10 Advantages Savings Plans Have That The Forex Does Not

10 Advantages Savings Plans Have That The Forex Does Not

10 Advantages Savings Plans Have That The Forex Does Not

1. Security

In general, an investment that pays 12% interest is not as safe as one that pays 6%, but it is doubtful that a 12% investment involves double the risk.

If the returns offset the added risk or provide a back-up to cover losses when they eventually come, then high-yield investments justify themselves, and they do so when they are smartly chosen, with the information at hand about the investment and when they are ready. managed with care, as we shall see.

Along with the general theory that there are many benefits to investing in high-yield opportunities, safety should be emphasized. This brings us to the second characteristic of investments that we will examine.

2. Collateral or guarantee

A homeowner can show you his bank account and also prove that he owns his house freely and clearly, so you conclude that he is a good risk whose signature on banknotes is as good as gold but much wiser for you to take it. mortgage on his home. Or if he has securities, he's better off handing them over to you than just taking his promise to pay.

If the dealer sells you a customer conditional sales contract for the car it sells in which the customer is obligated to make timely payments over a certain number of months or years, it's good, if possible, that the dealer guarantees the contract in case of customer default. Two people have to pay, and of course two is better than one.

3. Easy repayment terms

If someone borrows $2000 from you at an attractive rate of interest and promises to pay it back at the end of 12 months at 15% interest, the proposition on his face is bad. If he needs $2000 now, what guarantee is there that he will have it to pay back at the end of 12 months? Such a number is not small. Did he intend to borrow from Peter to pay Paul at the end of the year? In New York City a seemingly enormous man did this for years and got away with it until he died. That was more than two years ago and the creditors were left holding the notes.

Small periodic payments are a reasonable requirement, and it must be shown that the debtor can make these payments from his income when all his obligations are considered, and these obligations must be known.

4. Responsibility for payment

Several individuals or individuals, or a company made up of very different individuals should be required to pay in the type of investment we are talking about. Uncultivated land on the outskirts of town might be a good investment. One day it may be doubled or even tripled in value, but what we are trying to emphasize is a type of investment where there is an obligation on the part of one person or persons to pay a certain amount at a certain time or a payment of time. , and you as an investor must ask this person or these people to pay you by the due date.

5. Liquidity

The longer the contract runs, the less liquid it is and generally the less desirable it is. You can't get your money for a long time, and then the business or business climate may change. A person who lent $10,000 in 1928 for five years was likely to have difficulty collecting it in 1933. A letter of request is certainly preferable to a five-year note. You may need money sooner than you think when you make an investment, and if you are tied down for five years, you may not get your funds back. Perhaps better opportunities will present themselves. Stay as fluid as possible.

6. Spread of risk

If you have $10,000 to invest, for example, it's best not to put it all in one place into a mortgage. It's much better to put it in five mortgages of $2,000 each. A $10,000 mortgage may fail, but the odds are not so great that all five mortgages will default.

7. Part-time administration

We don't write for the purpose of getting someone to quit their job to devote all their time to their investment. We write for people who want to invest in their free time and keep their investment in their spare time. The investments described here may in some cases require more scrutiny than others he has undertaken, but by definition they should require minimal administration on the part of the investor. Payments must be made regularly, and missed or late payments must be an exception.

8. Business functions performed by others

You as an investor may not perform any business functions. The only function you have to perform, once the investment is made, is to receive the payment, and if the payment is not made, you should be able to use simple legal procedures to retrieve your money. If you invest in a gas station, you don't need to hire a manager and then proceed to sell gas and oil yourself, according to our definition of the type of investment discussed here. Filling stations must be leased to major oil companies for fixed leases, and oil companies must perform all business functions.

9. Investments are not subject to litigation 

When a debtor is unable or unwilling to pay, the first thing he generally thinks of is some defense (and his imagination is not limited in this regard) for not paying you: you have agreed to lend him more at the end of the year, and because you are not lending any more. the business failed. Or the interest rate you charge is usury and thus is against the law; or you actually owed him something before you loaned him the money, and this should offset what he owes you. This defense is used almost every day.

If he signs a note, he must sign a waiver (in a state that recognizes such a record) and the record will be explained later. Your investment should not be subject to litigation, and you should be sure of this fact before you do.

10. Tax advantages

The Internal Revenue Code and Regulations state what a taxpayer's obligations are and what they are not. You are obligated to pay every penny you owe, and you are not obligated to pay what you do not owe.

Certain types of investments are taxed more heavily than others. There's nothing wrong with investing in state and municipal bonds just because you're not paying federal income tax on interest. This is the law, and it benefits investors in government bonds and coincidentally makes it easier for state and municipal governments to finance their operations. Investments with tax benefits or protections are more desirable in most cases for investors than investments without such benefits or protections.

But Forex can make you rich in months, not years.

That's 10 Advantages Savings Plans Have That The Forex Does Not

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