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10 More Investments You Should Know

10 More Investments You Should Know

    On Tuesday, we discussed the first ten of the twenty investments everyone should have at least a passing familiarity with. We still have another ten to go, so let’s get started.

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    1. Mortgage-Backed Securities (MBS)

    While I wouldn’t recommend buying an MBS these days, it’s still an investment worth knowing. In order to be able to afford to offer mortgages, most small banks package their mortgages and sell them through Freddie Mac and Fannie Mae. As the housing industry works through the toxic mortgages it’s offered over the past couple of years, it’s best to avoid investing in an MBS or a collateralized mortgage obligation (CMO) — the cheaper version of an MBS.

    2. Municipal Bonds

    Municipal bonds, often called ‘munis,’ are bonds issued by states, counties, or municipalities for capital expenditures. When you purchase a municipal bond, you’re essentially offering a loan to the local government. At first glance, most municipal bonds seem to have very low returns; however, most are exempt from federal taxes and can be exempt from state and local taxes as well. When you factor in the improved tax situations, the return on municipal bonds is significantly better.

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    3. Mutual Funds

    Members of mutual funds lump their money together and have a mutual fund manager buy stocks. The mutual fund manager is responsible for researching stocks, making sure the fund is diversified and all the details that can make investing in stocks worrisome for first time investors. Most funds have a set goal, along with strategies for risk and return. Mutual funds are particularly popular because you can easily make monthly purchases.

    4. Options (Stocks)

    Options are not actually securities, unlike many investments. Instead, options are the privilege to buy or sell a particular security at a set price within a certain period of time. If, for instance, you were to buy an option to buy a stock, you would hope the share price will rise significantly; you then purchase the stock and immediately resell it — or you can resell the option. Stock options are a particularly risky investment and most brokers will require you to receive approval to trade options — the added step is an attempt to limit the number of traders with no experience or knowledge.

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    5. Preferred Stock

    Preferred stock represents your ownership in a company, just like common stock, but most preferred shares do not confer any voting rights, unlike common stock. For most preferred stock, dividends are also often different than common stocks: you would normally receive a fixed dividend indefinitely with preferred stock. Preferred stock is treated more like a combination of stocks and bond than straight stock. The main benefit of this approach is that, in the event of a company going bankrupt, its preferred stockholders will be repaid before common stockholders.

    6. Real Estate and Property

    For most people, purchasing a home is the largest single investment they will ever make in their lives. Of course, real estate investments can go far beyond houses: commercial properties, undeveloped land, condos and other opportunities are all included in this category. While real estate has developed something of a bad reputation lately, it can still be a very worthwhile investment. However, it is important to remember that real estate can be one of the more expensive investments to hold, between maintenance, property taxes and related expenses.

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    7. Real Estate Investment Trust (REIT)

    If you’re interested in investing in real estate, but feel like it’s too expensive, you can still invest in REITs. These investments are traded like stocks on most major stock exchanges — they are directly invested in properties or mortgages. Compared to traditional real estate investments, REITs are far more liquid, have better tax advantages and have high yields. REITs are usually less volatile than the rest of the stock market, although lately they’ve been riskier than usual.

    8. Treasury Securities

    Treasury securities actually include a number of different investments, including treasury bills (short-term investments), treasury notes (medium-term) and treasury bonds (long-term). All treasury securities are considered low risk; they are loans made to the national government which is assumed to be unlikely to default. Because of the risk factor, the return on treasury securities is fairly low.

    9. Unit Trust (UIT)

    UITs are fairly similar to mutual funds in that they hold a portfolio of investments. However, they differ dramatically in the portfolios they each hold: UITs may own common stock, but rely on income-producing securities like municipal bonds, government bonds and corporate bonds. UITs are not actively managed like other investment portfolios might be: because they hold income-producing securities, they allow these investments to mature and pay out. UITs are mostly low-risk investments, although those that hold stocks can be less certainty of a good return.

    10. Zero-Coupon Securities

    While most bonds pay a return (known as a ‘coupon’) beyond their face value, banks or brokers also offer zero-coupon securities. Essentially, zero-coupon securities are bonds that have had their coupons stripped off: the broker removes the coupons and trades the remaining bond as a zero-coupon security. The benefit of investing in these securities is that you will pay less than face value — significantly less if the bond won’t mature for quite a while. For instance, you might pay $800 today for a $1,000 security that will mature in five years, when you will receive the full face value. Zero-coupon securities have little risk, but they do have a few tax disadvantages.

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    Last Updated on November 26, 2019

    How to Motivate Yourself: 13 Simple Ways to Try Now

    How to Motivate Yourself: 13 Simple Ways to Try Now

    Who needs Tony Robbins when you can motivate yourself? Overcoming the emotional hurdle to get stuff done when you’d rather sit on the couch isn’t always easy. But unless calling in sick and waking up at noon have no consequences for you, it’s often a must.

