Start planning now for your sunset years (Photo: wikimedia.org)

In this last article of the retirement series, you will learn how to create a sustainable lifetime income without having to resort to annuities or credit cards. You desire to live well and maintain your standard of living in your retirement years, but you do not know how to do it without depending on what may be shifty advice from a broker or financial advisor. It’s time to put some common sense into your retirement investing. Follow these strategies and you will be well on your way to creating the life you desire.

Start as young as possible

The younger you start investing in your retirement fund, the more you will be able to make in the long term. However, it is human nature to put this off until the last possible minute. This is not advisable…let me tell you why. Say you start investing when you are 25 years old, and you put in $10,000 in a retirement account with annual additions of $5,000. Your interest rate is a generous 6% compounded annually. In 40 years when you reach 65, you will have $923,095.60. Pretty impressive, right?

But what if you wait 10 years? At 35, you start with the same amount of principal, and the same amount of money added annually. Everything remains the same, except you only have 30 years instead of 40. Now, you would only have $476, 443.30. That is a LOSS of almost $500,000!! OUCH! And what a big loss!

The point is to start as soon as you can, so that you can save as much as you can by the time you are ready to retire, without the need to rely on credit cards consistently in your golden years.

No need for over-diversification

Warren Buffet once said about people who spread out their investments in an effort to diversify, “Only people who do not know what they are doing diversify.” And yet, financial advisors who are supposed experts tell you to diversify all the time in order to “spread out the loss”. Of course, in reality, you are spreading out the profits you could be making. The reason is that when you have more money in a stock, you own more shares. The more shares of a company that you own, the more money you can make when the share price skyrockets. Of course, the opposite can be true: The more shares you own, the less value those shares represent when the share price bottoms out.

Over-diversification means that you have a little money here, a little money there—all earning just a little money everywhere. However, if you put more money into fewer investments, your money has the potential to grow higher and faster. The key to success with this is to thoroughly research companies and hold on to your shares for the long term.

Buy low, sell high

You must buy when everyone else is selling, and sell when everyone else is buying. Basically, buy low and sell high. This is the logical way to invest.

When the market is in a downturn, you can buy more shares for less money when everyone else is losing out on a golden opportunity. When everyone else is thinking that it is the perfect time to buy shares as the market experiences its highs, this is the perfect time to sell or hang on to your shares. But never buy during this time! (You may regret it when you run out of cash and need to use your credit cards for basic survival!)

Don’t believe your broker ALL the time!

A man invested $10,000 in 1965, on the advice of his broker. Shortly after he invested, his broker suddenly dropped dead of a heart attack. Well, the man didn’t get any “advice” about when to take out his money, so he held on to his shares for about 35 years. At the end of those 35 years, his investment was worth over 2 million dollars! Imagine if his broker was still alive and told him to take out his money when the market had gone down during that time!

The point is, many financial advisers and brokers tend to go with the emotional flow of the popular sentiment, rather than applying logic to investing. Their clients then adopt this viewpoint. Not every adviser or broker does this, and you can get some pretty good advice from them occasionally. However, do not believe your adviser or broker all the time. Instead, take control of your future!

Dicitonary.com says cheeky is “Impertinently bold; impudent and saucy.” Make a cheeky investment with your payday loan and you will be glad that you did it. But how are you going to do it?

Never enough money

There is never enough money. When we get $1, we will need $2 and if we get $100, we will have $200 in needs. We never save enough to make that much needed and ever forgotten investment. This month we say we will start with it the next month. And when next month comes, it’s yet another next month. It just goes on and on. We always find it hard to find that extra money to make investments.

Do you need security?

Having your own investment is undoubtedly a necessary security for every human being to feel financially comfortable. The established fact about money is, never getting enough to spend and never having enough to save but spend we do and save we don’t. Why is it so?

Well, you will never find an answer for that. It is simply how nature works, at least for some people. But if we want to invest, we should somehow find a way to break this cycle. For this we have to be sensible and act intelligently enough. How exactly we can use our intelligence to find money is what you are going to learn here. Yes, you guessed it right, if you think your resource is your payday loan.

