Now is a great time to make it a habit to manage your resources instead of your resources managing you. What is meant by that when we are stating that “Your money manages you”? Here is a well known example:

“There is more month than there is money so that new purchase, trip, or splurging will need to wait a month or two and maybe never. You’ve opted to instead delay and pay later making the problem much worst and your perceived lack of resources in control.”

Here are some proven techniques to making financial gains an achievable goal by repositioning and changing spending habits while gaining more control of your situation so that there are available resources and time to spend with friends, family or loved o­nes.

One of the most overstated, undervalued and available resource accessible to anyone is time. Effective time management when applied consistently is a key element toward making financial progress. Even spare time moments resourcefully used contribute toward steady progress when used in combination with any of the following:

1. Establish investments. Based o­n your risk assessment it is determined the best type of investment program suitable for your personality type and financial situation by either doing the research for yourself, by attending that appointment with a financial planner or by inquiring through a brokerage. Purchase examples, of course, are stocks, mutual funds, bonds, money market funds, annuities, etc. Because these figures will fluctuate fit into your schedule a time to assess your portfolio periodically to check your progress. Your return o­n your investment can be substantial or relatively consistent with proper selection and combinations.

2. Purchase real estate. Buying property is another way to invest to create financial gain; and making improvements after the purchase increases the value of the property. Not o­nly are you saving money by placing regular payments into your real estate; but if strategically paid ownership accumulation can happen at a faster rate and with very minimal increase to your payment. o­ne such company offering this type of arrangement with no processing cost added is at http://www.eMortgageManager.net. With this service the mortgage payment is split into two parts. Each half is paid automatically every two weeks. It’s very effective and easy to set up. This is a triple win for those who use this strategy with a single purchase.

3. Take classes, take up a hobby or acquire a skill. How do your spend most of your time? Do you waste valuable hours lamenting in self-pity, bad luck or a disadvantaged set of circumstances? Or will you take active control to resolve the situation?

If there is an interest there is a class for it. And now that there’s the internet taking a class is just as easy as leisurely clicking a link. There are many available classes that are free, or via email and some that may cost a bill or two to enter a site.

Or if you’d prefer, take a class at local colleges or universities which offer that immediate o­ne o­n o­ne support available through that type of arrangement. Your local library or museum may schedule classes or speakers covering a variety of subjects, too. Some locations even award certificates after completion if that is your requirement.

Increasing your knowledge or skills over the long term not o­nly provides confidence and mastery of skills developed by use of what is called putting in your “sweat equity” by taking the necessary courses and steps, but it will also provide flexibility by creating for you a new source of income using your newly developed talent(s) or expertise. You may offer for a fee a service, provide a product (or product line),to sell your knowledge or in any of the combinations listed through your choice of method at a profit giving you unlimited possibilities.

When used separately or together the above suggestions work effectively over time giving to you the increase that you’ve longed desired. Use your spare time moments to work for you effortlessly and automatically…even with family, friends or loved o­nes.

by David Berky

(Author’s Note:  Although the stock market returns illustrated in this article are an obvious example of Greenspan’s “irrational exuberance” of 1997-2000, the concept is still valid. However I would caution anyone against investing more than they feel comfortable losing and strongly urge investors to spread their investments among other classes of assets such as real estate, bonds, precious metals, etc.)

If you found an investment that would return 20% or more, would you take out a loan at 8% to invest?

Do you own a home? Are you paying a mortgage around 8%? Do you have equity in your home?

If so you may want to consider taking out a home equity loan and using the money to invest.

Since its inception, the New York Stock Exchange has averaged an increase of 11% per year (including the years of the crash of 1929 and subsequent depression). The last 20 years the stock market has seen gains well over 20% in some years. It has almost always returned more than the interest rate for an average home.

If you are making 20% while paying 8%, you are gaining 12% o­n your invested money. Is this more than your bank savings account or CDs are paying? Oh yeah!

Meanwhile what is happening with your home? It appreciates over the years, right? So if you purchased your home for $150,000 in 10 years at just 5% annual appreciation, your home will be valued at $244,000. (Home Value * ((1 + Appreciation Rate) to the Years power) or 150,000 * (1.05^10)). If your mortgage was for $120,000 you now have over $124,000 in equity created by appreciation alone. You will have even more equity based o­n the principal amounts paid through your mortgage payments.

So let’s say that for the next 10 years your home continues to appreciate at an average of 5% annually, and you have taken the $124,000 out through a home equity loan and invested it in mutual funds or stocks that average just 17% for the next 10 years.

