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10 Investments You Should Know

10 Investments You Should Know

    It’s impossible to miss the fact that stocks, real estate and bonds all make for decent investments (at least most of the time). But there are so many different investment options, most of which get minimal marketing. If you want to take a look at a wider variety of options, you should be able to at least tell an American Depository Receipt apart from a Convertible Security. There are about twenty investments that any investor should at least be familiar with and the ten listed below are the first half of that list.

    1. American Depository Receipt (ADR)

    ADRs are traded on U.S. stock markets just like regular stocks, but they actually represent shares in foreign corporations. An ADR is issued by a U.S.-based bank or brokerage, which buys a large number of shares from a company based outside the U.S. Those shares are bundled into groups and then resold; they are usually labeled with a ratio representing how many shares a particular ADR represents. The sponsoring bank collects detailed financial information about any company whose shares it resells. ADRs are a relatively simple way to invest in foreign companies and avoid the administrative and duty costs of international transactions. Other countries besides the U.S. have depository receipt opportunities available.

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    2. Annuity

    Annuities provide set payments at regular intervals to their owners. You can typically purchase an annuity through an insurance company, and you’ll have several options. An annuity can either be immediate or deferred: with a deferred annuity, you will not begin receiving payments for a certain period of time. Deferred annuities are often contracted for life — they’re set up so that as long as you live, the insurance company will send you a check at a regular interval. Annuities are also either fixed (the payments are set) or variable (there is a guaranteed minimum payment, as well as payments based on the performance of an annuity investment portfolio.

    3. Closed-End Investment Fund

    A closed-end fund issues shares that are traded just like stocks but are actually closer to mutual funds in the way the are managed. Closed-end funds hold portfolios of securities — usually securities that meet very specific criteria (i.e. come from particular industries). These fund are actively managed and may hold a few investments in stocks or bonds in order to diversify, but because of their focus on particular sectors, closed-end fund issues are not considered diverse. Some closed-end funds offer dividends.

    4. Collectibles

    Collectibles can be pretty much any physical asset with a value that increases over time. While most people consider fine art, stamps and similar purchases to be collectibles, there is no strict definition that includes or excludes a particular asset. The greatest drawback to collectibles is the fact that collectibles offer no income, unlike many other investments. However, a collectible’s appreciating value often outpaces inflation.

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    5. Common Stock

    Common stock is what most of us think of when we hear the word stock: a share of ownership in a particular company. It entitles you to a portion of the company’s profits as well as voting rights. The majority of stocks traded today are common stocks. While the benefits associated with owning stock can be great, it is a relatively risky investment. If a company that you own stock in goes bankrupt, as a common shareholder, you won’t receive money until the creditors, bondholders and preferred shareholders have all been paid off.

    6. Convertible Security

    Convertible securities are either preferred stock convertibles or convertible bonds. While you would purchase a convertible bond just as you would purchase a normal bond, you would have the opportunity to convert it into common stock in the company that issued it. Depending on the terms of the convertible bond, also known as the indenture, the bond could convert into a significant number of shares. Convertible bonds do provide a small amount of income, but the real value is that the bond can be converted into common stock.

    7. Corporate Bond

    Corporations issue bonds in order to raise money: when you buy a corporate bond, you’re essentially loaning a corporation money for the length of the bond. Not only will the corporation repay you the full face value of the bond (and your loan) but it will also pay you a coupon — a predetermined interest rate paid out every six months. Corporate bonds are more lucrative than government bonds, but they are also riskier.

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    8. Futures Contract

    A futures contract is a commitment to either deliver or receive a specific quantity of a commodity during a specific month at a specific price. Most futures contract are closed out before the expected delivery date and while they can be very risky, futures contracts can also provide for a simple way to manage price risks. They can provide impressive profits, due to their higher risk factors.

    9. Life Insurance

    While life insurance may not seem like an investment on the surface, it provides a return on your monthly payments. No matter how long you may have been paying for a life insurance polity, its value is set. It’s a relatively low-risk investment because insurance is heavily regulated by the government.

