

1. Look for investment management firms in banking listings, which can be found through banking institutions or even on the internet.  

2. Seek recommendations from similarly situated people or corporations who have used investment managers in the past.  Listen intently on the type of service they provide and whether they were happy with the service provided.

3.  Check with regulatory agencies, such as the SEC or FINRA, to determine if an investment manager has any complaints or investigations against them.  Avoid any investment management firm that has acted improperly in the past.  

Every investor should diversify their investments to manage risk.  This means investing in various assets across markets as well as different assets within the market and reducing the amount of investment in one asset to invest in another.

Hedging and diversifying are both risk management strategies in investing portfolios but have significant differences.  For one, hedging allows profitable investments to be leveraged against negative assets thus having the profitable assets compensate for losses on riskier investments.  Having insurance would be one example of hedging against a possible risk.  Diversifying is different in that the amount in an investment is reduced to purchase another investment, thus spreading risks through multiple investments.

For instance, in diversifying:

You own 50,000 shares of Stock A valued at $1 per share, for a total value of $50,000.

To diversify, you sell 20,000 shares of Stock A and use the $20,000 proceeds to buy shares in Stock B and C.  Stock B is valued at $2 a share and you buy 5,000 shares.  Stock C is valued at $.50 and you buy 20,000 shares.

You now have a diversified portfolio that manages risk by splitting the investments into three assets that will gain and lose value independent of each other.  Hedging compensates for risk through the sale of stocks from competitors or other relatively risk-free investments.

The simplest way to diversify is to buy other stocks strategically.  You will generally want to avoid stocks in an industry similar to the primary investment as losses generally spread through an industry as a result of news affecting the entire industry.  It is unlikely that all stocks in a diversified portfolio will fall but one single stock or stocks invested heavily in a specific industry possess significant risk for the typical investor.  It will sometimes be best to see the aid of a financial advisor if there are familiar with stocks that they can invest in to diversify their portfolio.  The financial advisor will also be able to determine “risk parity,” which is the comparative risk of all assets in the portfolio and suggest ways to improve parity to the benefit of the client.

Many studies have proven conclusively that most portfolios with multiple, diverse assets faced a lower standard deviation in annual returns, reflecting the relative stability diversity provides.  The more stocks in a diversified portfolio, the lesser the impact of the stock, negative or positive, on the overall portfolio.  Diversification of assets is almost certainly one of the best ways to manage risks outside of hedging, which will usually require the time and expertise of a financial advisor.

All investing carries risk and one should only invest when they understand these risks and have knowledge on their investment.  If the prospective investor cannot identify company or industry then there is no hope that the investor will be able to make an informed and ration investing decision.

Yield to maturity, also known as the redemption yield of a bond, is the internal rate of a return that an investor will receive upon the maturity of a privately or government issued bond.  A bond is a debt security where the  authorized issuer owes the holder a debt.  Unlike stocks–which are equity–and give the shareholder a stake in the institution, bonds are treated like a debtor/creditor relationship where the debtor is the institution selling the bond and the creditor is the individual who purchased the bond.  A bond does not give the debtor any interest in the institution, but instead, obligates the debtor (issuing institution) to pay the creditor (holder) interest, in the form of a coupon, until the bond reaches its maturity.

Yield to maturity is calculated by an A.P.R. (annual percentage rate) but the interest is actually dispersed in a semi-annual basis in which the debtor will receive a coupon, consisting of the percentage of the face amount plus interest.  For example, if a 10 year bond is sold with a face amount of $100 at 10% Yield to Maturity that means that every 6 months the debtor will receive a coupon of $5.50 (The $100 face amount + $10 (the interest accumulated over the 10 year life of the bond) / 24 (the number of coupons that are distributed over the 10 year period).

When looking at bonds you will want to know the basics defining certain aspects of a bond:

FACE AMOUNT: The amount that the bond is worth on its face.

ISSUE PRICE: Is the amount of money that the debtor pays for the bond.  The issue price is not necessarily the amount that the bond is equal to.  Often bonds are sold at a discount where a debtor will buy a $100 bond for $75.  Upon maturity the debtor will receive $100 plus interest.