We will never notice

Those of us who do not invest or make an effort to invest, do live mostly in the present and are not overly bothered about the future. So, it will not bother us if do not have enough money to spend in the future if we have enough for the present. If we use this human psychology to our benefit, the money scarcity we find hard-pressed to invest can be solved.

To put it simply, make a commitment on your future income to enjoy your present income. That is to say, take a cash advance from your future income and use it for an investment which you never could get to do otherwise, then everything else will fall in place. You will be short of that extra bit from your income as you pay back the loan, but you probably would not actually notice it, as you will never have access to it, to feel the loss.

After the loan is paid off, take the same payments you were making and put them into your investments. Make this a habit and you will have good money set aside for investing. If you are not sure how to get the cash advance loan that I’m talking about, then simply read on and learn how simple it is.

You can get this done simply by making an online application to a good lender like Personal Money Store or reaching them over the phone. If your application is approved, you will usually have the money transferred to your bank account within 24 hours.

With Personal Money Store, there are typically no complications like credit checks or faxing. You would not be charged for any exorbitant fees or interest, just the normal fees like any loan which can easily be paid with sensible investing. You simply have to direct your bank to invest that money wherever you want it to be.

How does this sound for a cheeky investment with your payday loan?

Will we ever learn from our mistakes? Probably not. The stock exchanges went from a high-point in June 2007 to a low in March 2009, dropping about 50 percent in under 20 months.

2006 and 2007 Celebrations

We should have seen it coming, but most of us didn’t. In fact, most investors were too busy rejoicing, celebrating their Market wins in 2006 and 2007 to look around and see if they were about to careen off the cliff. We were taking and repaying Cash Advance Loans at a high rate of knots. All was well with the world.

It’s called overconfidence – the belief that you’re more skilled than you really are. That’s the reason we get ourselves into investment hot water. Overconfidence makes you unwilling to recognize bad news.

Overconfidence comes from early success

It happens to all of us who play on the market at some time. We buy some stocks. They go up. We sell and we’ve made money, all at the cost of a couple of phone calls and some broker’s fees. You then attribute all this to your own skill instead of the dumb luck it’s likely to be.

This spectacular operation of yours, on which you get good mileage at dinner, at lunch and in the locker room at the golf club, turns you into an instant stock genius.

The Accidental Investor

That tendency toward overconfidence gets magnified when it’s combined with our tendency to use past situations to evaluate risks in the here and now. Experiments have shown that when people risk their own money on an investment and succeed, they’re likely to take on even more risk the next time around. Why? They don’t think of that money as theirs. It feels like they’re playing with house money.

House money

Let’s say you put $1,000 into a share that triples; now that it is priced at $3,000, you’ve got $2,000 of “house money.” So long as any of that $2,000 gain is left, you may shrug off any losses as a reduction of the house money, rather than a depletion of your own.

Somehow, losing the house money hurts less than losing your “own”, even though, strictly speaking, all the dollars are the same. This highly dangerous “house-money effect” can egg you on into taking an ever-escalating series of risks until you get wiped out.

It Won’t Happen Overnight

If you want to beat the market, you have to battle your tendencies toward over-confidence and judge risks in relation to recent failures and successes. You can also compare your investment performance to market averages to help keep it contextualized. Finally you must develop an investing strategy to help you assess each risk on its own terms.

It takes years to become good at investing, to learn what information is important versus what is just noise, and to get over risk aversion and away from the idea of house money. Just like master carpenters are not made in a day, neither are master investors. But with patience and a little self-awareness, you can do it.

I bought today

I just couldn’t stand looking at all these bargains any more. I broke down and bought today. Let’s see what happens…

I have often thought that it might be a good idea to get into investing. The thing is, it’s kind of scary. I don’t really know where to start. People are saying that it’s good to buy while stocks are down, but where to begin? I don’t know how to start, and I’d have no idea how to pick the right investments.

Lucky for me, I came across this article by David McPherson, the Founder and Principal of Four Ponds Financial Planning.

Join the club

Just like you can join a book club, or a cooking club, you can join an investment club. Investment clubs are groups of people that contribute money every month to a shared joint portfolio. Investment clubs have been around since the 1940s. They became popular in the 1950s, and now they can be found pretty much anywhere in the United States.