    10. The Money Market

    Through the money market, you can buy fixed-income securities, primarily short-term securities that last less than a year. Unless you are able to deal in the very high denominations that most money market securities are sold in, you will likely have to purchase these securities through a money market mutual fund or bank account. Returns on money market investments are highly dependent on the current interest rate and are considered low risk.

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    Check back on Thursday for the other ten investments that you should know.

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    Last Updated on May 12, 2020

    8 Steps to Continuous Self Motivation Even During the Difficult Times

    8 Steps to Continuous Self Motivation Even During the Difficult Times

    Many of us find ourselves in motivational slumps that we have to work to get out of. Sometimes it’s like a continuous cycle where we are motivated for a period of time, fall out and then have to build things back up again.

    There is nothing more powerful for self-motivation than the right attitude. You can’t choose or control your circumstance, but you can choose your attitude towards your circumstances.

    How I see this working is while you’re developing these mental steps, and utilizing them regularly, self-motivation will come naturally when you need it.

    The key, for me, is hitting the final step to Share With Others. It can be somewhat addictive and self-motivating when you help others who are having trouble.

    A good way to have self motivation continuously is to implement something like these 8 steps from Ian McKenzie.[1] I enjoyed Ian’s article but thought it could use some definition when it comes to trying to build a continuous drive of motivation. Here is a new list on how to self motivate:

    1. Start Simple

    Keep motivators around your work area – things that give you that initial spark to get going.

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    These motivators will be the Triggers that remind you to get going.

    2. Keep Good Company

    Make more regular encounters with positive and motivated people. This could be as simple as IM chats with peers or a quick discussion with a friend who likes sharing ideas.

    Positive and motivated people are very different from the negative ones. They will help you grow and see opportunities during tough times.

    Here’re more reasons why you should avoid negative people: 10 Reasons Why You Should Avoid Negative People

    3. Keep Learning

    Read and try to take in everything you can. The more you learn, the more confident you become in starting projects.

    You can train yourself to crave lifelong learning with these tips: How to Develop a Lifelong Learning Habit

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    4. See the Good in Bad

    When encountering obstacles or challenging goals, you want to be in the habit of finding what works to get over them.

    Here are 10 tips to make positive thinking easy.

    5. Stop Thinking

    Just do. If you find motivation for a particular project lacking, try getting started on something else. Something trivial even, then you’ll develop the momentum to begin the more important stuff.

    When you’re thinking and worrying about it too much, you’re just wasting time. These tried worry busting techniques can help you.

    6. Know Yourself

    Keep notes on when your motivation sucks and when you feel like a superstar. There will be a pattern that, once you are aware of, you can work around and develop.

    Read for yourself how the magic of marking down your mood works.

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    7. Track Your Progress

    Keep a tally or a progress bar for ongoing projects. When you see something growing, you will always want to nurture it.

    Take a look at these 4 simple ways to track your progress so you have motivation to achieve your goals.

    8. Help Others

    Share your ideas and help friends get motivated. Seeing others do well will motivate you to do the same. Write about your success and get feedback from readers.

    Helping others actually helps yourself, here’s why.

    What I would hope happens here is you will gradually develop certain skills that become motivational habits.

    Once you get to the stage where you are regularly helping others keep motivated – be it with a blog or talking with peers – you’ll find the cycle continuing where each facet of staying motivated is refined and developed.

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    Too Many Steps?

    If you could only take one step? Just do it!

    Once you get started on something, you’ll almost always just get into it and keep going. There will be times when you have to do things you really don’t want to: that’s where the other steps and tips from other writers come in handy.

    However, the most important thing, that I think is worth repeating, is to just get started.

    Get that momentum going and then when you need to, take Ian’s Step 7 and Take A Break. No one wants to work all the time!

    More Tips for Boosting Motivation

    Featured photo credit: Japheth Mast via unsplash.com

    Reference

    [1] Ian McKenzie: 8 mental steps to self-motivation

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