Redemption Mortgage or leave the money on deposit?

This question always comes up in every discussion forums and in all conversations. In this blog will have generated enough comments like: 'I lack to pay 130,000 euros of mortgage and I have 40,000 in a deposit. What do I do with the savings? Amortized mortgage or leave it in the tank I might be giving interests?

The response itself is quite simple but you have to consider several factors. Not everything is to achieve maximum profitability.

If the 40,000 we have them in a tank get 4.5% APR 1422 after tax per year in interest.

If amortize mortgage until 9040 the maximum possible for us desgravamos holder a maximum of 15%, ie 1356 per year. But if the ownership of the mortgage there are two people you can deduct twice, 18.080 euros. With 15% return we will get 2712 euros hacienda.

 

 

The tariff includes fee, interest and principal. Therefore, if we pay a mortgage of 500 euros a month is 6000 a year and we should (in case of sole holder of the mortgage) repay to the maximum of 9040, ie add 3040 euros extra. Looking at it another way, we will have a deposit of 15% per year 9040.

If our mortgage fee is 850 euros per month 10,200 annual pay, therefore you should not write off anything because you spend the maximum in 1160, and in this case if you should leave the deposit at 4.5% APR and you probably have higher interest than you are paying for the mortgage.

If mortgage paid 650 euros a month (€ 7,800 per year) but we are two holders (my partner and I) we can deduct a maximum of 18,080 euros per year. That is, at the end of the fiscal year, in December, we'll add 10,280 euros to get the most and so will be like you have a deposit of 18,080 euros to 15% APR.

So much for the options to be financially profitable. But keep in mind that it is often better to pay a little more and have liquidity savings will run out sooner repay. I guess there are all kinds mentalities and before doing anything better inquire as to what may be the best option.

In case you want to ever repay mortgage amortized time and capital, since we got rid of shortening the time and lowering interest fee we will reduce some of the money to pay monthly but will also be paying interest to the bank.

Anyway people to purchase a residence from January 1, 2013 will no longer be tax deductible anything, so that 15% is canceled. In that scenario have the money saved to a good interest monetized over paid on the mortgage will be most profitable.

Equities vs. fixed income

We want to invest but do not know where to start. We heard that a neighbor buys shares, another has-bills ... but it sounds like Chinese. The most common among the ordinary people, not familiar with the investment world is to know the stock exchange. Equities bag not associated with on many occasions.

If we go a step further, on the other side of the sidewalk, no bonds. Four out of five people questioned in the street has never heard of the bonds, but the bonds of state and treasury bills.

There is a lack of knowledge of concepts and the association has to be clear that equity = stock exchange = buy / sell shares on an exchange.

And fixed income = letters / bonds / debentures, although in this case it is not so easy to explain as above.

I am often asked which is better, if the fixed or variable?, is an open question as it is not a duel to be the best way to invest, but every one of the options requires a plan or strategy determined and made ​​to measure.

By email I have received a comment on why equities RECOMMEND even. I have to say that I've never done, just position myself where best suits me and I adapt to the rules of the game on the fly. Who else who ever invested less in stock, if not he will have done so indirectly through your bank in a structured deposit or a mutual fund. Of all the people who have bought shares being aware of what they did, probably 8 out of 10 will have lost money, have won something and that ten will be made ​​in August. It's pure statistics. To earn a few most be missed.

The bag is fascinating. But never an individual investor may invest to a "higher level" because just as fascinating is equally manipulable. If I want to buy shares of Google I can do with a few mouse clicks. I can think that the company is "on fire" and that will go far. But managers may hedge funds, pension funds and large investment funds do not think the same and withdraw their positions. In that case the action begin letting down caught out if I have not heard before, either by choice or by the use of a stop loss (stop loss).

The strategy followed by these three groups of investors is quite simple in concept. They come in solid companies with good growth and the mere fact of having a reputation draws lots of people, and I do not mean people like you and me (also), but managers and smaller funds and large investors capital private. When the action is "hot" is said, the great go through the back door, by stealth, reaping the benefits and leaving others with an action that is devalued by simply taking away a part of its value . This happens every day, and is to blame for that 8 out of 10 of us lose money in stock market.

If you look at a recent case we can see if Apple / Google. The first was the world's most powerful company, shares more than 700 usd and bank account filled to the brim, to say nothing of the benefits you get. Until one day a great manager decides he has had enough and leaves, of course others are wary and follow him. There is no reason. Humans are like dogs when you shoot with a stick.

Source | Yahoo! Finance

So where has the money gone? Much of it directly to Google. In six months is up 40% to more than 900 usd per share, your business is going well or very well, but Apple is stronger and gets more benefits. And the box (cash money) is several times larger than that of the search engine block. But the funds are positioned in the search, making skyrocket while Apple already looks like 700 usd far and passes through a discrete (to be what it is) 400 usd.

Source | Yahoo! Finance

Until some lit, some other privileged information worldwide leading company, decides to abandon positions. The action will begin to lose because it is what makes the law of supply and demand. If a site is removed as there are less.

With fixed income this can not happen in this measure. Market does not work like this. As much as the bond is not fixed for the purpose of this type of investment is not the same. In this market, commonly, it comes knowing what is going to win, and although we can speculate without any problem, large funds do not use this method. In this market, which we are most knowing the outcome. Knowing that the current uncertainty is no reason for you to lose money, and if all goes well I will recover the initial capital plus interest at maturity.

Clearly positioning myself for fixed income, but that does not mean they do not use the equity (if I use it) but I move into what best suits my investment method.

I see it like a business. Imagine you are the manager of a company and you have two possible scenarios for the end of year results. Think of your choice dependent jobs. On one side of the table is the aggressive option (the reference to equities), this option is as follows: if the thing goes well the company will earn a 25% in this fiscal year. If something goes wrong the company will lose 15% and you have to make a cut of 30% of the workforce.