Benefits for beginners

For people who haven’t done any investing before, the other members of the club can be a big help. Everyone can share information and it can help the unfamiliar language be less daunting. It’s kind of like payday loans — you are much better off if you understand what you are getting into.

Jen Sterling, the president of a Virginia-based investment club, said she and fellow members have tackled unfamiliar territory together without feeling intimidated. “We can look at each other and go, ‘What the hell’s a margin?’ or ‘What’s a stock buy?’ or any of these terms that we don’t know — we can ask each other. This is a case where we can all come together comfortably and learn something we were never taught.”

Typically, members contribute a set amount of money each month. Then they make investments based on decisions they reach during monthly meetings. Between meetings, members research investments to prepare for the next meeting.

Help in hard times

McPherson also recommends investment clubs for people whose portfolios have taken a hit during the recession.

The education and support provided by an investment club can help small investors navigate these difficult times and provide a buffer against the urge to panic and sell stocks at low points, he says.

Personal reviews

Marie Gaziano from Massachusetts says her investment club has given her strength and focus. Even though her club has been around for decades, they are still taking new members. Other investment club members have great things to say about their groups.

“It’s a wonderful learning experience,” said Martha Schilling, a Dresher, Pa., financial planner who has been involved in three different investment clubs. “They promote value investing and not trading, getting a solid foundation, researching companies and doing comparisons, monitoring them.”

Something for everyone

While the median income of people in an investment club is generally higher than the average income in the country, McPherson assures readers that these clubs aren’t just for the wealthy. Monthly investments are often less than $100, so people in many different income brackets can join. The key is finding the right club for you.

Where to go now

There are a couple web sites you can visit to find an investment club. The Securities and Exchange Commission has information on investment clubs on its site, www.sec.gov. You can also visit betterinvesting.org. Or check out the Motley Fool web site.

It wasn’t only you. Master investor Warren Buffett had a bad 2008 too. However, he has the wherewithal to remain a buyer of shares, and says the economic disarray gives him a tailwind.

Warren’s annual letter

In his eagerly awaited annual letter to investors, Warren Buffett revealed that the value of his company, Berkshire Hathaway, fell by 9.6%, the worst performance in Buffett’s 44 years at the helm.

However, everything is relative. Berkshire’s 9.6% fall compares favorably with the 37% fall in the index.

The shambles

It’s a shambles, alright. When the 78-year old Buffett says there was “A freefall in business activity…accelerating at a pace that I have never before witnessed” you know things are bad and unprecedented. And things aren’t going to get better anytime soon. Buffett says “…the economy will be a shambles throughout 2009 – and for that matter, probably well beyond…”

The optimist

Buffett remains an optimist. He says the U.S. has faced many challenges in the past -  the Great Depression with unemployment as high as 25%, two great wars and virulent inflation that led to a 21% interest rate in 1980.

Unemployment is around 7% and will rise to 10%, base interest rates are effectively zero and a massive government stimulus package is on the way. Buffett says, “America’s best days lie ahead.”

Buffett makes mistakes too

Buffett admits his failures and lists them in his letter. He also admits to not anticipating the dramatic fall in oil and energy prices that occurred in the last half of the year. He says, “…the terrible timing of my purchases has cost Berkshire several billion dollars.”

The darkest days are usually the best days to be buying shares and Buffett says in this year’s letter, “When investing, pessimism is your friend, euphoria the enemy.”

What lies ahead?

Investing in shares is a long-term business, except if you are a gambler, a wild speculator or day-trader. America’s best days may lie ahead, but we don’t know how far away that is; they may come in 2010, 2015 or 2020. It’s impossible to predict.

Investing Is Not Perfect

Warren Buffett is a great investor and super successful money maker. But he is human after all. He trusts his instincts and his judgments, and sometimes he gets it wrong. Investing is not a perfect science. A success rate of around 60% accuracy in your pick of shares should be enough to put you among the top 10% of all investors.

The fear factor

Buffett is an informal adviser to President Obama. He explained that the consequences of the U.S. housing bubble are now “reverberating through every corner of our economy.” Late last year, said Buffett, “the credit crisis, coupled with tumbling home and stock prices, had produced a paralyzing fear that engulfed the country. Fear led to business contraction, and that in turn led to even greater fear.”