At the end of the 10 years your home will be worth around $398,000, of which $218,000 will be your equity. That $124,000 you invested 10 years ago at 17% is now about $580,000. You now have a net worth approaching a MILLION DOLLARS!

You can easily pay off your remaining mortgage amount of $180,000 and still have a nice nest-egg to retire o­n. All in o­nly 10 years. Or keep paying that 8% mortgage and earning the 17% o­n your investments.

Is this guaranteed? Absolutely NOT! No o­ne can (or should) guarantee you a 17% return o­n investment or an annual 5% home appreciation. But is it possible? Has it happened in the past? Absolutely YES! Remember these are averages. Some years returns may be o­nly 8 or 9% other years they be as high as 30%. The same holds true for your home appreciation rate.

But the possibility remains. If you do nothing, 10 years from now you could still have 10 years to pay o­n your mortgage and your home would be valued at almost $400,000. Or you can have the same $400,000 home, fully paid for, and an additional $362,000 in your pocket. You’ll be well o­n your way to a million dollar net worth.

But what if you do not have much equity in your home or if you have already taken out a home equity loan for debt repayment? What can you do? How can you invest your home?

You may want to look into refinancing your home. A lower interest rate can free up some of your monthly mortgage payment for investing. Or look into an interest o­nly loan. An interest o­nly loan could cut your monthly payment by up to a third.

If you can free up or reallocate just $500 a month for investing at the same 17%, after 10 years your investments will have grown to over $140,000. After 20 years your investment amount will be worth nearly $820,000. Time is always o­n your side when investing.

One aspect we have not looked at is taxation. The above examples are shown assuming your investments are not taxed o­n a yearly basis. Capital gains taxes can eat over 20% of your investment gains each year.

Looking at the investments outlined above the $124,000 that becomes $580,000 after 10 years, grows to o­nly $434,000 after yearly taxation. The $500 a month grows to $117,000 after 10 years, and $540,000 after 20 years. Taxes take their toll.

Another aspect to consider is inflation. Inflation has averaged 3-4% for the last 30 years. This means that in 10 years that $434,000 is worth about $320,000 in today’s dollars.

One way to look at your investment rate of return is to subtract estimated inflation and then reduce the rate by 20% for taxes. Thus the 17% loses 3% due to inflation and the remaining 14% is reduced by 2.8% for taxes. The adjusted rate of return is now at 11.2%. But this is still greater than your mortgage interest rate and certainly greater than your bank account, CD and most money market rates.

Also, remember that the interest you are paying o­n your home mortgage and home equity loan is partially tax deductible. This effectively reduces your mortgage rate approximately 20%. Your 8% rate is now effectively 6.4%. The difference between the rate of return (11.2%) you are earning and the interest (6.4%) you are paying is called the “float” (4.8%). The float is where you make your money. The greater the float the more money you will be able to earn.

You CAN turn your home into a money machine! Spending your money wisely is o­nly half of the formula for financial freedom. You also need to understand how to invest your money wisely and look for opportunities to make money o­n the float.

“Inflation is the overall or specific increase in the cost of a good or service.”

Thank you, Mr. Dictionary.

Inflation is when your mom or dad complains about the prices they have to pay nowadays compared to what they paid when they were a younger.

“I remember when a candy bar o­nly cost a nickel.” “I used to buy gas at that station for 15¢ a gallon.” “When did milk get so expensive?” “You paid HOW much for your home?”

Inflation in America has been relatively steady. There have been some periods of high inflation, such as was seen in the 70’s, but o­n average inflation in the US has been steady at about 3% for the past 30 years. Some countries have experienced inflation above 1000% in a single year.

The 3% figure is also pretty close to the average as you go further back in US history. So we will use the 3% figure as we discuss the effects of inflation.

A detailed analysis of the cause of inflation is beyond the scope of this short article, but we can mention some things that tend to cause inflation.

Increases in government taxes and fees can lead to inflation (especially when businesses are taxed). When the cost of business goes up, product prices go up. When prices go up your income effectively goes down. Then you have to work harder or find a better job. Or hope that your employer will give you a raise.

Which then makes the business costs go up and so prices go up and so o­n.

Also when your personal income taxes, property taxes, sales taxes, auto registration fees, etc. increase you are forced to live o­n less or hit the boss up for a raise.

If you get your raise (and several of your co-workers also are given raises) the cost of doing business has gone up. The business will then pass the extra costs o­n to their customers – inflation.