MATURITY DATE: This is the amount of time it will take for the bond to mature to the face amount.  Bonds that have a maturity date of less than one year are not necessarily bonds and are referred to as Money Market Securities

COUPON: This is the amount that the debtor will receive on a semi-annual or annual basis, depending on the bond, The Coupon signifies the payment of the creditor to the debtor in compliance with the bond agreement.

Yield to maturity rates depend on a number of factors including the current market rates, the term length and the overall creditworthiness of the issuer.  Typically the longer the bond maturity length the higher the yield to maturity will be.  On the same note, the more stable the issuer the less the yield to maturity rate will be.  United State Treasury Bonds are considered to be one of, if not the most, stable bond an investor can purchase.  The return on your investment is practically guaranteed and for that reason the coupon amount and the yield to maturity will be lower.

The following example is based on preexisting FOREX Rates that are no longer applicable to current day; this example explores the facilitation of currency exchange with regard to variance and fluctuation of FOREX Rates:

FOREX Rates Timeline (Example #1)

•    On February 15th, 2005, an American individual moved to China subsequent the transfer of employment

•    On the day of arrival, that individual wished to exchange their respective currency, the United States Dollar (USD) for the currency utilized in China; this currency is known as the Chinese Yuan (CNY)

•    The FOREX Rates applicable to the United States Dollar and the Chinese Yuan were as follows; every 1 United States Dollar was equivalent to 8.28 Chinese Yuan – for the sake of argument, we will assume that the FOREX Rate was simply 1 USD = 8 CNY

•    The American individual exchanged 100 United States Dollars and received 800 CNY in return; we will also assume that the individual engaged in commercial activity utilizing only the Chinese Yuan

•    On February 8th, 2011, the American individual planned on returning to the United States of America; prior to their return, they wished to exchange the remainder of the Chinese Yuan in their possession for United States Dollars, as Chinese Yuan are not accepted in the United States

•    FOREX Rates applicable to the USD with regard to the CNY were as follows; every one United States Dollar was equivalent to 6.52 Chinese Yuan – for argument’s sake, we will assume that the FOREX Rate was 1 USD = 6 CNY

•    The individual intended on exchanging the 800 CNY with which they had  begun their stay in China with hopes of receiving 100 USD in return; however, due to the fluctuation of FOREX Rates, the individual returned to the United States with more than the original 100 USD – because 600 CNY were equivalent to 100 USD, the remaining 200 CNY rendered a profit for that individual

FOREX Rates and Trading

FOREX Rates can be implemented for commercial purposes in addition to instruments reserved for international travel; through the use of FOREX Markets, or Foreign Exchange Markets, trade and exchange activities may be undertaken with the hope of earning gains with regard to increase displayed by certain FOREX Rates in conjunction with foreign currency. Similar to the stock market, which operates on a valuation system that allows for decreased purchase price with regard to stocks decreasing in valuation, FOREX Rates apply to the behavior and trends implicit within the FOREX Market.

Investing is the general term for placing money, or assets, in a fund, or program, in order to realize a return. Investing is a very broad term and can include stocks, bonds, real estate, mutual funds, and a number of others. When you are considering entering into the investment market it may seem complex and; to an unskilled, or novice, investor, be a form of gambling.

Stocks are essentially part ownership in a company. The company can be either privately or publicly owned and is a great investment for those who are skilled in investing. Stock takes on many different forms and some include voting rights while others include dividends and other perks. When you invest in a stock your value in the stock will increase or decrease depending on the fluctuations of the companies value.  Investing in stocks can be somewhat risky.  You have many options when doing so.  You can go to a skilled traditional broker who will be a “mentor” in guiding you along your investment strategy.  These, however, are expensive.  You can also use discount brokers, often through online resources, to invest directly.  They are inexpensive but give no real advice and is more of a “do it yourself” form of investing.  

