I’ve been really surprised that the Dow Jones industrial average continues to drop. The last time it dropped to 8,200 I thought it would be the last chance at those prices. As I write this, the mark is at 7,500 and some indications seem to say that it could go even lower. Despite that, we’ve been buying some index funds with our Zecco account. Specifically we’ve been picking up Vanguard Total Index (VTI) and Vanguard All-World Ex-US (VEU).

However, one of my worst investments seems to have been PowerShares DB Oil Fund (DBO) which generally moves with oil prices. If you’ve been following gas prices you’ve seen the drop they’ve taken lately. What did I see in DBO that interested me? I remember that a barrel of oil was around $150 this summer towards it’s peak. Recently with it $60-65 it seemed like a tremendous bargain. Consider this 6 month chart of DBO:

Here is where I made my mistake. I didn’t look at the big picture. If I had, I might have remembered that $150 was due to speculation. I might have looked at this 20-month chart:

The chart might be a little small (you can play with a full version here), but if you Rip Van Winkle’d 2008, the price of DBO might seem in line with 2007.

The price of oil just broke below $50 and some are saying that it get as low as $30. If it gets below $40, I may have to dollar cost average and pick up some more of DBO. I can’t help but feel that at some point in the next 3 or 4 years we’ll see $100 oil again.

What are your thoughts?

Recommended by Lazy Man: Prosper.com - Make money by lending money or join and consolidate debt.

Many of us have been conditioned to think that living debt free is the only way to be. While there is some truth in this statement, if you’re completely debt free and using only cash, you’re hurting your chances of getting a new home, and you may end up in a situation that requires more money than you have without any recourse. Let’s find out why paying with cash is not always the smartest idea.

1. It hurts your credit rating.

You wouldn’t think this would be the case, but you do need to have some debt if you want to build up a credit rating. In some cases, people with absolutely no debt have a credit score in the mid 600’s, while those with two or three cards that they constantly pay on will have a score in the high 700’s. What’s the difference? In order to keep your credit rating high, you are going to need to have a little debt.

We’re not saying go run up ten cards and hope for the best. What we are saying is that having one or two cards with low balances is a great way to keep your credit score high. You’ll be getting the benefit of monthly reports on your credit history and you’ll be building that score up to the point where no one will be able to turn you down for anything.

2. Emergencies happen.

No matter how proud you are of being able to pay cash for everything – what would happen if you woke up tomorrow and discovered that you have a serious brain tumor that needs to be removed right away. The cost of the surgery is more than $300k and you don’t have any insurance. You’ve been paying with cash for years and your credit rating has suffered as a result.

In this situation, you may not be able to get a loan to cover your health costs and while some hospitals will work out a payment plan, they’re going to use your credit score to determine their risks. The problem with emergencies is that you never know when they will happen and they usually cost an arm and a leg. If you don’t have a savings account that is sizeable, you are literally one step away from financial disaster.

3. You won’t be making any extra money.

You know the old saying, it takes money to make money? If you’d like to get some extra income every month, you need to find a way to take advantage of opportunities for multiple streams of income, such as investments. Debt leveraging is one of the best ways to accomplish this since you won’t be using your primary funds for the new opportunity.

While debt has a bad reputation, there are good forms that are necessary if you want to make more money and have good credit. There is such a thing as good debt and if you manage your finances properly, there is no danger in having a little debt.

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When it comes to personal finance, there are few experts out there that are as popular as Suze Orman. She has helped thousands of people get their finances under control through her efforts on her radio show and through her books. Her no-nonsense, common sense approach appeals to many and gives people that kick in the rear that they sometimes need to get things done. We are fans of her previous books and were excited to give this one a read to see how it stacks up to the competition.

This was an interesting read, and shows how Orman has come full circle in her life. When she first started out, she was determined to be rich, and felt that money was more important than life. This colored her viewpoint and although she became hugely successful, she quickly found that she wasn’t happy. While many of us have that drive to make as much money as possible, there are few that consider the fact that it may make us miserable.

