Difference between active and passive

Of all the definitions of assets and liabilities are only have to stay with the most important, and you have to remember forever.

An asset is something, an investment that puts money in your pocket. However slightly.

A liability is something that takes away the money from his pocket. An expense.

Do not confuse these two concepts as there are many people who think that the house where he lives is an asset and a good investment and nothing is further from reality. A commonly used house is a liability because it does not receive any income from it, and will only be active if one day we decided to sell it to cash, and keep the money.

 

While the home where you live "cost you" money as much as your expectations make you think that in ten years you will get high returns are sitting on a pile of bricks and not on an investment.

Could encompass how active an investment in stock , bonds , a house to rent a bank deposit ...

And conversely a liability would be for example the commonly used home, second homes, a car and all that to make ends meet instead of giving money taketh away.

Spain is deeply rooted in the idea of ​​buying a flat / house and think it's an investment, "a piggy bank" for the future in case of contingencies or just spend the feel you're going to have a possession to be worth tens of thousands euros and you feel you've "invested" or you're going to invest the money.

And you have to be very careful as always not buy is more profitable than renting . The other day I read that 80% of people who have a mortgage for 5-10 years ago is paying more than it is actually worth your floor. And that's not an investment. It is a liability how a house never better.

From the moment you decide to live financially in an efficient manner have an obligation to be creating assets and go slowly getting rid of liabilities that have made ​​previously, and we saw what is the best way to start eliminating debt .

A monthly savings combined with any investment, simple or complicated, and applied over time with compound interest is the best way to create quality assets that slowly but gradually will be putting money in your pocket.

And you've started to build assets? We invite you to tell us what is your strategy to get more and more in his pocket.

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.

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.