A bond is different from a stock in that a bond gives the investor no ownership in the company. A bond acts more like a debt owed than anything else. When a company, or government entity needs to raise capital they will often sell bonds to investors. The bond allows for the company, or government, to raise money with the requirement that they pay the investor interest that will accumulate over the period of the bond. A bond can be short term or long term and the return on the investment, unlike stocks which can be risky, is relatively fixed and is a great form of long term, stable investing. Investing in government issued bonds are one of, if not the most, stable forms of investing and you will be virtually guaranteed to benefit. The disadvantage of bonds is that the rate of return is low, usually around 5% of the initial investment.

A mutual fund is the pooling of money into an investment fund that focuses on investing in certain stocks, bonds, and commodities. Mutual funds, unlike stocks and bonds, are not directly purchased by the investor. In a mutual fund the investor will give capital to a mutual fund. The fund manager will then take all the pooled money from all the investors and purchase stocks, bonds, commodities, etc. that are in line with the mutual funds investment strategy. You can get involved with mutual funds that focus primarily on energy stocks, entertainment stocks, or a number of other specialized industries. Mutual funds are often the easiest and most stable forms of investing because you are taking all the decision making out of your own hands and entrusting a specialist to diversify and invest.  

Another form of investing is in Real Estate.  Real estate investing, unlike in the past, is now considered very specific and there is a high risk of loss associated with it.  Because of the housing crisis and the great recession, housing prices are at their lowest levels in 31 years and you can often get a 30 year mortgage for around 4% annual interest.  The advantages of investing in real estate is that housing is normally a stable investment and it can be done individually or with others in the form of joint tenancies and tenancies in common.  The disadvantages associated with real estate investment is that you risk losing the value in your property yet still have to make mortgage payments.  Your investment is based on the idea that when you sell the property you will recoup, not only the price you paid, but the interest and still come out with a significant gain.  Disadvantages may include that the selling of real estate will be subject to capital gains as well as property taxes and compliance with municipal, state, and federal laws when it comes to landlord/tenants. 

When you are investing in real estate you will want to do your research.  Look at the community that you will be investing in.  Is it a growing community, is their easy access to urban/business districts, what is the condition of the property, are there liens or covenants involved.  Because investing in real estate is such an expensive endeavor you may also want to discuss pooling assets with other for joint ventures.  

While certain FOREX Trading Strategies may focus on individual currencies maintaining higher exchange rates, alternate FOREX Trading Strategies may promote for the individual acquisition of currency undergoing a decline in valuation– this is suggested with hopes of receiving a larger return subsequent to an eventual, increased exchange rate.

Types of FOREX Trading Strategies

Within the realm of international finance, FOREX Trading Strategies exist in tandem with the valuation of different currency and monetary systems are subject to fluctuation. This fluctuation in value, which typically illustrates a variance in trends or behaviors in which circulated currency belonging to an individual country or nation may result in a multitude of results.

Activity taking place within this trading market drastically affects currency exchange rates – this is due to the fact that an overhaul of purchases of specific currencies may result in an increase in valuation. The Following FOREX Trading Strategies are commonly employed within the FOREX Trading Market:

Fundamental FOREX Trading Strategies

The economy of individual countries is considered to be a primary determinant – as well as an indicator – of the trends latent within Foreign Exchange Rates; furthermore, the financial stability latent within the respective economies of nations, the rate of production with regard to an individual import and export industry is crucial in the establishment of Currency Exchange rates.

Technical FOREX Trading Strategies

Analysis of trends with regard to FOREX rates are FOREX Trading Strategies that are considered to becontingent upon the assessment of valuation latent within the stasis of individual monetary systems; currency illustrating noticeable increases resulting from catalysts – ranging from a stimulated economy to financial prosperity –may provide for the notice of observable trends and behavior of an individual currency system

FOREX Futures

FOREX Futures are FOREX Trading Strategies that may be undertakenwith regard to anticipated participationin prearranged trading activity; these types of FOREX Trading Strategies require the parties involved to reconvene at a future date – the conditions and results of that exchange activity is subject to applicable valuation of that future date.

Fixed-rate FOREX Trading Strategies involve the implementation of activity involving the trade and exchange of currency; however, in contrast to alternate FOREX Trading Strategies, the trade and exchange of currency is limited to those with a fixed rate of valuation – this means that the value of the individual Fixed-rate currency will not fluctuate, despite peripheral activity or dynamic.