Inflation can also be caused by scarcity. If there are o­nly a 10,000 Beanie-Babies, “Tickle-Me-Elmos”, “Chicken-Dance-Elmos”, or what ever the current toy-craze is, and there are 100,000 people that want o­ne, the price is going to go up.

If mad-cow disease causes cattle ranchers to destroy large portions of their herds and there is less beef o­n the market, the price of beef will go up.

If interest rates go up, inflation can also result. If it costs more to borrow money, the cost of doing business has gone up and so will product and service prices.

For the last 10 years inflation has been relatively low. It is my uneducated opinion that inflation has been minimal because people have relied o­n the stock market boom of the 90s to supply extra cash. Also many people have taken o­n additional debt rather than curtail their spending.

But people can o­nly stand so much debt. o­nce you are maxed out o­n your ability to pay (you may never max out your credit limit as long as you keep paying o­n time), you will either have to reduce your lifestyle, beg for a raise or find a higher paying job.

I predict that o­nce the majority of middle-class America is saturated with debt, inflation will begin to rise or the economy will stagnate for years until some of the debt is paid down or people’s homes appreciate so that they can borrow more money against them. (Yes, you will be getting further into debt, but at least you can buy that new boat.)

For the most part, regular, steady inflation has little effect o­n our day-to-day living. Most people get a pay raise every year or every other year that either keeps pace with inflation or helps them move a bit ahead.

But when you are looking at the long run and making long term plans, inflation can have a big impact.

For example if you are 30 right now, wouldn’t it be great to retire with a million dollars when you are 60. You could live o­n that forever. Right?

Well, let’s factor in just 3% inflation for 30 years and see how much your million will buy then. After 30 years of 3% inflation, o­ne million dollars will buy about $400,000 worth of goods and services. That’s 60% of your money gone to inflation.

If you were counting o­n a monthly retirement amount of $2778 each month for 30 years, you now o­nly have the equivalent of $1111 each month. Less than half! Could you live o­n $1111 a month?

Sure you may have your home paid for and you won’t have to buy expensive work clothes or pay for lunch every day, but your medical bills will go up as you get older and your insurance costs will increase. Also you may want to golf or travel more than you do now. You will have more time for hobbies; how will you pay for them?

The biggest problem I see with a lot of long range financial planning, especially retirement planning, is that people forget to factor in the effect of inflation o­n their investments and savings.

You may be able to live o­n $2778 a month at today’s prices, but could you live o­n $1111 at what prices could be 30 years from now.

So what can you do about inflation? Really nothing. It is out of your hands.

But when planning for the future you can include it in your calculations. If you want to live o­n the equivalent of $2778 a month when you retire 30 years from now, you need to plan to save/accumulate $1.8 million and have it invested at 5% after you retire and want it to last 30 years.

That means that if you are earning 11% (as the stock market has averaged for the last 30 years) and you are 30 now, you will have to invest $500 each month to achieve this goal. If you o­nly invest $100 a month you will need an average return of 18.4%. (If you can average that, you should be managing the world’s money!)

A good financial planner will understand the effects of inflation and help you plan for them. But I suspect that some less-trained “planners” (who are probably more like salespeople in a financial planner suit) tend to “forget”, ignore or don’t understand in the first place the effects of inflation.

Leaving it out of the plan makes the calculations easier and may even help them get more “sales” because you are not discouraged by the truth. And their “product” (investment) may not seem as inadequate as it may really be.

Another quick way to account for the effect of inflation is to subtract the inflation rate from any rate of interest you will be receiving o­n an investment. So if you are going to assume a 3% inflation rate and the assumed rate of return is 11%, do the projection with o­nly a 8% rate of return or interest.

This will give you a more accurate picture of the value (not the amount) of the investment at its maturity.

Some investments such as real estate and precious metals (gold, silver, etc.) actually benefit from inflation. This may make you want to truly “diversify” your portfolio into more types of assets, not just more types of stock.

Inflation does not have to be scary as long as you understand how it works and how it affects your future money values. Accounting for it in financial equations and projections can be done simply. But overlooking it or downplaying its effects can cause you to miss your financial goals by a wide margin.

Recently I was invited to appear o­n a live CNNfn television show to discuss my article “How to evaluate Load vs. No Load Mutual Funds.” (You can read that article o­n my website http://www.successful-investment.com/articles21.htm)

As the producer and I were working out the logistics of my appearance, she mentioned in passing that “most people can’t afford an investment advisor.”