    For those of you who never procrastinate, distract yourself or drag your feet when you should be doing something important, well done so far! But for the rest of you, it’s good to have a library of motivational boosters to move along.

    Despite your best efforts, passion, habits and a flow-producing environment can fail. In that case, it’s time to find whatever emotional pump-up you can use to get started.

    Whether you’re starting a business, trying to los weight or breaking a bad habit, you’ll learn how to motivate yourself with different techniques here:

    1. Go Back to “Why”

    Focusing on a dull task doesn’t make it any more attractive. Zooming out and asking yourself why you are bothering in the first place will make it more appealing.

    If you can’t figure out why, then there’s a good chance you shouldn’t bother with it in the first place.

    2. Go for Five

    Start working for five minutes. Often that little push will be enough to get you going.

    3. Move Around

    Get your body moving as you would if you were extremely motivated to do something. This ‘faking it’ approach to motivation may seem silly or crude but it works.

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    4. Find the Next Step

    If it seems impossible to work on a project for you, you can try to focus on the next immediate step.

    Fighting an amorphous blob of work will only cause procrastination. Chunk it up so that it becomes manageable. Learn how to stop procrastinating in this guide.

    5. Find Your Itch

    What is keeping you from working? Don’t let the itch continue without isolating it and removing the problem.

    Are you unmotivated because you feel overwhelmed, tired, afraid, bored, restless or angry? Maybe it is because you aren’t sure you have time or delegated tasks haven’t been finished yet?

    6. Deconstruct Your Fears

    I’m sure you don’t have a phobia about getting stuff done. But at the same time, hidden fears or anxieties can keep you from getting real work completed.

    Isolate the unknowns and make yourself confident, you can handle the worst case scenario.

    7. Get a Partner

    Find someone who will motivate you when you’re feeling lazy. I have a friend I go to the gym with. Besides spotting weight, having a friend can help motivate you to work hard when you’d normally quit.

    8. Kickstart Your Day

    Plan out tomorrow. Get up early and place all the important things early in the morning. Building momentum early in the day can usually carry you forward far later.

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    Having a morning routine is a good idea for you to stay motivated!

    9. Read Books

    Read not just self-help or motivational books but any book that has new ideas. New ideas get your mental gears turning and can build motivation. Here’re more reasons to read every day.

    Learning new ideas puts your brain in motion so it requires less time to speed up to your tasks.

    10. Get the Right Tools

    Your environment can have a profound effect on your enthusiasm. Computers that are too slow, inefficient applications or a vehicle that breaks down constantly can kill your motivation.

    Building motivation is almost as important as avoiding the traps that can stop it.

    11. Be Careful with the Small Problems

    The worst killer of motivation is facing a seemingly small problem that creates endless frustration.

    Reframe little problems that must be fixed as bigger ones or they will kill any drive you have.

    12. Develop a Mantra

    Find a few statements that focus your mind and motivate you. It doesn’t matter whether they are pulled from a tacky motivational poster or just a few words to tell you what to do.

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    If you aren’t sure where to start, a good personal mantra is “Do it now!” You can find more here too: 7 Empowering Affirmations That Will Help You Be Mentally Strong

    13. Build on Success

    Success creates success. When you’ve just won, it is easy to feel motivated about almost anything. Emotions tend not to be situation specific, so a small win, whether it is a compliment from a colleague or finishing two thirds of your tasks before noon can turn you into a juggernaut.

    There are many ways you can place small successes earlier on to spur motivation later. Structuring your to-do lists, placing straightforward tasks such as exercising early in the day or giving yourself an affirmation can do the trick.

    Bonus: Staying Motivated Forever

    The best way to motivate yourself is to organize your life so you don’t have to. If work is a constant battle for you, perhaps it is time to start thinking about a new job. The idea is that explicit motivational techniques should be a backup, not your regular routine.

    Here are some other things to consider making work flow more naturally:

    Passion

    Do things you have a passion for. We all have to do things we don’t want to. But if life has become a chronic source of dull chores, you’ve got a big problem that needs fixing.

    Not sure what your passion is to get you motivated? This will help you: How to Get Motivated and Be Happy Every Day When You Wake Up

    Habits

    You can’t put everything on autopilot. I’ve found putting a few core habits in place creates a structure for the day.

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    Waking up at the same time, working at the same times and having a similar productive routine makes it easier to do the next day.

    This guide will be useful for you if you’re looking to build good habits: Understand Your Habits to Control Them 100%

    Flow

    Flow is the state where your mind is completely focused on the task at hand. While there are many factors that go into producing this state, having the right challenge level is a big part.

    Find ways to tweak your tasks so they hover in that sweet spot between boredom and maddening frustration.

    Easily distracted and hard to focus? Here’s your solution.

    Final Thoughts

    With all these tips I’ve shared with you, now you know what to do when you’re feeling unmotivated.

    Find your passion and develop a positive mantra so when the next time negativity hits you again, you know how to stay positive and motivated!

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    Featured photo credit: Pexels via pexels.com

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