In order to help others learn from her mistakes, Orman put together a very solid book on personal finance that combines actual financial advice with a more spiritual aspect. This may help many people find that balance that they so desperately need. The advice, as usual, is very sound, and it’s hard to go wrong when you’re dealing with Orman. Whether you agree with her strategies or not, she is certainly someone that is well worth listening to.

The book is divided into nine steps, each one addressing common problems and offering sound solutions. You’ll be reading about how Orman first came to love money and the event that inspired her to build her empire. You’ll also be learning how to respect money without worshipping it, and the importance of trusting yourself to make investments, and to handle your own finances.

Step Seven, entitled Being Open to Receive All That You Are Meant To Have is a profound treatise on money and should be read more than once. We also got quite a lot out of Step Eight, which discusses the ebb and flow of your finances and how to handle every stage that comes your way. The last step covers true wealth and once again, this is a profound section in the book that goes well beyond simple money management, offering tips that can be applied to every aspect of your life.

We recommend this book to those struggling with their finances, as well as to those that may already be successful, but not happy. Money can’t buy everything, as we all know, and this book should help many find that right perspective that will help them become successful in many arenas in life. It’s a great book for those just starting out, as well as for those that are already retired. This is a fascinating read, and one that should be pondered carefully and revisited often.

Question:

Why is it that any simulated action I take cannot raise my score over 769 maximum? I pay all of my cards off entirely every month. My Mortgage accounts are amortizing and paid with auto withdrawals. Why can’t my score be raised?

Answer:

The answer actually differs for each consumer based on their personal credit history. In the future, we hope to release a product that will detail the top 3 or four actions you can take to actively manage your credit score over the coming 3 and 6 months along with the simulated change in score. But in interim, I hope this helps.

Two significant factors that compose your credit score are payment history and length of credit history. These two factors can only be changed with on time payment and time. No matter how good you are about your available credit or the types of credit used, this part of your score simply needs time to improve.

Derogatory factors such as delinquencies (30,60,90 days late payments) and collections will hurt your credit for a long time. It can take up to 7 years before those factors stop affecting your score.

Lastly, just remember that credit scores are logarithmic which is just a fancy way of saying the higher your credit score the harder it gets to improve your credit score. That is the final reason that bigger credit score jumps become more difficult.

Question:

I have excellent credit, but I just had an unused Discover card closed by the company because of non-use (19 months). I also had a credit card application declined because I have enough credit already available. Does this hurt my credit score?

Answer:

Closing an old account could affect your credit score in two ways.

• Length of credit history is an important component of your credit score. If your Discover card was your longest held credit card account it probably did have a negative impact on your credit score.
• Also, if you carry a monthly balance on your credit cards, the closure of any credit card account could lower your total available limit. This in turn would increase your credit card utilization, and yes — this could again lower your credit score.

As for the credit card application, in the short term an inquiry for credit will almost certainly decrease your credit score. The amount an inquiry will affect your credit score varies for each person based on other details in their credit file, but to give you a point of reference, my score dropped by 6 points for about 2 months when I last applied for a credit card. My credit score is now 793.

Question:

I have been reading all the entries, and just wonder how long it takes for a credit score to come up. I now have paid off all 11 collection accounts, paid bills on time this entire year, do not have any debt except for 5,000 left on car loan and student loans, all on time, do not have any inaccuracies, applied for Crowne Jewelers credit card-was approved, used the card, and have paid on time for 3 months, and my score is STILL at 545 after a year. What do I do?

Answer:

There is no quick fix in this situation since your past collections and delinquencies will stay on your credit file and impact your score for a few years. There are two things you should do.

1. Continue to pay on time. The negative factors will go away with time but any new one will stay with you for another 5-7 years. This is why I often say good credit takes years to build and a few bad decisions to destroy.
2. Demonstrate your ability to use credit wisely moving forward. This means doing exactly what you have started to do with the Crowne Jewelers credit card — use the credit wisely and pay on time. Your goal should be to open more trade lines. I see that 3-6 credit cards are generally a good number of credit cards. I suggest looking for cards with no annual fees and low rates. The key is to be responsible. Just because you have a few cards does not mean you should use them. Demonstrated ability to keep and use credit responsibly is the goal.