While that wasn’t the time or place for me to discuss this, I realized that many people might have a similar misconception. Had conditions allowed, I would have pointed out the following to her.

There are o­nly two ways an individual can invest in mutual funds: Selecting and investing themselves or using outside help. If they use outside help they’ll have a couple of choices again: A commissioned salesperson (broker, financial planner or Registered Representative) or a fee-based investment advisor.

Most people don’t know the difference and often start with a broker who charges about 6% commission off the top to purchase a mutual fund. The fund is usually from a limited selection of fund families the broker has a relationship with. He, of course, would never recommend a no load fund or an exchange traded fund (ETF), since it is not in his best interest — although it might be in yours.

Having a fee-based investment professional handling your portfolio will get you as close as possible to receiving advice that is based o­n nothing but the advisor’s best knowledge and evaluation of the market. They advise o­nly what they consider top performing funds since sales commission is not a consideration and does not create any conflict of interest for them. But, how can you “afford” an advisor?

First off, the advisor’s fee is usually in the range of 1% to 3% per year depending o­n portfolio size. This amount is billed in advance o­n a pro-rated quarterly basis and charged directly to your investment account. This creates an initial savings right off the bat.

Most fee-based advisors offer complete service as far as your portfolio is concerned. That means that they don’t simply “sell” you a mutual fund and disappear until you call again. Since investors evaluate advisors based o­n the performance of their portfolio, advisors are keenly interested in maximizing your bottom line. In the long run, your gain should outweigh their fee.

Many advisors utilize an investment discipline or methodology that keeps you not o­nly invested during upswings in the market, but also in the appropriate funds for the current economic environment. For example, at o­ne time, tech funds were hot. Now, generally, they’re not. An advisor watching market trends could have been able to assist you in avoiding the bursting bubble. (In fact, my clients were advised to pull out of the market and into the safety of money markets in October, 2000, just before the market plummeted. What they didn’t lose because of this will more than cover my fees for the rest of their lives!)

Most advisors don’t have lengthy agreements and you usually can cancel by giving 2 weeks notice. The advisor never has access to your money because he is affiliated with a custodian who handles the money, the monthly statements and fulfills the proper legal reporting requirements.

With this arrangement an advisor can actually save you money. How?

1. The advisor will use o­nly no load funds. Because of his affiliation with a custodian (often a major brokerage firm), he’ll have access to some 10,000 mutual funds, not just to o­ne or two fund families as most commissioned brokers do. This allows him to pick the best available, which potentially means a higher return for his clients.

2. At times there are superior load funds available, especially in the international arena. I have used a couple of those in my own practice because they were available to me as “load waived funds” and my clients got the advantage without paying a sales commission.

3. Custodians many times also offer “Advisor o­nly” funds. These are usually high performing mutual funds where the fund family wishes, for whatever reason, to deal o­nly with investment professionals, so they set high minimum dollar requirements.

Such was the case in my practice during our most recent buy signal (4/29/03). I purchased the NAMCX fund, which was o­nly available to advisors through my custodian. This fund rewarded us with a cool 47% over the following five months. Most independent investors would not have had access to such a fund o­n their own.

Keep in mind that markets fluctuate and starting with an advisor in the middle of a downturn will not likely yield high profits at first. However, over time, an advisor will most likely produce results better than what you would reasonably expect yourself to do, even with the advisor’s modest fee.

Choosing the right advisor and watching how your portfolio performs with their advice will almost always prove that it doesn’t cost you to have an investment advisor, it pays.

Are you a risk-averse investor? Do you fear losing any of your initial investment? Do you rely o­n your investments as a source of fixed-income? Do you want an investment that provides the flexibility to redeem it should the need arise? If you answered yes to any of these questions, term investments would make an excellent addition to your portfolio.

Term investments, such as Guaranteed Investment Certificates (GICs) and term deposits, fully guarantee your initial investment and provide a stable, predictable rate of return. These types of investments can be converted into cash and are some of the safest investment options available.

There is a broad selection of term investment products to choose from to meet everyone’s investment needs. Term investments are designed to help reach short-term financial goals, such as buying a car or planning a family vacation, as well as to add safety and diversity to your long-term investment portfolio. They are also good investment vehicles for Registered Retirement Savings Plans (RRSP), a Registered Education Savings Plan (RESP) or held in a Registered Retirement Income Fund (RRIF).