Across the table is the most relaxed (relating to bonds), in that you will not lose in that year but the benefits will not 8%.

Which do you prefer?

Sure you reflect on this example you have decided that the bond is better. No, not better. It's different. It is used for different things. It depends on your plan and your ambition. Not the same winning by 8% to 25%, but it is the same to win by 8% to lose 15%.

Quite some time I am in favor of adding 8 at 8, and not from adding 25 +10 -15 -8. I hope you understand. I am more than convinced that long-term earning just over fixed income than equities.

Just to give an example, a well-known blog (I will not say the name), which have a public investment portfolio. Since 2008, have achieved 16% revalue. A 16% cumulative, then dividing by the years from the start date is plus or minus 3%.

  In fixed income, and without being a "master business" minimum multiply that number by two.

This is not to say it's easy and those who invest in equities fools. Not at all. Only that each tool is used to a certain way of working.

Bank deposit. You know how it works?

When hiring a bank deposit must look at several things and although it seems to be the easiest investment there, it is not the end of the post and I will tell you that if it is, we have to fix on the characteristics of product we hired, mostly to give us for a ride and at the end we get on a good scare and anger.

Before everything. A bank deposit, fixed term or fixed-term deposit is the same. You will leave some money to the bank to do its thing and he in return gives you a interest as compensation. It has a fixed duration and fixed remuneration contract is fixed, ie before entering already know what you're going to win. They are also guaranteed by the state (FGD) 100,000 per entity and person in case of bank failure.

This strong interest is mainly governed by the Euribor (interest rate to lend money to, including, entities) but with the whole issue of the crisis the illiquidity of banks have had to forget the taxes low interest rates by the European Central Bank (ECB) and make aggressive campaigns to individual customers a higher interest rate.

While official interest rates are at 1% banks are paying them to liabilities with 4.6% APR and without any connection from the client.

We will explain in more understandable words what the previous sentence. THE European Central Bank fixed in 1% the interest rate at which it lends money to banks, that is, that when you decide to open a window of liquidity to banks in need come to him to refinance because only charged 1% APR, which is very little.

But as always there are windows of liquidity banks must ingéniaselas to get more money and this is where the competition starts to get money from ordinary citizens.

Clearly, there are many people who prefer not to earn a little extra to have to change banks but there are many people and with real money if you are willing to move to earn more.

Therefore, the most interest is willing to offer, in theory, is the one with more numbers to get more funding. (Although other factors influence how the country of origin of the entity, rating rating and even if you drop close to home or if you are good at managing the Internet).

Once we are clear because there are going to explain bank deposits which typically offer entities and that we'll be looking.

There are several types of deposits but of course we say that we are interested only pure and hard deposits without additional links, no credit, no insurance, or payroll or anything.

Being a low-risk investment, and suitable for every investor profiles, we can see that the investment triangle occupy a very relaxed site to be a liquid investment, low risk and therefore unprofitable.

Investing in this way we will not get rich but how low we will not lose money, and I say now lose because if you go to a lot of companies and they offer a lower interest rate to 3% and enter missing. So clear.

If you want a band inflation eats it otherwise you better grab your money and spend it how you will at least give pleasure.

We also have to look at whether the associated account where interest is exempt receive commissions or we will charge between 6 and 20 euros per year. Thing that still remains for the low profitability that we provide.

Now we are chastened and they do but you have to be careful that we do not give any kind of product then selling costs or recover the money, you can leereste article preferred to go deeper on the subject.

Remember that the bank is to serve. 's not your friend , and if not keep his promises or not treating you how you deserve there are dozens of them scattered throughout the geography.

As a final conclusion and summary say that everyone who has "some" money should try to get some performance to keep purchasing power and try to at least get something "extra". Do not be charging for anything and remember that it is you who is indebted to the bank money and not leaving you giving interests.

Finally, always read the fine print to take no surprises.

Indeed, investment is simpler than having no money at home. In contrast is the least profitable of all but ultimately is an investment at 0% APR.

I hope this clarification have no hesitation in going to the bank to make "some investment" and if you do not hesitate to contact me.

APPLE Magic: Succulent PROFITS poor TAX

The U.S. Senate has set to work to investigate the major tax fraud occurring in their country. The genius of Apple to evade taxes has no limits, the Senate knows and wants to end it. They have made a report and the data are chilling.
Fraud is the concentration of profits in some subsidiaries that are not based tax.
The report highlights the possible agreement by Apple to Ireland for a tax rebate of 10%, from 12% to 2%.
A clear example is the holding of foreign affiliates (AOI), which in the past four years has made ​​a profit of 30,000 million dollars even stated anywhere.
On the other hand, we have (ASI), which is responsible for billing the sales in Spain, using companies from Ireland to escape the Spanish hacienda, specifically 74,000 million in the past four years.
In 2011, for example, of the 22,000 million profit paid 10 million dollars, less than 0.05%
Apple has more than 100,000 million U.S. dollars outside. 61% of its sales are overseas records.
Large experts believe that the problem is that "the tax system is not up to the digital age"
The U.S. Senate has launched accusations against Ireland to facilitate such companies to enter its country attracting them with their "tax incentives"
with these statements, Gilmore, Irish Deputy Prime Minister, leaving the way of a U.S. Senate report which states that the technology giant created two subsidiaries in Ireland that had no employees or physical presence, and whose sole purpose was to channel thousands of million of its global profits to avoid paying U.S. taxes, saying the tax problem comes from other countries, not yours. How do you think that affects the economy? Could eradicate extreme poverty by taxing big companies? Yes, but 2 times.