Question:

I have 3-4 old (6-7 years) closed loans on my report. None show past due. Will removing these from my bureau help or hurt my score?

Answer:

By loan, I assume you don’t mean credit card account. Generally speaking, you can not remove a loan from you credit report even if it is closed unless it is inaccurate. So in this case, you don’t have to do anything. Removing anything that is closed won’t really have an affect. Just don’t close old accounts until you read The Do’s and Don’ts of Closing Old Accounts.

With a few tips for managing money wisely, you should have no problems putting together a good working budget and learning how to manage your money. Here are some excellent tips for managing money wisely that will give you a great platform for getting started.

Budget - don't throw money away! Put it to good use!

1 - The first step is to figure out how you are currently managing your money.

Spend a month tracking every dollar that comes in, and every dollar that goes out. By the end of the month, you will have established a pattern of how your money is spent. From this, you can create a budget.

2 - Once you know how you are currently managing your money, creating a budget is vital.

Are you happy with how your money was spent in an average month, or is money going into the wrong expenses? Form a budget that allows for all of your expenses to be paid monthly, with money left over for savings. You should not be spending beyond your means, nor should you be completely broke by the time bills are paid every month, and a budget will ensure this.

3 - Revisit your expenses, spending practices and budget at least every few months, or twice a year to make sure that nothing drastic has changed.

Bills can vary a little bit from one month to the next month, but you should still have no problem paying them off unless your income takes a hit or your expenses climb considerably. If changes are occurring, it is vital that you make sure your budget reflects them, meaning that your budget should change over time as well.

4 - When forming a budget, you should make sure to include every potential expense, otherwise you may end of forgetting something and paying severely in the long run.

Your budget should include your housing, auto, insurance, home maintenance, food, clothing, personal grooming, dry cleaning, utilities, credit card payments, loan payments, other insurance payments, child care, entertainment, child support, legal expenses, medical bills, savings, vacations and income taxes. If it involves money coming in or money going out, it needs to be included in your budget in order for your budget to be efficient.

5 - If your budget is not working for you or you are still having difficulty finding ways to manage your money wisely, it may be time to rethink the way you are budgeting.

There are all kinds of different ways to budget and manage your money wisely, so change things up a bit if you feel like what you are doing isn’t effective.

These tips for managing money wisely are just the beginning. Learning to manage your money wisely takes time and effort, but once you find a budget plan that fits your needs, managing your money will be easier than ever, and that is when you can truly begin to get a handle on your finances, saving money every month.

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The average American is currently carrying at least some form of debt, even if it is small. We live in a society where overspending is common and credit card debt has become a right of passage. In many cases, you need to be in debt in order to start building your credit history. Without this, it is hard to get a house or even a car. But the question is – how much debt is too much?

When you are first starting out, you may have a lot of student loans and this further compounds the problem. Ideally, the average person should limit their debt to three times their currently monthly salary. However, this may not be possible in many situations. There are some things that we cannot help but go into debt for, such as a car or school, but there are certain kinds of debt that you can avoid.

The key is figuring out the difference between good debt and bad debt. Good debt is hard to have too much of in most cases, especially if you are putting it to work for you. Bad debt is very easy to rack up, and can be hard to pay off. This should be the smallest part of your debts. So, what is good debt and what is bad debt?

Good debt is money that you spend on something that will give you some sort of return. For example, your student loans are good debt, since they were used to further your education and help you earn a larger salary. A car loan straddles the fence, but it is a necessity, so for the sake of argument, we’ll put this in the good debt column. A home loan is also a good debt as long as you do not overbuy.

Bad debt is debt that does nothing but cost you money. Credit card debt is the best example of this, especially when your cards are used to purchase non essentials. You can look at bad debt as something that will never have any sort of return. A $400 shirt may look nice, but it’s never going to do anything but cost you more money, ie: dry cleaning. In fact, there’s a huge risk that it will even end up being ruined and all that money will go out the door.