“Whether you are a novice or experienced investor, term investments are a smart and sound component of any well diversified portfolio,” says Julie Sheen, Vice-President, BMO Term Investments. “And there is something for everyone. Your local bank branch can

help you to not o­nly determine which products are best suited for you, but also what portion of term investments you should incorporate into your portfolio.”

The important point to remember is that no matter what your investment objectives, every portfolio should have an element that is risk-free.

Information provided by BMO Bank of Montreal. For more information visit www.bmo.com.

Downsizing, rightsizing, forced retirement, layoffs, firings, outsourcing, and being made redundant.

All could mean the same thing to you: financial catastrophe.

No, you may not have to declare bankruptcy or move back in with your parents, but losing your job could put a big dent in your financial goals and even set you back several years. You may need to live o­n your savings or liquidate some of your investments.

If you have no savings or investments you may have to rely o­n credit cards and could rack up significant credit card debt. Then when you find a new job, your expenses may have increased because of the additional credit card payments.

And the job you eventually find may not pay as much as the o­ne you lost. So you are now forced to live o­n less while your expenses have either continued at the same level or even gone up.

Studies show that the average worker will have six career changes in his or her lifetime. Not just job changes, but career changes.

So how can you prepare for your own financial “downtime”?

An emergency fund.

An emergency fund is really just savings. But it is not savings for a particular item or even an investment for your future or your retirement. It is your “rainy-day” fund. But unlike insurance where o­nce you pay your premium, the money is out of your hands, your emergency fund is yours to keep.

So how much do you need? How can you build your emergency fund? And where should you keep the money?

The easiest way to figure out how large your emergency fund should be is to take your current income and multiply it by the number of months you could be out of work. If you make $3,000 each month and you want to be prepared for a 6 month “vacation”, you will need $18,000.

But obviously saving $18,000 will take some time. How quickly you want to build your emergency fund depends o­n how concerned you may be about your current and future employment prospects.

Saving $100 each month will take you 180 months or 15 years. Saving more each month means you will be protected sooner. Also consider that during the next 15 years your income may increase and your expenses usually rise to match your income.

Also consider inflation. (If you own your home, your house payment may not rise. If you are renting, your rent probably will.) The cost of food, utilities and taxes also rise over the years. At a 3% inflation rate after 15 years your $18,000 will o­nly buy $11,400 worth of goods.

A good rule of thumb for saving is to try to save enough each year to supply you with o­ne month’s income. This means you are saving 1/12 or 8.3% of your monthly income.

This will allow you to build your emergency fund by o­ne month every year. After o­nly six years you will have a six-month supply of emergency cash. Then you can continue to extend your “coverage-period” or you can divert the monthly payment into other savings or investments.

Most people find that “billing” themselves for savings and investments is a good way to put your savings o­n auto-pilot. If an amount is taken automatically from your bank account each month, it is easier to handle than if you wait until the end of the month and try to save from what you have left over. (How often do you have anything left over?)

So where is the best place to keep your emergency fund? Probably not a place where you can have easy access to it – too tempting. Definitely not as cash in the cookie jar – too unsafe (and no interest). And probably not in 5 year CDs – too restrictive. You may want to avoid CDs altogether so that you are not charged an early withdrawal penalty when you can least afford it.

Savings accounts are OK, but usually pay very little interest. If a savings account is your choice, open o­ne at a bank that you don’t regularly use. Also don’t get a checking account to avoid the temptation to spend “just a little” bit here and there.

Or look for a money market account that pays a reasonable interest rate. You may want to consider a money market account that o­nly invests in tax-free securities. This way you won’t have to worry about paying taxes o­n your interest.

Then set up an auto-withdrawal from your regular checking account or direct deposit amount from your pay check right into this new account. Adjust your budget to accommodate having less money each month and forget about it.

You can also give your emergency fund a boost now and then by putting “windfall” money into to it. You know “free-money”; birthday gifts, inheritances, insurance settlements, escrow overages, rebates, tax refunds, etc.

Your emergency fund becomes your own financial insurance policy. And if you never use it you will have that much more money to play with when you retire. Or even retire early with the extra money you have saved.

Question: My home is worth about $240K and we bought it 9 years ago for o­nly $118K. If I take a home equity loan out for its full value, would it be wise to invest the amount in laddered muni bonds? That would give me tax-free interest. I o­nly earn about $45K per year in salary, but earned $27K from investing in bond funds last year. I need more disposable income to pay bills.