Hedged FOREX Trading Strategies involve the trade and exchange of various forms of currency systems with the hopes of balancing multiple investments while subsequently weighing their innate risk of gain or loss with regard to a collective and anticipated gain.

The FAFSA form, or Free Application for Federal Student Aide may be downloaded and printed from the United States Department of Education website by going to www.fafsa.ed.gov.  The FAFSA form is a free application created by the United States Department of Education that allows the federal government to assess whether or not an applicant for student aid, either in the form of grants or loans, is eligible to recieve funding from the United States government for their education.  The FAFSA form is used for all forms of funding for post-secondary education including: bachelors degrees, masters degrees, juris doctors, among others.

The FAFSA form will require you to input information including your income,and if you are a dependent, your families income; the cost of attendance of the educational institution; your status as a full time or part time student; and whether you will be attending post-secondary education for the whole year or on a semester basis. 

By filling out the FAFSA form, the department of education will properly be able to assess your need based on your, and your families, income. The eligibility under FAFSA will also analyze your expected family contribution which is calculated based on the number of current college students in the household, household income, and your families net assets (not including 401ks).

One exception to requiring a certain need to qualify for funding under the federal loans through FAFSA is if you are a child of a member of the armed forces who has fought, and died, in either the war in Iraq or Afghanistan. This is limited to individuals who were 24 or younger at the time of their parents death and that death occurred during those conflicts at or after September 11, 2001.

In its current form, a FAFSA form will consist of 130 questions based on the student and families income and dependency. None of the questions address the issue of race, religion, or any other aspect that may be considered to insinuate any other motive other than need based.

Your FAFSA form will allow you to apply for numerous kinds of loans and grants that are funded by the federal government.  These include Pell Grants, Perkins Loans, Stafford Loans, and Federal Work Study programs.

The Pell Grant A Pell Grant is a government grant furnished by the United States Department of Education that helps students who could not normally afford the luxury of a secondary education, the opportunity to attend college or, in some cases, post-bachelors degree education.  The federal Pell Grant helps 5.4 million individuals pay for college every year through the United States Department of education, which allots $17 billion a year towards the funding of Pell Grants.

Prior to the 2011 amendmentsfPell Grants would issuie a maximum of $5,550 dollars per student. As of the 2011 amendments a student who meets the hardship requirements and is given Pell Grants may receive $4,705.  The amendment stripped funding from the department of education by $5.7 billion and due to that there has been a decrease in per student funding of $845 per student, with some students losing their status altogether.  

If the funding from a Pell Grant is not enough to meet your education requirements you may also use your FAFSA form to apply for Stafford loans.

Stafford loans are loans that are sponsored by the federal government through lending institutions.  The way they work is that you apply for a loan, through FAFSA, and upon your approval you will be allotted a certain amount of funds for you education.  The benefit of taking Stafford loans is that they are guaranteed by the federal government .  In that way the lending institution is going to allow you a lower interest rate because you are backed by the United States government, which is as close to a guarantee of repayment as anything.  

There are two main types of Stafford loans. The first are subsidized and the second are not. The subsidized loans are the first type you will want to get from the federal government’s department of education, through Sallie Mae. The amount that will be allotted per student through subsidized loans is low, but usually allows around $12,000 per year. The benefit of these loans is that they do not garner interest until the completion of your education.  Federal Stafford Loans are subsidized in that the interest that accumulates while you are pursuing your education is payed for by the federal government.  or example, if you borrow $36,000 over 3 years for your college education starting in 2011 you will not be charged interest for the school years ending in 2012, 2013, and 2014., but upon your graduation in 2014, or if you leave your educational institution before graduation, then your interest will start accumulating immediately.

In contrast, unsubsidized Stafford oans through the federal governments department of education will begin accumulating interest upon the time that your loans are dispersed to you. Because of this reason it is always beneficial for students to avoid unsubsidized loans through either the federal government department of education or through a private lending institution.  