It is also important to remove emotional attachment from the concept of bad debt. It is easy to say, but I love that shirt and I wear it all the time. The bottom line is, it is doing nothing for your bottom line, and as such, it is bad debt.

Good debt also includes what is known as leveraged debt. This is a type of debt that you use to create another income stream. Examples of this include investments or dividends that are constantly paying you back. This kind of debt is very good indeed and will only serve to enrich you. While you should never get in over your head with any kind of debt, good debt is a lot easier to handle.

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Last week, I was contacted by Piqqem. Then wanted to tell me about their service and get my thoughts.

I have to admit that I didn’t find the Piqqem site that interesting. I love the idea of crowdsourcing, but it seems to me that the stock market is already and efficient system. By buying a stock, I’m putting my vote of confidence into the company. The price of the stock reflects the sentiment of the crowd. So why do we need Piqqem? To get to the bottom of it, I decided to ask the CEO, Jett Winter. What follows is a brief e-mail interview.

Lazy Man: Please give us a brief overview of Piqqem. What should users expect to find there?
Jett Winter: Piqqem is a web app that applies the wisdom of crowds to stock market predictions. It captures users’ stock predictions, analyzes them, and then displays aggregate results back to the users, enabling them to see what ‘the crowd’ thinks about particular stocks. Users can expect to find an interface for making stock predictions, the ability to make user takes (short comments) on their predictions, user-editable wiki pages and financial timelines for each stock, and crowd sentiment on each stock and organized into lists (e.g. the 10 stocks that the crowd views most
favorably, the 10 stocks that the crowd most disagrees on), and visualizations of crowd sentiment, among other features.

Lazy Man: I’m a huge believer in crowdsourcing. However, aren’t the equity markets essentially an example of very efficient crowdsourcing? It seems to me that the best value of something can be gauged by people voting with limited resources that are dear to them - in this case people investing with their hard earned dollars by actually investing in an equity.
Jett Winter: This is one of the two standard criticisms we hear about the app. The first criticism argues that the crowd’s opinion already reflected in a company’s stock price, this is not exactly the case. The stock market is a summation of the demand and supply of stock market shares, in which few big buyers following the advice of few expert analysts completely overwhelm individual investors. Piqqem, on the other hand, gives an equal vote to all investors - whether expert or not - therefore providing a much more accurate representation of what the crowd thinks. Besides, the stock price today is what investors think of the company today - we want to know where the stock price is going in the future. The second criticism argues that if Piqqem works, it will invalidate itself. But if Piqqem invalidates itself, this means that there are a huge number of people trading on crowd wisdom, which means that the Piqqem crowd would have been accurate enough to get itself to that point, hence Piqqers would have made considerable money already. In other words, it would have been Piqqem’s success that, in turn, made it invalidate itself. Every system that tries to predict the market has this potential problem, but to date, it hasn’t actually happened.

Lazy Man: Those are both very good points. From what I’ve read on crowdsourcing and predictive markets it seems that they work most efficiently when someone is risking something of value to them. One of the first articles I’ve read regarding this is this one. Does Piqqem currently allow people to put something of value on the line? Will it in the future? I appreciate that everyone is put on a level playing field (Buffett can’t directly sway the Piqqem market), but wouldn’t you still want there to be cost/benefit for the person in choosing a stock?
Jett Winter: We currently are following a pure wisdom of the crowd model where every vote is equal. We actually don’t want weighting as that begins to move our model more towards the prevalent expert approach that we see today in the stock market - ie the large funds move the market where the little guy has no impact. We believe that not all public information is efficiently presented in the stock market and interesting information exists with individuals. Our job is to capture that information or sentiment. We may in the future add some incentives for voting, but as of today we are pure to the wisdom of the crowds.

Lazy Man: I noticed, from the footer of the site, that Piqqem seems to be a Crowd Technologies company. What other companies are in the Crowd Technologies umbrella? What else can we expect to see in the future?
Jett Winter: Crowd Technologies is the corporate company with Piqqem.com as one of its properties. We have also released Stockmoose.com which is a quick version of a relative ranking site for stocks. We have other ideas in the works although nothing we can discuss at the moment.