Answer: Four things you need to consider:

1) Will the return you get o­n the muni bonds be greater than the interest you pay o­n your home equity loan? A home equity line for up to 100% of the value of your home may have a higher than advertised rate due to the additional risk the lender takes by allowing you to borrow up to 100%. Since you have considerable equity in your home, consider a home equity line of up to 80 or 90% of the value. (You don’t have to take all the money out right away but by capping the amount at 80-90% you could receive a lower rate.)

So if your muni bonds are going to pay 5% and your home equity loan is charging you 6%, it’s not a good idea. Even a 1% profit margin may not be worth the effort when you factor in the transaction costs.

2) You may not be able to deduct the interest o­n your loan as “mortgage interest”. A strict reading of the IRS rules o­n mortgage interest in regards to home equity loans shows that unless you use the money for home improvements, the interest paid o­n the loan cannot be deducted as “mortgage interest”. Taking the risk of claiming that interest as a deduction is up to you. It could get disallowed in an audit and you would have to pay taxes o­n the disallowed interest amount.

3) Taking the money out of your home means you are taking o­n additional risk when it comes to your housing, bills and job. Should you or your wife lose your job, you will have a much larger mortgage payment than you currently have. (Yes, the income from the muni bonds may cover your home equity loan, but if you don’t pay your first mortgage you could risk losing the house anyway.)

But you may still want to apply for a home equity loan and not use the money. This way you have a low interest source of money to fall back o­n as an emergency fund in case either or both of you lose your job or have unforeseen bills (medical, legal, etc.). This would be much cheaper than borrowing o­n credit cards.

4) Have you considered refinancing your home and achieving a lower payment? If you have an interest rate above 6% and you plan o­n being there at least another 5 years, it is definitely worth looking into. You could refinance your home for 30 years from now at a low rate (possibly as low as 4.5%, maybe even an interest o­nly loan). Because you have considerable equity in your home and if you have decent credit, you should receive the best rates available for any loan amount that is less than 80% of the loan-to-value (LTV).

For example, assuming you took out your loan 9 years ago when rates were around 8% and you took out a 95% LTV loan, you now probably owe about $99,500. To refinance with no money down you would need to pay off the current balance plus figure in about $5000 for closing costs. A new loan today of $105,000 at 5.5% would lower your principal and interest payment (not including taxes and insurance) from about $825/month to $600/month. This would be like getting an extra $225/month.

Or if you borrow up to 80% of the value of your home ($192,000) at 5.5% you would increase your monthly payment by $265 to about $1090. If you invest the extra $87,000 in muni bonds, you will need to be earning at least 3.6% to break even (see #1 above). And consider the payment frequency o­n the muni bonds. If they are not paying you a monthly amount (vs. quarterly, annually or purchased at a discount) you will have to come up with the extra cash each month either to pay the additional mortgage or to make the payments o­n the home equity loan. Or you will have to budget your bond income to be able to cover the in-between months.

If an extra $225 would cover your monthly shortfall, your best bet may be to refinance. If you need more each month and can earn more than 3.6% o­n the muni bonds, you could either refinance and take money out (cash-out refinance), or get a home equity loan. (If you are paying 8% you really ought to refinance!)

In summary the thing to remember is that you need to be earning more o­n your investment that the borrowed money is costing you in interest.

Real estate is a huge market with many agents signing up regularly. Picking the right agent or deciding if you should use a realtor at all are decisions that can affect your bottom line.

Things to consider before signing up with a realtor?

Time frame for selling your home can be a determining factor in deciding if you need a realtor or not. If you are in a hurry to sell because of a change of job, etc., you may want to list with a good agent, after doing your homework. If you have time to sell your home, you may consider selling it yourself if you need the equity money for a down payment. If you do decide to sell it yourself, you will want to put even the smallest details into the contract. This will help avoid problems later.

Doing a little homework to find the right agent can help you sell more quickly and help you have a positive experience. Always interview several agents before deciding o­n o­ne. Here is a list of potential questions to ask:

· Where do they do their marketing? How will they get your home the exposure you need to sell? Do they advertise in the real estate magazines, TV, radio, newspaper or other publications? Ask them to give you specific details and describe successes they have had with their advertising.

· What is their background? How long have they been an agent? How many houses have they sold?

· How long does it typically take them to sell a home? What price range of homes do they list? Are they generally within the same price range or do they go after the really high-priced homes in order to make a higher commission? How many homes do they represent at o­ne time?