No write-off

Buffett is the best investor of all time. At the age of 78, there will be some ready to write his investing epitaph, citing his mistakes and gloating over his record in 2008, but don’t write him off. I personally, funds allowing, will be a strict follower of his investing policies. I would even advance cash to one of his investments.

Investing can seem confusing and tricky when markets are operating normally. Now that the stock market, real estate and the financial system as a whole are so shaky, it is even more difficult to figure out what to do.

Luckily some experts out there have advice for young people who are lucky enough to not only have an income but to have money to invest as well.

Figure out your objective

Financial experts agree that what you should do with your money depends largely on your long-term goals. You might be focused on paying student loans and want to remain mobile for a few years. Or you might want to stay put and invest in real estate while it’s cheap.

Whatever your situation is, advisers have a few tips that apply to everyone.

Cool cash

Whether you’re using extra money to invest or to pay off debt, make sure you are also putting some away. It might seem like it makes more financial sense to pay off a loan that is costing you interest. However, it is imperative to keep an emergency cash fund on hand. That way you won’t end up owing more interest on quick loans or credit cards. If you want to pay off your debt, avoiding getting into more debt is critical.

Financial advisers say the minimum you should have on hand is a month’s worth of expenses. Ideally, you should have three to six months of expenses saved, if you can afford it.

Investing in real estate

Low housing prices right now make purchasing a home tempting. But there are a couple of things you must take into consideration. First, credit is extremely tight right now and it will be difficult to secure a mortgage. Also, banks are requiring higher down payments than the 5 or 10 percent down payments they commonly accepted in years past.

Finance experts agree that having an emergency cash fund is the most important step toward financial stability. Spending your emergency savings on a down payment defeats the purpose. Also, if your job situation is at all tenuous, as it is for many right now, taking on such a large debt could be very dangerous.

Risky business

A CNN money expert makes the assertion that young people can afford to invest almost all their money in equities because they have time to make up for any losses. However, different factors should affect how much risk you take with  your investments.

Just as with buying a house, job security must factor into your investments. You may be planning to invest long term, but what if you lose your job? Will you have to pull your investments to pay for everyday expenses if you get laid off? That’s not to say you shouldn’t invest, but unless your job is very secure, you may want to start off with lower risk investments. You can always redistribute your portfolio when the markets get better or if you get promoted or otherwise receive a sign that your job is secure.

How much heat can you take?

Also, you must assess your ability to deal with a fluctuating market. Some investors think they can handle watching their portfolio fluctuate.  However, many end up cashing out their investments early because they get too nervous about losing money on their investments. If you are the kind of person who will be checking your investments frequently and adding up dollars and cents, you probably shouldn’t invest in equities, which are very risky.

I think it is the best time to make a profit from gold and a payday loan can help. It is actually a very simple investment; you do not have to watch it like a hawk to make profits like you do in stock or currency trading. You just have to check the market every day and if the rates have gone up, sell it off and make a profit. Keep watching; when the rates come down buy and sell when it is up.

If you keep rinsing and repeating this process you can make a neat profit before the next payday. One other positive factor about this investment is that the price of gold is at its all time high and so it has become the investors’ fancy. So there is no time like the present to make profits from investing in gold.

The trends with gold

Granted this is a volatile market but well within our control.  Even if we do not sell it immediately, we will still be able to profit from our investment. The basic trend of gold prices has been known to shoot up so it can also be a good long time investment. And, if you have a piece of gold, you can choose to sell it anytime you want, so it will never put you in any debt situation. Maybe the profits you make will not be as high as in real estate investment or trading investment but still it is a good bet with your money.

Historical data shows gold to have never let down its investors. The most important factor with gold is that it is a good hedge against inflation. I am not talking about big investments, only the amount of a payday loan. Once you profit, you won’t even notice that you have taken a loan on your next payday. Don’t you think with recession looming around you and gold prices shooting up, it is a good time to invest in gold?