Recommended by Lazy Man: Zecco.com - Join now and trade stocks for free (no commissions).

Wokai.org launched today. Wokai allows contributers to aid small entrepreneurs in China through microfinance. A month ago I wrote a preview about Wokai.

Here is what founders Casey Wilson and Courtney McColgan wrote about launching:

Dear Friends,

We are delighted to report that Wokai.org is now live! Just two years ago, we were students in Beijing, dreaming about starting a microfinance organization.

Now, thanks to our advisors, chapters, designers, donors, families, field partners, friends, interns, investment committee, lawyers, pilot participants, programmers, volunteers and so many more, this idea has transformed into a dynamic international organization with an amazing website, to empower people in China to lift themselves from poverty.

We needed you and you were there, and for this we can’t thank you enough. Over the next two years, 44OO families from all across rural China will receive loans through Wokai. These loans will enable people to start and grow businesses in their communities. With the proceeds, they will send their children to school, and invest in their housing and health and brighter futures.

In the words of an entrepreneur we met in Ningxia province, “Microfinance allowed us to go from existing to living … existing is merely finding enough food to eat, but living is truly feeling the substance of life, our hearts, and minds.”

Thank you so much!

Are you vital to your employer?

If your answer is, "absolutely!" then congratulations, your job is probably safe. If you hesitated, it may be time to look at how to layoff-proof your position. With companies laying off workers across a broad spectrum of industries, if you're not vital you just might be expendable.

Make yourself absolutely vital to the success of your company… or, at least their survival during these difficult economic times.

1. Be a Da Vinci

Leonardo wasn't just a great painter. He could sculpt, sketch, and if you're a ninja turtle fan, clean up with swords as well.

The point is that knowing how to just do your job isn't enough. To truly layoff-proof yourself you need to know how to do other positions within your company. Take the initiative and start learning the daily tasks you would handle if you had other job titles.

2. Take on a new project

If you have to create a new project to take on one, do it. If a new project needs volunteers, volunteer. Heck, volunteer to lead the search for volunteers.

If there is anything new happening at your company, you want to make sure you are an important part of it. This may mean taking on responsibilities beyond your normal routine or job description.

3. Generate revenue

Often when a company is looking at cutting jobs, the absolute last cuts happen to the sales department. Why? Because without them, the company wouldn't bring in any money!

If you're a secretary, find a salesperson to help out. Can you help manage or optimize their leads? If you can't be generating revenue directly, become absolutely essential to someone who is!

4. Embrace change

Instead of complaining of the "good ole days", embrace any change that your workplace is going through. Not only will it be good for your mental health, you'll be seen as a good team player as well.

Note: This does not mean be a suck-up. This just means roll with the punches. Change happens. You might as well go with it.

5. Share your 100% commitment

Have a serious conversation with your boss (or higher up if possible) about your commitment to your company. Don't do this in an email or over the phone. Even if it's just stopping their office for a few minutes one afternoon, have this conversation in person.

When it comes to making cuts, they will remember the personal conversation that you initiated. It may not sound like much, but little details like this can make all the difference.

Share your best tip

How are you layoff-proofing yourself?

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Receipts from certain purchases are easy to enter into budgeting software because the entire purchase tends to be in one category. I know that a receipt from a restaurant will go into my Food: Dining Out category regardless of the items on the receipt. Grocery store purchases might be that simple as well, depending on the level of detail in your budget. Department stores can be much more time consuming to categorize, though at least one store is doing something to help.

I do a lot of my shopping at a Super Target, which has just about all of the products and food our family needs on a regular basis. When I enter the receipts into our budget software, I generally split the transaction into Groceries, Household, Baby Supplies, etc. It isn’t particularly difficult, but it does take some time and I probably miscategorize some of our spending on occasion. That’s why I was so pleased to see that Target has started categorizing receipts for its customers.