The interest rates that are associated with stafford loans are relatively low.  Due to the guarantee of repayment by the federal government a lending institution will charge a lower interest rate and the loan is almost guaranteed to be granted if you meet the requirements.  Under c.urrent regulations the annual percentage rate of interest for a federal subsidized stafford loan is 6.6% annual interest for those students who are enrolled in higher education for at least half time.  This is going to change under the 2011 amendments under the Budget Control Act of 2011.  Under the Budget Control Act new, starting in July 2012, interest rates for both federally subsidized and unsubsidized stafford loans will be fixed at 6.8% annual interest.  In addition, under the Budget Control Act, individuals who are seeking graduate or professional degrees will be ineligible for subsidized loans as of July 1, 2012.

Upon the completion of your education you will be required to repay your stafford loans.  Upon graduation, or dropping below half-time, you will be allotted an initial deferment of 6 months.  This is called the grace period.  During the grace period you will not be required to begin repaying your loans, however, the interest upon your loans, even those that are subsidized will begin to take effect.  Once your 6 month grace period is over you will be required to start paying monthly installments to satisfy your loans.  The default standard is repayment over a 10 year period.  This may be altered upon request and many times you will be permitted to stretch your repayment period up to 30 years.  Granted, you will end up paying more in the long run but it is beneficial for those individuals right out of college who are not making a high salary.  Once the grace period is over you must begin repaying your stafford loan.  Failure to do so will put you in default and prevent you from receiving future government loans and severely damage your credit.  If you are in a situation where it is impossible for you to make payment then you may apply to the federal government for a deferment based on hardship.

In addition to applying for a Pell Grant and Stafford Loans through the federal government you will also want to use your FAFSA form to apply for a Perkins Loan.  A Perkins Loan operates in much the same way as a Federally subsidized stafford loan in that it is a subsidized loan guaranteed by the federal government.  The difference is that where a stafford loan operates by going through a private lending institution to gather funding for the loan, a Perkins Loan takes its funding directly from your educational institution.  So the federal government is borrowing money from your university and guaranteeing repayment upon graduation, or the dropping of the student from at least half time status.  Federal Perkins loans have an interest rate of 5% per year that begins to accumulate at the time of graduation, or dropping below half time registration.  Prior to that the federal government, through the department of education, will pay the interest on the loan.  A Perkins Loan, through completion and approval of a FAFSA form, will guarantee an undergraduate student as much as $5,500 per year with a lifetime allowance of $27,500; and post-graduate, and professional, students up to $8,000 per year with a lifetime allowance of $60,000.  The default provision for a Perkins loan is that the loan will be repaid over the course of 10 years but that may be altered upon request to a longer period of time with lower payment plans.  Be wary of doing this because, just like stafford loans, the longer the period of payment the more total money you will be repaying due to interest accumulation.  Perkins, loans also allow a 9 month grace period upon the completion of a degree, or falling below half time status.  

In addition to loans and grants a student may apply for federal work study programs through their FAFSA form.  Federal work study is a form of federal aide that allows a student to work in the community or in their field of study part time in conjunction with their education to help pay for their education.  Through the FAFSA form a student who meets the financial needs requirements may be placed in a federal work study program in which the federal government will pay up to 75% of the salary that the student garners through their work study program.  In this way, many educational institutions open up work study positions to students where, under normal situations, they would be offered to others for lower pay.  Many educational institutions require that a student maintain a certain grade point average in order to be eligible for federal work study programs.  If that students grade point average falls below a certain amount they may lose their eligibility for that semester, school year, or for the remainder of their time at that educational institution.

A prudent applicant using a FAFSA form should apply for all forms of student loans and grants, if applicable.  If accepted for all you should only accept funding on a need based analysis and pick which funding is best for you.  If offered you should always accept a Pell Grant.  If you need loans you should order them in the following way:  Federal Perkins Loan, Federal Subsidized Stafford Loan, and, only if you need it, Federal Unsubsidized Stafford loan.  By looking at the interest rates, repayment dates, and the interest accrual of each loan you will understand better why this is the appropriate way to go about accepting funding through FAFSA.

How to fill out my FAFSA application

When filling out your FAFSA form you will need to gather a number of documents and information including financial documents and identifiication.

The first section of the FAFSA form will be about your identification.   You should have all information dealing with your identity at hand.  This includes your social security number, state of residence, driver’s license information, educational institution, and marital status.