Getting the loan

If you are ready to invest in gold with a cash advance from your income, then you would want to know how to get the payday loan. It is actually a loan from your income which will be due by your next payday, as the name suggests. You can apply for this loan by clicking the “apply” button right on this. Typically, if your application is approved, you will have the money transferred to your bank account within 24 hours, sometimes even within 2 hours. Typically, with a payday loan, they don’t even check your credits or require faxing, and they won’t even charge you for submitting the application.

The terms and conditions will be laid down before you sign and that is all you will be bound for. You don’t have to worry about any hidden charges or exorbitant interests. Usually they are no different from any other ordinary loans. You can get up to $1500 with such loans. These are short term loans for small amounts so you usually have to repay them by the next payday, unless you sign up for some other terms.

If you think you should invest some money somewhere go ahead and get your payday loan and invest it in gold.

Payday loan to trade, have you ever thought of such a possibility? This is very much possible, especially with FOREX. This is an interesting way to make profit from what you earn. As it is, it is not always possible for us to save enough from what we earn. But if we can double or triple our income using certain risks, then it is something that we should look into. This is not going to be a high risk investment but something we can have control of, if we play it safe and are not overly rash. If you are ambitious and want to make money, then you should take some risks at some point of your life. If you are interested then I can explain to you how it can be done.

Our income and the way we use it:

When we get our pay, we will have the important things we have to pay and then we waste the rest.  We had plans for the money, but we seldom use it as we had planned.  At least if you are like me this happens, often acting impulsively, never getting to do things which we might have yearned for.

How to Tackle:

The first thing you have to bear in mind is that you have got to be a little principled. That is, take an oath that, while trading you will use only the money you have taken as a cash advance from your payday income. Also make sure that the amount you take as a loan is not more than what you can afford, if you are to lose money on a trade. Since you are also working, you would not have much time to spend on trading, so you will be wondering how you are going to trade when you do not have the time. Well, that is where we make use of modern technology. That is, find some good trading software that will do most of your job once you set it up to your convenience. This done, you can at least be assured that you will win trades more time than you lose. There is some good trading software that even a novice can use to their benefit.

Possibilities:

If you do see things in the proper light, you may see a whole load of possibilities. When that becomes the reality it may even change your life beyond your wildest dream. And the other possibility is that even if you lose, you are not going to lose more than your payday loan. Does this not sound interesting, making good money without having to actually drain your pocket from your income?

Get going:

If this much makes sense to you, start taking steps to do FOREX trading. When you have figured out how it is done, apply at personalmoneystore.com for your payday loan. All you have to do is get in front of your computer and apply for the loan. Typically you will get it on the same day; the amount will be transferred to your bank account. No credit checks or faxing are required, if you do it with the right lender. If things go well in your trading, you would not even have to wait till your next payday to repay the loan.

There’s nothing secretive or deceptive about payday loans. Terms are listed up front, employees will explain them to customers and the repayment schedule – particularly with the installment loans variation – is flexible.

However, recent developments in the financial headlines have shown that many people – famous people, sophisticated people and organizations, including Elie Wiesel, Steven Spielberg, and the Gift of Life Foundation  – are prone to a scam that’s nearly a century old. A recent Google search even revealed more than 100 such schemes being investigated all over the world. Wall Street money manager Bernard Madoff has fooled investors worldwide to the tune of $50 billion dollars. It is believed to be the largest scam in Wall Street history.

He got them with a modified Ponzi scheme

Named after Charles Ponzi (1882-1949), who raked in $15 million in nine months in 1919 and 1920. Ponzi was considered by those he was swindling as the greatest Italian ever. “You’re wrong,” he said, “there’s Columbus, who discovered America, and Marconi, who discovered radio.” “But, Charlie, you discovered money,” his marks exclaimed.

A Ponzi scheme works something like this

If you go to a friend, let’s say it’s Jeremy Piven, and convince him to invest $500 in a business opportunity, you promise that you will double his money in one month. Next, go to actresses Rachel Weisz and Lisa Rinna and convince them to invest at $500 apiece. Use that $1,000 to pay off Jeremy Piven, and he’s hooked. He goes on to tell all of his “Entourage” friends, and four of them come around and make deals with you at $500 a pop. That $2,000 you rake in is then split between Rachel Weisz and Lisa Rinna, doubling their money as promised.

