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Are you earning a higher yield on your money with minimal volatility? No? If not, then Real Estate Investment Trusts, also known as REITs, which pay yields of 5 to 13 percent, may be the investment you are looking for. Real estate investment trusts are publicly traded investment vehicles that own different kinds of commercial real estate or commercial mortgages. They pass on at least 90 percent of the income they earn from rents and mortgage interest on to their shareholders as dividends on a monthly or quarterly basis. Tax law says that as long as they pass this income to stockholders, REITs do not have to pay income tax at the corporate level, one of the big reasons that REITs can pay such high yield

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Topics: Investing ,

Are you looking to earn higher yields on your money than you can get from bank CDs or Treasury bills? If so, you may want to consider preferred stock funds as an alternative to earn an annual yield from 5 to 7 percent.

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Topics: Investing ,

Are you willing to take a bit of risk to earn better yields than you can get from bank deposits and CDs? Not high risk - but a bit. If yes, then an alternative to learn more about are Business Development Companies, also known as BDCs. Business Development Companies are publicly traded firms which lend capital to medium and small companies that can’t qualify for loans from traditional banks or other sources of financing. BDCs were created by an act of Congress in 1980 to help smaller companies grow and create jobs. BDCs pay annual yields of 5 to 10 percent, sometimes on a monthly basis, and sometimes quarterly. The managers of the BDCs often oversee the development of the companies they lend to by taking a seat on the board of directors. BDCs usually lend to a widely diversified portfolio of 100 or more companies in many industries to spread their risk. Because the borrowing companies are younger and less established, they have to pay a higher interest rate on these loans than more mature companies, translating to higher yields for you. As long as BDCs pay out 90 percent of more of their income to shareholders in dividends, the BDC does not have to pay any corporate income tax, which is another reason they can pay such high yields.

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Topics: Investing ,

If you are looking for an alternative way to earn yields that are much higher than bank deposits and CDs and are still relatively stable, master limited partnerships, also known as MLPs, might be worth considering.

Master limited partnerships are publicly traded companies that own energy infrastructure such as pipelines and storage facilities. They collect fees for letting oil and gas companies move their product from fields where oil and gas is drilled out of the ground to refineries and ports.

MLPs are not taxed at the corporate level as long as they distribute at least 90 percent of their profits to partners. This means they pay much higher yields, typically from 5 percent to 13 percent, than companies which must pay corporate income taxes on their profits before they pay dividends. Some MLPs pay distributions monthly, and others pay quarterly.

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Topics: Investing ,

Inverted yield curves are what’s behind negative interest rates and you need to pay attention because a recession may be looming ahead. Let’s take a look at why inverted yield curves matter to you.

The yield curve compares the interest rates paid on Treasury securities based on when they mature. The shortest maturity is 3 months and the longest is 30 years. In normal times, the yield curve is positively sloped, meaning you earn more from long term interest rates than you do from short term interest rates. That’s because investors expect to earn a higher rate for lending out their money over a longer period of time. But lately the yield curve has become inverted, meaning that short term rates are higher than long term rates. For example, 10 year Treasuries now yield about 1.5 percent and 2 year Treasuries yield 1.6 percent.

Why is this happening? It’s happening because a number of economic markers are causing investors to worry about the long term outlook for the US economy.

1. The Feds have raised short term interest rates 9 times since the end of 2015.
2. There’s concern that the global economy is slowing because of the escalating trade war between the US and China. The fear of the trade war has pushed long term rates down sharply.
3. Worried investors from around the world have been piling their money into long term US Treasuries as a safety haven. Bonds are traditionally considered to be the most conservative and lowest risk investments, regardless of what the stock market or the economy does. Increased demand for bonds pushes up their price, lowering their yields.

Hang in there for a minute because you really need to understand the implications an inverted yield curve may have for you.

Many economists see an inverted yield curve as a sign that the US economy is going to fall into a recession. Every recession for the past few decades has been preceded by an inverted yield curve - but - every inverted yield curve has not been followed by a recession.

It’s an indicator but not a guarantee, an important difference to remember. It usually takes twelve to fourteen months for a recession to kick in once the curve has inverted and it just inverted recently. If consumers and businesses think a recession is coming, they tend to pull back on their discretionary spending, which can bring on an economic slowdown.

Keep your eye on whether the yield curve stays inverted, because it is often seen as the “canary in the coal mine” of a coming recession. And be sure to watch the partner video to this one to get a better understanding of negative interest rates.