In the second section of the FAFSA will deal with your dependency status.  If you are claimed as a dependent of your parents or another, whether you have dependents and what your income is.

The third section of the FAFSA form will deal with your parents financial status.  This is , of course, of you are being claimed as a dependent by your parents.  You will nee financial information on your parents as far as income tax returns, assets, the number of dependents they have and how many of them are enrolled in higher education.  

The fourth part of the FAFSA application will deal with your financial status.  If you are claiming youself as an independent, head of household or other non-dependency status you will need to include financial information assessing this.  This includes the number of dependents you are claiming, your income, assets, marital status, are you the head of household, etc.

Finally, once your FAFSA application is complete you will either mail or submit the FAFSA application online.  Most universities require that FAFSA applications be received between March 1st of May 1st prior to the school year that the applicant is applying for.  The federal cutoff for FAFSA applications to be submitted is June 1st.  

One of the biggest issues that surround peoples thoughts is how to make money.  Whether you are poor, middle class, or wealthy the idea of increasing your wealth is something that every individual is interested in.  Making money is not exclusively within the realm of your income; however, the more income your family has the more opportunity you have to increase your wealth.  However, any financial adviser will tell you that the salary from your job should not be considered your income.  Your salary from your job should be a tool in making your income.

The first step in how to make money is to eliminate your unnecessary debt.  This includes credit cards, unnecessary luxury items, and any other debts that you can live without.  Paying off your credit cards should be your first step in how to make money.  If you have a balance on your credit card of $3,500 you can expect a monthly interest fee of between $50 – $75.  If you  have any hopes of increasing your wealth it is imperative that you eliminate this debt.  The interest rates that you are charged on a credit card are higher than any other interest rate that you will be subjected to and finding an asset that will counteract that interest is slim.  

When first learning how to make money it should be your number one job to eliminate this expense.  Every month you get a statement you should make it your job to pay the monthly interest rate and, in addition, pay down your debt in a way that is reasonable for you and will allow you to pay down your debt within a reasonable period of time.  

In addition, you will want to eliminate any unnecessary luxury items.  Most millionaires did not become that way by driving the newest model car.  Millionaires mad their wealth by driving used Toyota Camry’s and using the money they saved from the difference to invest in interest bearing, lucrative investments.  If you are leasing an expensive automobile; unless you need it for your job, such as sales, then you should consider ending your lease at the nearest opportunity and opting for a moderately priced, reliable, vehicle.  

It is the elimination of these unnecessary debts that will allow you to garner the extra savings that you need in order to make money.  The old adage stands true, “it takes money to make money.” If you are constantly making payments on credit card interest and paying monthly bills for unnecessary, and unaffordable, luxury items then you will not have that opportunity.  

When you eliminate these expenses you should consider them, not to be extra money, but rather pretend like the debt was never eliminated.  If you take the money that you would have spent on theses unnecessary expenses, put it in a savings account and forget about it then you will be surprised how quickly that money will accumulate.  Within a short period, around a year or so, you should have the capital to start investing properly and begin your journey to prosperity.

At the same time that you are eliminating your unnecessary debt you should also be building your credit.  Whether you have good credit or not it is an important step how to make money that you have the highest credit score you can maintain.  

There are numerous advantages to having a good credit score.  They include: getting lower interest rates on your credit cards; cash or travel rewards on credit cards; high credit limits; and maybe the most important aspect of having good credit is that it will give you the ability to qualify for, and pay lower interest rates, for home, car, and personal loans as well as lower insurance rates.

Lending institutions look at your credit score in analyzing the risk involved in lending you money.  The higher your credit score the lower the risk that the lending institution will feel in lending you money.  When a lending institution is comfortable with the idea that you are a low risk lendee it will reward you by requiring you to pay a lower interest rate on a loan.  