Now you are the hottest thing since sliced bread and everyone wants a piece. Take money from eight more, then 16, then 32, and so on. Once the pot is thick with cash, run off with the profits instead of paying back investors in the pyramid scheme. You are now Bernard Madoff, you have broken the law and payday loans won’t bail you out.

Not all Ponzi schemes are illegal, however

Social Security, where the younger members of the population pay part of the retirement benefits of the older, is a legal Ponzi scheme. Asset pricing bubbles, where a middle man takes a cut every round, is another type of legal Ponzi scheme. To illustrate how the latter works, people take out mortgages they can’t afford, but assume their home increasing in value will offset this. These homeowners are engaging in legal Ponzi activity.

Madoff’s scheme was a little bit different

According to Peter J. Henning in the New York Times, Madoff “1) preyed exclusively on very wealthy investors and 2) offered steady returns of 10 percent a year rather than a quick, spectacular gain.” But ultimatley, it’s still a Ponzi.

The federal government is going to try to pick up the pieces, in its fashion. They may spend billions to bail out the last-round players in Madoff’s scam to protect the overall economy. Participants will get some of this bailout, but they will still lose significant cash overall. Taxpayers foot the bill for the bailout, which may generate greater net losses than the people who were duped.

Be angry. Be very angry. No more bailouts

Unfortunately, bailouts have a tendency of reinforcing riskier Ponzi schemes. Let’s hope that the $700 billion federal bailout doesn’t create a monster that swallow’s Madoff’s Prometheus Unbound whole. This may not mean much to the average consumer, but it supports our culture of victimization and greed, which is in no way a world in which children should be raised. Payday loans are not to blame for what these game-players have done to the economy.

Payday Loans just might become more valuable than buying stock in precious metals like silver, platinum, palladium and even possibly gold in the year 2009. Recently these precious metals have been declining in value due to the major slowdown of the economy and the price of crude oil dropping significantly. Forecasters are predicting that these precious metals are only going to decline in value even more through the year of 2009. I know what you’re thinking: “Payday loans are not more valuable then gold,” but they can help those who are about to default on mortgage payments which in turn keeps foreclosures from going up.

What Other Stocks Are Seeing a Major Decline?

Some of the world’s largest mining companies are struggling on the market as well. These companies are being asked to cancel some deliveries and reduce production levels of things like iron and coking coal. The largest decline on the market this week goes out to the retail industry, who is suffering major hits due to the recession and future financial fears of the general public.

Retail took a massive impact on the Monday after Black Friday, as stockholders of major retailers like Wal-Mart, Macy’s, Target, and JCPenney saw considerable losses in the value of their stock. With shoppers focusing on saving money and spending less this holiday season, the retail market is sure to see some more sizable losses before the shopping season is over. (Consumers remember to be responsible this holiday season and not use faxless payday loans to purchase gifts for loved ones or yourselves.)

Grim Days for Wall Street

Last Monday, December 1, 2008 marked a harsh reality of recession for Wall Street as the previous week’s stock gains were wiped nearly in half. The DOW dropped 679.95 points, Standard & Poor’s 500-Index stock lost nearly 9%; manufacturing dropped to its lowest since 1982; and for every one stock that rose on the New York Stock Exchange, several more fell. Not to mention that the US Dollar went down again and the price of crude oil and gold dropped as well. With the way that the economy is right now, it looks as though Wall Street is in for a very bumpy ride in 2009.

Unfortunately the news for the stock market will most likely not be favorable for the months ahead as unemployment, retail sales and home sales continue to dwindle. With financial worries of the recession on everyone’s thoughts and the lack of consumer spending, the market is bound to see more downturn, further affecting the economy.

There Is Hope

President Elect Barack Obama is installing hope back into investors with making the economy his primary focus and the aggressive actions that he his taking to get the nation back on its feet. He has put together an impressive economic team and says he will have an economic plan ready to go for when he steps into office. All Wall Street can do now is ride out the recession wave and look forward to strong economic plans to be put into action to get the market back on track.

And remember Money Bloggers, if you need help with financial crunches, payday loans are available to you.