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Topics: Investing ,

Why are people buying bonds with negative interest rates and what does this have to do with you? Something big might be up with the global economy and it's time to pay attention!

A negative interest rate means that a bond actually “yields or pays” a negative number. While it’s hard to imagine that it’s possible for an investor to invest money and not only not get any interest, but to actually lose money - that’s exactly what happens with negative interest rates. This may sound strange and indeed it is. There’s currently about 15 trillion dollars’ worth of bonds in the world with negative interest rates, mostly in Europe and Japan. If you bought a 10 year German bond today, it yields a negative zero point 5 percent, meaning that in 10 years you would get back 99 and a half cents on the dollar and no interest. This has never happened before in financial history.

What do negative interest rates tell us? They say that the economies of Europe and Japan are depressed and probably already in a recession. It also says that the central banks seem to have lost their ability to stimulate their economies out of weakness by lowering interest rates or providing massive amounts of cash - something they’ve always been able to do in the past. The last time the world experienced anything like this was the Great Depression of the 1930s, which took World War Two to turn around.

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Topics: F.I.R.E, Investing ,

Passive income is one of the pillars of financial independence. You’ll need far less money in the bank if you can build continual money coming in through passive income. Passive income translates into freedom for you to do other things than be tied to a 9 to 5 job.

The top 4 types of passive income are: a) investing in cash flowing assets; b) creating cash flowing assets; c) using existing assets you own to generate cash through rentals, and d) expand how far your income goes by slashing your expenses. More information about each type is explored in the video.

Passive income means less dependence on a paycheck as your sole source of money. See what might change in your life by expanding how you create income and open the income you do have by cutting expenses.

As a personal finance expert, Jordan recognizes quality solutions, forming affiliate relationships to help improve people's financial lives.

 

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Topics: Work, F.I.R.E,

Investing in yourself for success is more powerful than ever, especially in the entrepreneurial world. Having a professional image has moved far beyond a good suit and haircut - in fact, skip the suit and maybe even the haircut and invest in your online presence instead.

Build and continually update your skills so you can solve problems and have satisfied, happy customers that want to continue working with you and refer new business to you.

If you want to improve your odds of launching and maintaining a successful service business from home, you need to invest in the tools to run your business, sharpen your skills and build your own personal support network so you can provide genuine value to your clients.

As a personal finance expert, Jordan recognizes quality solutions, forming affiliate relationships to help improve people's financial lives.

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Topics: Work, F.I.R.E,

Beware the work scam! Scams are as old as time but online scams make it much easier than ever to separate you from your money. How do you tell legitimate side hustle opportunities from scams?

There are many online fraudsters eager to tempt you with ‘easy ways’ to make lots of money from home with little or no skills. Beware if it sounds so easy!

How do you tell a valid opportunity from a scam? 1. Trust your gut. If something feels off, it could be. Proceed with caution. 2. Research the company. Ten seconds of googling them can uncover what people are saying about them, whether it be positive or negative. If negative and you are warned off dealing with them, that will translate into your money staying in your pocket and not that of the fraudulent company. 3. NEVER share your personal financial information before you’re sure that a company and opportunity are real. For example, Upwork, a site that allows you to find freelance jobs, needs your bank account information to deposit a paycheck. That’s legitimate and both the company and the process are easily validated online. 4. Beware of a job that sounds too good to be true. Did they offer you an amazing amount of money without researching you or testing your skillset? 5. Does it require you to act FAST before the opportunity is gone? A false sense of urgency is often part of scams.

If you enjoyed this video, please be sure to LIKE and SUBSCRIBE! For more tips, tricks, and resources to help improve your financial well-being, connect with Jordan on his website at https://moneyanswers.com and on Social: Twitter: @GoodmanJord or Facebook: jordan.goodman.7796

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Wondering where all your money is going? Want to get ahead? Seeking financial independence? The answer isn't always making more money! By slashing your expenses you can live on far less and have a real chance of actually achieving financial independence.

Deep cuts to expenses, one of the main points in the F.I.R.E. movement, means what you earn will go much farther. By focusing on reducing your biggest expenses in some of the ways suggested in the video, you can have a far less stressful life because you don’t need to earn as much to maintain an expensive lifestyle.

Listen to Jordan's interview with Tanja Hester on The Money Answers Show to hear much more on this topic.

As a personal finance expert, Jordan recognizes quality solutions, forming affiliate relationships to help improve people's financial lives.

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