When learning how to make money you will want to learn how to build good credit.  There are a few easy ways to do this.  First, you want to pay your bills on time.  Any history of late payments, actions taken by collection agencies, and especially bankruptcy will be a “black mark” on your credit report and make a lending institution wary as to whether you are a risk.  Don’t use too many, or too few, credit cards.  Most experts point out that you should have between 2 to 4 credit cards that you should use.  You are in the best position to show your lending institution that you have good credit by having a history of paying your bills on time.  If you have more than one credit card it will increase the amount of positive history that will show up on your credit history.  You should also periodically review your credit history.  This can be done by going to a credit reporting agency.  Be sure that you view credit reports from all three credit reporting agencies; Experion, TransUnion, and Equifax.  This information should be checked at least once a year and any discrepencies should be reported to the credit agency and maybe even further.  Having an unauthorized charge, or charges, can be a sign of identity theft; which can be devastating to your credit.

It may sound contradictory to what was mentioned in the first part of this article on how to make money but you will need to maintain the use of your credit card.  The only way for credit reporting agencies and and lending institutions to analyze whether you are a risk or not is to follow your spending and whether or not you meet your payment obligations.  If you never use your credit card you will not be inputting positive information into your credit history.  Although you will want to eliminate your unnecessary debt and interest rates initially you will want to maintain the use of your credit card as a tool to build your credit.  There are some tips to follow when using your credit card to build credit.

First, credit reporting agencies and lending institutions will not only be able to see what your balance is and whether or not you are making your payments but they will also be able have information on what kind of items you are using your credit, and debit card, for.  Many can think that this is an unscrupulous behavior on the part of the lending institutions but it is a viable way of analyzing what kind of individual the lending institution is dealing with.  For that reason you should use your credit card for expenses such as groceries, car payments, utilities, book stores, and other “positive” expenses.  In contrast, you should avoid using your credit, or debit card for “negative” expenses such as alcohol, cigarettes, or any other expense that may be deemed a “bad trait.” If you need to purchase “negative” items you should use cash so that there is no tracking of what your “negative” expenses.

Secondly, when using your credit card you want to use the card as much as possible to build your credit while still maintaining low, to zero, interest payments.  How is this done?  The best way to accomplish this is by looking at your credit card, not as a tool for when you don’t have cash in your bank account, but as a tool in the alternative.  If it is possible to do so you, should only maintain a balance on your credit card that you will be able to pay off at the end of the month through your checking account.  By doing this you will be showing the credit reporting agencies, and lending institutions, that you make your payments on time yet, at the same time, not incurring many, if any, interest charges.

After you have eliminated your debt, built your credit score, and accumulated enough savings it is time to start putting your money to work for you.  There are many ways to make money and how to make money can take many different forms.  You have the option of stocks, bonds, real estate, business opportunities, mutual funds, etc.  This is where all that work you spent paying down your debt and building your savings and credit will come in handy.

The safest bet for investing, especially when investing for beginners, is to look into bonds.  Bonds are certificates that are issued by corporations and government entities that signify a debt that the issuer owes the investor.  These investments are often considered the safest, especially when you are investing in U.S. Savings bonds.  Savings bonds operate in a reverse creditor situation where you are the creditor and the issuer of the bond is the debtor.  In exchange for your investment the issuer will promise to pay you back, with fixed interest, over a period of time that can range from months to 20 years, depending on your bond agreement.  The great thing about bonds is that they are consistent.  When you invest $10,000 in a bond with a fixed interest of 5% and a maturity date of 2 years you know that in 2 years you will have re-couped your investment as well as $500 in interest.  The disadvantage is that normally the amount of money that you can gain through investing in bonds is a low rate of return and unless you have the ability to invest exhorbitant amounts of money you will not receive a quick, and lucrative return on your investment.

In addition to bonds investing for beginners, and those that are looking to build capital through long term investments, mutual funds are a great way to make money.  Mutual funds are investments where an investor will contribute a certain amount of money into an investment pool.  The money collected from numerous individual investors will be used by a fund manager to invest in certain stocks and commodities.  When investing in mutual funds the investor will have the option of choosing mutual funds that deal with energy stocks, commodities, entertainment stocks, etc.  One of the great advantages of investing in mutual funds is that you can trust your money to an experienced and successful fund manager.  The disadvantage of entering into mutual funds is that you have little to no input into what specific stocks and commodities your money will be invested in.  You are putting your money in the hands of an expert and you will not be able to go at it on your own.

