REITs

A REIT is a Real Estate Investment Trust. REITs are an investment class similar to mutual funds that invest primarily in real estate. There are two kinds of REITs Mortgage and Equity. A Mortgage REIT invests in mortgages and makes its money on the interest paid by the mortgage holders. An Equity REIT directly owns property and earns money primarily by leasing property┬áto tenants. Some folks will split hairs and…

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Bonds

Continuing the dive into all things personal finance it is time to talk about bonds. Bonds are issued by organizations, generally companies or governments to raise capitol. One way to think about it is crowd sourced funding at an institutional level. When buying a bond you are buying a debt instrument issued by an organization. Most bonds have a face value of ten thousand dollars and pay some amount of…

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Stocks

Stock certificates are more than just pieces of paper that people trade back and forth speculating on their value and hoping to strike it rich. In fact it has been some time since there was any actual paper stock certificate printed. Anymore owning a share amounts to having your name in a database registering you as the owner. Owning a share of a company’s stock means that you are the…

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Two Things First

Fear and greed are the two emotions that govern investing. When the market is going up greed takes the reins and the market is valued at levels far exceeding its intrinsic value. Then some doom and gloom comes along and fear takes over driving down valuations. Through all of this boom and bust the important things to remember are: Crashes happen The market recovers Why do crashes happen in the…

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