Your Questions About Investing

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Richard asks…

What has been your experience investing in Tax lien certificates?

My husband and I have been purchasing tax lien certificates in Florida and I would like to know if anyone out there has experience investing in other states and what that experience was like. We are planning on investing in other states but would like to know the best ones with the highest interest and least amount of redemption period. Thanks for your input!

financi4 answers:

Most people think they are getting an equitable and forecloseable interest in the property instead of an instrument bearing interest ion payment if it ever happens.

A risk like any other investrment

Chris asks…

How do you start smart investing in stocks?

I was told to do stock options over investing in stocks? Yet,I find the risk factor is too high in options. So I rather invest more in stocks and see what type of outcome manifests itself. What would be the first step? Besides going on these sights like Etrade etc. Is wall street still open for the little guy? Please help!!!

financi4 answers:

The first step is to educate yourself. There are many books on investing (Investing for Dummies?), and many, many online sites that can help. Every major investment company has a web site with educational info (Schwb, Vanguard, Fidelity, T Rowe Price). Also every mutual fund company. Most novice investors start with money markets and mutual funds. See Morningstar.com for info and fund evaluations.

You need to understand a) the risk of whatever you invest in. There are different kinds of risk, and EVERY investment has SOME kind of risk, even Treasuries.
B) how the investment works: will it produce interest income, dividend income, capital gains, tax writeoffs? How valuable each of these is to you depends in part on your tax bracket and what your goals are (how far along in life you are–are you investing shortterm and need money in x years or months, or are you investing for your children’s education or for your own retirement?) Don’t invest in anything you don’t understand!
C) if someone is selling this product to you, what is their commission? Some products cost 7% upfront. This reduces the amount that is actually invested. If you are buying online, what is the per-trade commission? Are cheap commissions important to you, or is it more important to have a person you can talk to and ask questions of? This will determine WHO you invest with.

Here’s a web site with lots of info:
http://www.investopedia.com/terms/i/investmentpyramid.asp

And here’s a picture of the “investment risk pyramid”, showing least risky investments, going up to the most risky investments.
Http://i.investopedia.com/inv/articles/site/investment_pyramid.gif

Good luck to you!

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