Categorized receipts have been common at grocery stores for some time. There, your dairy, fruits and vegetables, dry goods, etc., were all subtotaled separately. While such detail is great for those with highly categorized budgets, it wasn’t so important to me since I consider all of those items as part of my Grocery category. Categorized receipts from Target are much more useful. My latest receipt shows items in the Grocery, Home, Cleaning Supplies, Baby, and Cosmetics categories. Though subtotals are not produced, I am still able to quickly determine what I’ve spent in each category. I also combine certain groups in cases where Target uses more detailed categories than I do. I budget Cleaning Supplies in my Grocery category, for example.

I can only imagine that the economic downturn’s pressure on higher cost consciousness and revival of frugal tendencies prompted Target’s newly categorized receipts. Whatever their reason, I personally find these categorized receipts very useful. Have you noticed any other stores adopting a similar feature?

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I would like to thank LazyMan for tagging me with in his 6 word memoir: Money - freedom to do almost anything

By being tagged I need to write my own 6 word memoir….

Financial Freedom Equals Cashflow Leveraged Wealth

I think the statement says it all, but to expound a little… financial freedom is one of the most universal monetary goals of any individual, family, or corporation. The way to achieve financial freedom quickly and securely is through the use of leverage and cash flow management. Creating multiple diversified income streams of ever increasing cash flow using leverage of existing cash flow, assets, interpersonal network, and even debt.

And To Tag a few people to write there own 6 word memoir:

• brip blap
• Cash Money Life
• The Dough Roller
• Living Off Dividends
• Blogging Away Debt

A lot of people make use of their credit cards when shopping for the holiday season on the premise that they are going to pay all of the newly formed debt off within only two or three months time. Unfortunately, most people are still trying to tackle these credit card debts six to eight months later, and by then they are paying as much as 10 percent to 20 percent more because of credit card interest, making the holiday bargains much more costly in the end. This debt pattern is repeated every year for many Americans. Debt and the holidays tend to go hand in hand in this day and age, because incurring debt during the holidays is something that seems to make sense to some people, even though incurring debt for gift buying purposes is one of the worst possible things that you can do. Using credit cards for gift giving is an act that simply leads to impulse buying and overspending, along with resulting in a steep increase in debt.

A better approach to avoiding debt and the holidays is simply to save small amounts of money all throughout the year, putting together a fund specifically designed for holiday gift giving. Put together a list of people that you would like to give gifts too and how much money you can afford to spend on each one of them. This way you can plan ahead and pay cash for each purchase. As soon as the cash is done, you are done shopping.

If you find it to be difficult for you to save money all throughout the year, then consider joining a Christmas Club, which is something that many credit unions and banks still offer. You put so much money into the account a week into the account at your bank. Sometimes this money can be automatically deducted from your paycheck or regular bank account to save you the effort of doing it yourself. The account will most commonly accrue interest at the same rate as traditional savings accounts. In October, November or December the money will be transferred into your regular checking account, allowing you the necessary means to get your holiday shopping done, debt free!

Four other things that you can do to stay out of debt during the holiday season include:

- Setting spending limits. How much can you set aside reasonably every month based on your budget? Plan ahead and only put away the amount that you can actually afford.

- Putting together a list. Follow Santa’s example and put together a list of people deserving of gifts including smaller gifts for teachers, babysitters, delivery people, etc. Budget ahead of time through planning and you will not end up with any unnecessary expenditures.

- Setting a limit. Decide how much to spend on each person on your list and make sure to add everything up so it doesn’t exceed the spending limit that you set for yourself.

- Deciding where to shop. Comparison shop by shopping early and you can save a lot of money. If you wait until the last minute, you won’t have time to shop around and may end up paying more for something that could have been purchased for much cheaper a week or two earlier.

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Are you financially prepared for disaster? Answering this question may not be as easy as it seems, because there are a lot of different considerations that go into preparing yourself for one of many different disasters that can occur. For example, are you financially prepared to handle a natural disaster like a floor or a hurricane? Are you financially prepared for a financial disaster like becoming disabled or losing your job unexpectedly? Are you wondering what goes into determining your financial preparedness for different types of disasters? Here are some tips that may help you become more financially prepared to handle a variety of different disasters that would be taxing on your financial stability.