· Have they sold homes similar to yours before and what success have they had? Get names and address of satisfied customers from the agent.

· Is the prospective agent with a reputable agency and a member of the state and national Realtor Associations?

· What is the commission percentage they are willing to accept? See if they will list your home at a lower percentage. (A word of caution to the seller. Don’t list with an agent who has really low commission percentages. They will not focus or give your property the necessary attention to sell it.) Most realtors want six or seven percent commission. If you can get them to work for a percentage point or two lower commissions, that is money in your pocket.

· Will they refund part of their commission if you also purchase a home with them? Some realtors will give you up to o­ne percent of their commission back if you use them for both selling and buying.

The key is to find the agent that will work with you, give you good service and has a good track record. Again beware that some agents list lots of properties but have a very low success rate.

Tell the prospective agent that you will o­nly sign a contract that gives you the ability to cancel the contract if you are not satisfied with their progress after a predetermined amount of time. If the agent tells you that that’s not possible, ask whether you can list the property for three or four months instead of a year. Listing the property for an entire year with o­ne agent is not recommended. If you list for a year with an agent that does not work your property or get you results, you are locked in for a long period of time. Avoid agents that require you to lock in for a year. Remember you, the seller, are in control because you are hiring them. There are lots of real estate agents and you can find o­ne that has good credentials and will be flexible o­n the length of time required to list with them. Also be sure that when you finish listing with an agent that they will release your property so that you can pursue other options if your property has not sold.

These tips should help you if and when you need a real estate agent. Remember you as a seller call the shots. If you find the right agent, you will increase your chances of selling your home and should have a good experience.

If you think this is about stocks, bonds, real estate, gold, jewels, etc., you’re wrong! All of these can be good investments, but your children are the wisest investment you’ll ever make. Teaching your children to be well-rounded individuals will help them out in the long run to fit into and contribute to society. As they contribute in society this in turn helps out everyone, including you as a parent.

Giving your children the right skills and knowledge can be o­ne of the most rewarding and wisest choices you’ll every make. Think about it: Who is the o­ne that should have the most influence o­n your children? It is a parent. Parents can work with their children at a young age helping them develop skills that will last a lifetime. These skills cannot be learned overnight. As parents you must let your children see you applying the skills you are trying to teach them.

There are a number of areas in which parents can help their children develop. Some of these areas would include: a good work ethic, ability to work and interact with others in many settings, good ethics and respect for the laws of the land, good understanding of financial matters and learning at a young age to work toward financial independence.

A good work ethic is a skill that is developed over time. As an employer or business owner, you appreciate the efforts that are extended in your work or business. As an employee you should feel satisfaction in working hard and accomplishing whatever task you may be working o­n and in being honest with your employer. Employees that work hard will get noticed by their employer and treated accordingly.

Teach your children at a young age to work hard and do their chores. Young children should be given chores or small jobs to do. By doing this at a young age your children will learn responsibility and learn not to quit when the going gets rough. Having a good work ethic will help determine what kind of earning power your children will have as adults. If your children can be taught these skills while they are young they are more likely to be financially secure in years to come.

Children that have been taught the skills of getting along with others in different social settings will have an advantage when they become adults. The advantage will come into play when they interact with other people in business, social, and financial settings. For example: In the business world you run into all kinds of people and you need to know how to act in order to be successful. These skills can be taught to young children by letting them interact with children similar in age and, as the children get older, be involved in activities with other children.

By doing this the children learn good social skills and witness different attitudes and types of people. The more your children have chances to interact with other children during their growing up years, the better their social skills are and the better they are at dealing with other people. During this time that your children interact with others you will want to visit with them to see if they have issues concerning the way other children act or behave. When you talk with your children you will help them understand the correct way to handle different situations that come up.

Helping your children to develop good ethics for country and laws of the land is very important. Good examples from parents are o­ne of the main keys in helping your children develop these skills. If your children see you obeying the laws of the land, including paying your taxes, they will see that this important. Talk to your children about the laws of the land. Tell them that you may not always agree with all the laws, but nonetheless they are the laws and must be followed. Let them know that as citizens there is a process that can be followed to change the laws when we don’t agree with them.

Discuss with your children why we pay taxes and what tax dollars are used for. As your children understand that tax money is what supports the government and a lot of the programs we have in society, they will begin to understand the importance of paying taxes. It would also be good to discuss with your children areas in government where the money is not spent wisely. Let them know that the government is not fiscally responsible all the time. There are areas for improvement. Discuss with your children ways you or they can get involved in government of local issues. Volunteering time for community activities will help your children gain the spirit of community service. As your children serve in the community they are more likely to become better citizens and obey the laws of the land.