Yet another way to make money is to invest in real estate.  How to make money in real estate requires, not only extensive research, but a lot of capital.  Putting money into real estate is a great way on how to make money.  When doing this you should do your homework.  Find out what neighborhoods are up and coming, if the property values are lower than should be expected, possible business developments that may come into the neighborhood, among others.  One of the best forms of real estate investment is through auctions.  Especially in the current real estate environment where mortgage rates can be as low as 4% and housing prices are the lowest in 31 years.  Here is where all the work in building your credit comes in handy.  In order to take advantage of the extremely low mortgage rates your lending institution, especially in the wake of the housing crisis, will severely scrutinize your credit.  If you have bad credit you may have to pay high interest, or even worse, be denied a mortgage all together.  Buy homes and real property that need a little work.  The best way to make money in real estate is to turn a “fixer upper” into a valuable piece of property that will attract high income home buyers.  When you do this be wary about the surrounding neighborhood.  If you spend a good amount of money investing in property and even more turning the property into an even more valuable asset it could still be useless if the surrounding neighborhood is in shambles.  Another great way to make money in real estate is to pool your money with others.  If you have 10 people who are willing to invest $20,000 a piece a mortgage may not be necessary and a joint tenancy or tenancy in common can be created.  Real estate has been traditionally a very lucrative and stable way to make money.  In light of the housing crisis peoples opinions have changed but it should still be deemed a consistent profitable way to make money.

FOREX Trading is a manner in which activity involving the Trade and Exchange of Foreign currency is commonly referred; FOREX Trading is considered to be one of the primary methodologies and genres with regard to trading and investing – however, unlike the stock market, FOREX Trading does not involve stocks, bonds, or mutual funds, but foreign currency.

Similarly to valuation trends and behaviors latent within the stock market – with regard to the respective valuation and worth of individual stocks – currency and monetary systems in circulation are subject to that same value fluctuation; FOREX Trading is the industry of examining and investigating the FOREX Market with the hope of rendering financial gain through investments.

Typical FOREX Trading crimes may include FOREX Scams, which may mirror stock market investment scams in their implicit nature; financial crimes of this sort might prey upon individuals eager to turn a profit in a quick fashion – as a result, a substantial fee may be initially requested with the promise of an even larger return:

On one hand, the FOREX Market mirrors the trading of stocks; the fluctuation of valuation, trends, behaviors, and rates are constant. On the other hand, certain crimes latent within stock trading are less likely to occur with FOREX Trading; although insider trading may exist in the midst of a FOREX Trading agreement, the fluctuation of FOREX rates are determined upon the economy of a specific nation or country in lieu of a single company – unlawful tips in the form of insider trading are more accessible in the realm of a single company in contrast with a nation’s government.

Although hedging FOREX investments is not innately illegal, the Hedge-based FOREX Trading Scams are illegal. The scams involve preying upon investors with a smaller amount of capital by soliciting funds though fraudulent reporting of returns; the funding funneled in from investors with smaller amounts of capital is circulated to individuals with larger amounts of investment capital – this illegal activity is conducted upon the investment firm engaging in multiple, hedged investments that allow for financial gain in concert with financial losses.

FOREX Trading is a highly-specialized financial field, which is subject to all expressed and applicable legality latent within activities rooted in financial exchanges. Many of both the crimes, as well as the legal statutes implicit within the stock market and investments are applicable to FOREX Trading operations. FOREX Trading operations will be subject to any or all financial investigations undertaken by the presiding government of the country or nation; these investigations may take place on a variety of levels with regard to applicable legislature and legal statutes:

FOREX Trading fraud – akin to the bulk of investment fraud – is considered to be a nature of financial fraud, which allows for a variance in applicable legal jurisdiction; while certain financial crimes may be prosecutable by local and state governments, FOREX Trading fraud occurring on a larger-scale may reside under Federal jurisdiction

Individuals interested in engaging in FOREX Trading ventures and operations are encouraged to consult with legal professionals specializing in finance and international law; a legal background of this type will allow clientele to be privy to any or all implicit statutes and legal procedures latent within commercial ventures existing on an international level