- Do you have an emergency fund, or a rainy day fund?

Most people have trouble putting away money for emergencies because they do not put enough thought into the types of emergencies or disasters that can occur. Have you put consideration into how you will deal with emergency home repairs, auto repairs, health and hospital costs or other expenses that can crop up quickly and without warning? Having an emergency fund is absolutely vital if you want to weather the storm that comes with these types of financial emergencies. If you become sick or lose your job unexpectedly, will you have enough money to cover your mortgage or keep gas in your tank?

- Can your credit score accommodate for an emergency loan or line of credit if you should suddenly need cash quickly to tackle a disaster or an emergency?

If your credit is good enough that most lenders will work with you, then you can consider yourself to be protected. If you do not believe your credit is good enough or if you’re not sure, it might be wise to take out a credit card now that you will only use in absolute emergencies.

Being financially prepared for disaster does not necessarily mean having thousands of dollars floating about waiting for a reason to be used. What it does mean, however, is anticipating potential disasters or emergencies that could come up, and responding to that risk by preparing accordingly. Having a few hundred or a few thousand dollars saved up in advance can really be useful should an emergency come up that prevents you from working, or that requires that you spend a great deal of money on something like home repairs, car repairs or medical bills.

If you do not know the answer to the question “are you financially prepared for a disaster?” then it may be time that you sit down and really figure out how much financial preparedness you have and need in order to combat any emergencies or disasters that may come up over time. This is the best way to make sure that you always have enough money for a rainy day, or to tackle a period where you need more money than you are currently making.

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In this day and age, everyone is hurting for money, and locating legitimate high yield investments is not easy. Aside from scams, another consideration that needs to be made is the potential return on any investments that you make. Despite the fact that there are many attractive investment opportunities available both online and off, the appealing returns that they promise on your investments are not always what you will actually end up with. When investing, you should fully investigate all investment opportunities to make sure that the legitimate high yield investment offer you respond to is actually what it claims to be.

What are legitimate high yield investments?

In any situation involving a high yield investment, there is always going to be a degree of risk regardless of whether it is recognized as a legitimate investment or not. It is recommended that you should only invest what you can afford to lose in any high risk high yield investing opportunity. All high yield investing opportunities are high risk in nature, meaning that if you find something that seems to good to be true based on a lack of apparent risk, you’re probably dealing with an investing opportunity that is only going to end up burning you in the end. If you end up investing a huge amount of your funds into a high risk high yield investing strategy, and you find out later that it is not a legitimate high yield investment, then you can end up in bankruptcy, or worse. Do not invest too much money until you know what you are dealing with, no matter how bright the results seem to be, because there is no telling what will happen as early as a few months down the line.

When it comes to investing in a legitimate high yield investment, there are two different basic approaches that you can take.

One is an active approach and the second is the passive approach.

The active approach involves researching the investment opportunity to find out who is collecting, who is managing and who is buying the returns. People who take the passive road give their money to someone else and wait for their money to be invested properly.

In other words, the difference between actively and passively investing in legitimate high yield investment options simply falls on whether you do your own research and investing, or if you trust your capital in the hands of an expert who has an investment opportunity to put your money into.

If you are not sure how to tell whether an investment opportunity with a high yield is legitimate or not, you may be better off trusting an expert. Most investment strategists have numerous clients with all kinds of different investing strategies. Because they work with so many different people, they have a better understanding in general of what investment opportunities are out there, and which do and do not pay the returns that they promise. Remember that playing it safe is always better than risking your money for a high yield investment and getting burnt in the end.

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Right now, if there was a market that had bad news written all over it, it would be real estate. The housing crisis has made investors jumpy, the economy appears to be tanking and home values are plummeting across the country. Would you believe that this is actually a good time to get into real estate? With the proper choices and management, this is absolutely true.

Down markets