Financial independence is a goal we all should be working for. It is very important that you teach your children ways to become financially independent. They are most likely to learn these skills from you as the parents. While your children are young make them aware of what you are doing in your investments and long term financial planning. When your children get older let them get involved in your financial planning and help them to do some of their own investing. If you can start setting aside some money for your children shortly after they are born, they will then have some money to start investing when they get old enough to learn and take part.

You as the parents have the greatest opportunity to influence your children to become well-rounded individuals. If you are willing to invest in your children’s future, they can develop a good work ethic, build good social skills, become outstanding citizens in their local communities and become financially independent. The investment is definitely worth it, because o­ne day your children may be the leaders of the future.

There’s been a lot of recent talk in the financial press about exchange traded funds, or ETFs. Some of you may already be familiar with them, but my guess is for most individual investors, the term “exchange traded fund” is just another bunch of financial gibberish – vaguely familiar but completely meaningless. Well, to artlessly coin a phrase from the movie Braveheart, “we’ll ‘ave to remedy that then, won’t we.”

In financial-speak, ETFs are hybrid investment vehicles that combine the trading flexibility of individual stocks with the diversification benefits of mutual funds. ETFs possess characteristics that make them particularly suited for investors who want a low-cost way to obtain broad exposure to specific sectors of the financial markets.

That’s mouthful, but what it really means is that ETFs are like mutual funds, o­nly better. And they are better for several reasons.

First, ETFs are cheaper than mutual funds. ETFs have extremely low annual expenses, often less than 20 basis points (0.2%). Contrast this with actively managed mutual funds whose disclosed expenses average over 135 basis points (1.35%) – and this doesn’t even include the additional 2% to 5% in loads, 12(b)-1 marketing fees, transactions costs, and soft dollar expenses mutual funds charge you but never disclose (except in the teeny-weenie small print nobody ever reads).

Second, ETFs have a lower turnover than most mutual funds. Because ETFs are passively managed and consist of a fairly static basket of stocks, they generally have little or no portfolio turnover. Contrast this with many actively managed mutual funds that can turn their portfolio over several times during the course of a year – incurring transaction fees o­n each purchase and sale.
Third, ETFs are more tax-efficient than mutual funds. Unlike actively managed mutual funds, which annually spin off taxable short-term gains and distributions to shareholders, ETFs ordinarily o­nly generate taxable capital gains when you sell them. Moreover, due to their unique legal structure, ETFs are also more tax-efficient than their passively managed index mutual fund counterparts.

Fourth, ETFs give you more flexibility than mutual funds. They can be bought and sold through your broker without restriction during the trading day, just like a traditional stock. This provides investors with significant flexibility compared to mutual fund investors, who cannot engage in transactions during market hours.

Fifth, ETFs allow you to more easily customize your portfolio than you can with passively managed mutual funds. Today, there are over 150 ETFs sponsored by a variety of institutions, including SelectSector SPDRs (State Street Global Advisors), iShares (Barclays Global Investors), HOLDRs (Merrill Lynch), and VIPERs (Vanguard). These ETFs focus o­n dozens of different market sectors, from bonds to technology, and everything in between. As a result, investors can mix and match them to achieve a desired portfolio balance, emphasizing certain sectors while staying away from others depending o­n the market environment.

Sixth, ETFs are more cash efficient than mutual funds. Since ETFs don’t need to maintain a cash position to satisfy redemptions, they can be fully invested in securities. This usually allows them to outperform a mutual fund with a corresponding basket of securities, but which incurs a substantial cash drag.

Finally, ETFs offer more sophisticated hedging options for experienced investors. Because ETFs can be bought o­n margin or sold short like a stock, they allow experienced investors to implement sophisticated hedging, market-neutral, and other alternative investment strategies.

Exchange traded funds aren’t for everyone, though. Because they are traded o­n stock exchanges, you incur a brokerage commission when you purchase or sell them. As a result, if you are making small regular contributions to your investing account, you’ll end up being swamped in commissions.

For more information about exchange traded funds, you can go to ETFConnect (www.etfconnect.com) or the American Stock Exchange website (www.amex.com). Or, feel free to take a look at my recent white paper entitled Exchange Traded Funds: Investment And Hedging Strategies at (www.flagship-capital.com).