9.20.2012

Why You Should Invest in Precious Metals

Investing in Precious Metals: Safeguarding against Economic Downturns

Especially during times of economic recession, investing in precious metals can be an effective safeguard against common financial woes. Forbes reports that gold, platinum, silver, and palladium are commonly included in investment portfolios in order to bring some stability to a volatile economy. Although investing in precious metals is not a foolproof method, as there is always risk involved, precious metals have the potential to protect your financial future.

Supply and demand

According to HowStuffWorks, there are practical reasons for the media focus on gold investment. For example, gold production dropped about 70 percent between 1980 and 2000. Under the principle of supply and demand, a decrease in supply will drive up the demand. When more people seek to purchase an item, the competition to purchase causes the price to go up. Perhaps some of the security of precious metals is the aspect of self-fulfilling prophecy. As more people invest in precious metals, the price of these metals rises, motivating even more people to add precious metals to their portfolios. If nothing else, precious metals prove a wise investment simply because so many people want to invest in them more and more.

Diversification

It is important to remember to diversify your portfolio, no matter how promising an investment in precious metals may be. Precious metals regularly shift in value, and the swaying of values can be more drastic than other investments. However, precious metals rebound much more fully and quickly than other investments, too. Investing in precious metals is unwise in the short-term but proves a great long-term protection against inflation and many of the risks generally associated with investments. Zacks reports that having some carefully selected precious metals in your portfolio can provide a safeguard against destabilizing currencies. Mutual funds often invest in mining companies, as well, offering diversification even within the precious metals industry. A mutual fund is a smart option, because not only does it manage when to buy and sell different investments, but it also eliminates the need to find a safe place for storing your own precious metals. For most people, it is entirely impractical to store several thousands of dollars of precious metals. A mutual fund offers both balance and practicality for such a unique investment. 

Technology Age

In this age of technology, innovators are coming up with new and unpredictable ways to utilize precious metals. This also adds to the supply and demand scenario. As precious metals become increasingly useful for more than just jewelry, we will continue to see their values rise. For example, HowStuffWorks reminds us that even platinum and palladium are becoming increasingly useful in the manufacturing of hybrid and hydrogen vehicles. There is no way to assess to what extent inventors will turn to precious metals for practical purposes, but as the trend continues, the demand for precious metals will rise. Even when people aren't purchasing precious metals to make as much jewelry, precious metals remain relevant in other industries that are not tied so exclusively to luxury. By properly diversifying a well-kept portfolio, investing in precious metals is a brilliant way to avoid some of the pitfalls of a stagnant or declining economy. Although no investment is invulnerable to risk, precious metals historically rebound fully and quickly. In the long run, precious metals can help make cyclical downturns just a little bit less relevant to your wallet.

Byline: This article was written by Karl Stockton for the team at FirstToKnow.com.

9.09.2012

How Many Smart Ways Can You Prepare the Money Egg?

Prepare the Money Egg!
How does your company manage its retained earnings? For instance, do you reinvest profit in your business and then measure your return on investment? Perhaps you simply leave profit as is and allow it to reduce your costs of capital by accruing interest. Regardless of what you do, it’s essential that you understand the money egg. What is the money egg? It’s a euphemism that explains the multiple uses of profit within your enterprise. In essence, just like there are many ways to prepare an egg, there are many ways to reinvest your profit back into your enterprise. Success involves evaluating your investments and making the appropriate adjustments in order to remain committed to your long-term objectives.

The $1 Rule of Business


Perhaps the best way to explain the money egg is to reflect upon how much sales it takes your enterprise in order to generate $1 of profit. Let’s assume it takes $15 in sales to generate $1 of profit. Therefore, every dollar saved within your enterprise is akin to making a $15 sale. Better yet, for every dollar saved by reinvesting in your business, you’re able to secure a 1500 percent return on investment. Now you need to focus on where to invest your profit, the types of analytics and reports you’ll use to measure success and finally, what adjustments will need to be made in order to increase your returns.

 • Increasing Production Capacity: When manufacturers want to measure the value of investing in new equipment, they start by defining how their purchase will increase production throughput. Be sure to apply a dollar figure to the costs of an upgrade in equipment. For instance, will this purchase help increase your production in units, and if so, by how much? Will it lower your cycle times in manufacturing, and if so, how much more profit will you make as a result of this increase in efficiency? Focus on outlining the initial purchase relative to the increase in revenue and profit that comes from increasing your production throughput.

 • Sales & Marketing: When you invest in sales and marketing you goal is to reduce the costs of customer acquisition. In essence, you are lowering your costs of winning business, finding new customers and keeping those customers. The more you reduce your costs of finding customers, the more profit your company makes. Every dollar spent on marketing and sales should be defined by how much your company increases its market share and how much additional business you secure.

 • Operations: How do companies measure the returns on improving their operations? Well, most start by defining the high costs of data entry and key entry errors. These errors have a cost and can be measured by high product failure rates, improper invoicing, poor shipping and handling practices and poor customer service and support. When a company ships the wrong part to the wrong customer, it’s usually because they rely upon manual processes. When you invest in a software that manages operations in real-time, you are upgrading your operations so as to eliminate the high costs of manual processing errors. Tracking the return on this kind of investment simply involves comparing error rates before and after your purchase.

Your company’s profit is essential to securing your company’s long-term future. Whether you decide to leave it as retained earnings, invest in capital expenditures, or upgrade your employees’ core competencies with improved training, you still have to decide how your company will measure its return on investment. Each area requires different strategies and different analytics. This means you must continually assess your progress with comprehensive analysis and make the necessary adjustments to remain on track.

Byline: This article was written by Karl Stockton for the team at criticalillnessinsurance.com. They can help answer the question: How do I get critical illness cover? Get professional advice on the matter.

9.04.2012

Use Your Job Benefits to Start Investing

start-investing
Start Investing

About ninety percent of the millionaires in the country have earned their fortunes investing. If you are like many, you are under the impression that you already have to have some type of wealth to start investing in the stock market, real estate property, and the other investment arenas. The truth of the matter is that you do not have to have wealth to invest and earn more money for your retirement. If you are trying to build a nest egg, all it takes is having a job that offers you excellent benefits. Find out how you can use your 401k and your company stock purchase options to build your nest egg and start investing for the future, right here in the present.


What Can You Do With Your 401k?


One of the most valuable tools you can use to invest for the future is your 401k. A 401k is an employer-sponsored retirement savings plan that helps employees automatically save money for the future before the IRS ever taxes the income. What many people do not know about their 401k is that they usually have a great deal of control over how the money they contribute to the fund is invested. Most employees choose to invest in several different types of vehicles, like mutual funds, stocks, bonds, and other cash and money market investment options. The key to using your 401k as an investment tool is learning how to more effectively invest your retirement assets.

You need to take time to research all of the mutual fund options that are available to you when you are investing through your 401k. You will need to conduct your own research before you choose just any mutual fund. It is a good idea to request what is called a prospectus from each mutual fund. A prospectus will tell you everything you need to know about the mutual fund, their investment strategy, and the inherent risks. Once you review this and find a mutual fund that matches your long-term goals and risk tolerance, you can then invest the funds you and your employer have deposited into your account.


Take Advantage of Stock Purchase Options


Your 401k is not the only employer-sponsored benefit that you can use to invest for your future. If you do not have money to buy stocks at their market price, you should consider investing in the company you work for, and take advantage of any stock purchase options you are offered. When you work for a publicly-traded company, often they will use the proceeds from selling shares to fund their business efforts. In exchange for buying these shares, the stockholder will have their own personal stake in the company's financial performance. When you work for a company, you should have trust in the company's potential as an investor would.

One of the benefits of taking advantage of qualified employee stock purchase options is that you will sometimes have the option to buy shares at prices below the market value of the stock. If you have stock options, and the strike price set is lower than the market price of stock options, you are making an immediate profit just by buying shares. If the company performs well financially, the employee has the right to hold onto the shares or to sell the shares through their broker. When you exercise your direct stock purchase plan at work, you never have to worry about forgetting to buy shares, because the money can be deducted directly from your paycheck.

When you have employee benefits that can be used to invest, you can save serious money without all of the excuses. Start saving for the future now and live comfortably in your retirement by using your workplace benefits to your advantage while you can.

Byline: Karl Stockton writes for http://www.insuranceswami.com.