Time to own your primary residence.

With government being more and more aggressive in helping the economy from entering recession, fed rate has take a big cut again. I just check the interest rate for 30 yr fixed mortgage, the graph shows we're back to the 2005 level in terms of interest rate. This is lowest in the past 2 years. This is certainly a good news for home buyer NOW. If you have been waiting and thinking to own your primary residence, give it a serious thought NOW. With more inventory on the market, and interest rate being lower, it's definitely a great buyer market to own your primary residence.

Listen to the TREND, don't listen to your FRIEND

Do you remember when you first become interested in investing, who do you go to talk to to get advice? I bet most of us talk to the people around us, our friends. Friends will tell us a lot of opinion on the market. These are some common words we hear from our friend's mouth


"This is a great stock, look at it, 10% jump in price in few hours"


"This is a great time to buy, it just drop 20% over last few days"


"It can't go any lower"


"It can't continue to go up and up"


You know what I mean. Friend give a lot of judgement and it's dangerous if we listen to them. Especially when you first start out and you don't know any better. I remember, some of the terrible stock investment I ever have is because I listen to a friend who sounds a lot smarter than me. I follow my friend's "advice" and my money get burned out quickly. Instead, if we''re determined to become a serious investor and make a fortune, we should get our education in the right way. We have to study the market, it it moving up, down or side way, how it does in the past, what kind of pattern can you recognize, beside the price, what other data you should look at to increase your confidence level, etc? Listen to the trend you identity and follow it to capture your profit. If you make a wrong move, at least you learn something along the process and next time you know the mistake and you can learn to avoid it.

Advantage :partner with others to build wealth

After a day of hardworking 9 to 5, I know you must be getting tired to do anything else other than go home, relax and sleep. But as you probably should know by now, that 's not the way to build wealth. Sometimes, we're just tired, lazy, and lack of self-motivation. In fact, it's quite hard to do it alone. That's reason I suggest partnering with others. Find people who has similar desire as you to get ahead financially. Form a meeting with them on a regular basis, it can be every week or every other week. During the meeting, discuss what some thought you have about business, investing for long time but haven't done much activity. Your partner should share his or her thoughts with you. After every meeting, list out Action Items that need to be done by the next meeting. Then, consider the possibility partnering with them to do things you have thought about doing. There are many advantages of forming partner than working it out alone:
1) Action items are like your homework. You should get it done or your partner will be disappointed you don't do your assignment. In other words, you're accountable. You will be more motivated than if no one hold you accountable.
2) Two people will have more thought, ideas, creativity than one
3) If one of you is busy in some time because of job, the other partner should help so things are moving forward
4) Your idea, thinking, are checked and validated by your partners so your chance of getting it right should be higher than if you do it alone.
I 'm starting to partnering with few of my acquaintance this year to work on some investment together. It's exciting to meet and work with people who has similar desire like I do to build wealth. If you haven't done so, I suggest you look for people in your network and start meeting with them regularly to get things going and rolling. Good luck in year 2008.

Mr warren buffett's wisdom on investing

I've been reading a lot of book about how the greatest investor all time think and his philosophy on investing. It's really a great learning experience and I enjoy it so much. He has great vision and patient in stock game. One of the greatest lesson I learn from him and I think this will change my way of investing forever is followed " When everyone fears, you should be greedy. When everyone greedy, you should fear" This is powerful and straight to the point. Basically, Mr buffet always buy stock and invest when no one else does. People will laugh at him of buying stock which is out of favorite by most people. In other words, he wait for a crash of a paticular stock and he buys with both hands when price is selling at discount. He believes the stock's price is priced below its intrstic value and it's just a matter of time when others realize the value of the stock and start buying, and hence, price rise again. He is very patient, sometimes, he will hold on a stock for as long as five years to wait for the price become over value. Then he sells his holding to everyone who buy near or at the peak. He is a truly buy-and-hold master. I will combine his thinking into my stock selection system. The couple stock I've been watching are stock related to financial, real estate and home builder.

New year: time to think and plan BIG

2008 is few days from us. At the beginning of the year, I like to think and plan on the goals I want to accomplish in the new year. Chances are that you're just like me, surrounded by people who has small dream, small goal, and little to no desire to get ahead their financial life. People who are "used to" living day by day , year by year, with no exciting dream to talk about. It's good idea to be alone and think clearly what are some BIG things you want to accomplish in the new year. Or else, next year will be same as this year. Think and plan on it. Write it down and be specific on your goals. The more specific it is, the bigger chance it will get done. These are some of the major goal I set to reach in year 2008:
*Buy Apartment building with over 40 units with over 5 thousands dollar cash flow.
*Develop a winning stock trading system allow me over 50% of profit with loss no more than 10%
*Find equity partner to invest with me for my properties.
What about yours?

When Cap Rate > Interest Rate...

Cap Rate is defined as : Net operating income / property price. Net operating income measures how much rent is left after all the related expense, such as insurance, taxes, maintainance and operating cost. For example, if the property values is $100,000, annual gross rental income is $10,000, total operating expense is 3000. Then your cap rate will be 7%. Cap rate is very useful because you can tell if the property going to cashflow postive or not immediately. Say, you're doing 100% financing with 7% interest rate. Then you're breaking even in the above example. If the interest rate is 6%, then you will have net 1% cashflow as your profit every year. This mean you can net 100,000 X 1% = 1000 dollar every year.

Moving Average

Using moving average is an helpful way to determine the trend of the market. The popular technique is to using a fast moving average , say 10 days, and a slow moving average, say 30 days, and plot these curves on top of the price chart. Whenever the fast moving average cross the slow moving average, it indicates a trend is developing. If 10 days MA cross 30 days MA, this means prices is on the rise. I found that using 2 moving average is helpful to determine the trend of the market. But there could be a lot of WHIPSAW, (MA cross above and below frequently), it could be quite confusing. Therefore, I will use one more slower moving average to helps eliminate whipsaw. A 50 days MA is useful in combination 10 and 30 days. Thus, I'll wait MA 10 cross MA 30 AND MA50 as a true confirmation of the trend. It still not perfect, but at least it can eliminate some whipsaw compare using only just two moving average.

HOPE now!? Worry later....

On Friday, President Bush push out a government assisted program to freeze mortgage rate for the sub prime borrowers such that their initial teaser rate maintain for up to 5 years without worrying resetting to a higher interest rate. The purpose is to help these sub prime borrowers continue able to afford the mortgage payment. This should help reduce the number foreclosed proprieties due to miss-payment and bank take over ownerships. Overall, it should help stabilize the tanking real estate market all across the U.S. However, these are some of the concerns I have:
1)Governement interference is not supposed to happen in a total capitialist market. Price should be determined by supply and demand. Thus, this program destory the basic element of a free market
2)It encourage people with poor credit / income get into the market in future because they expect governement will bail them out again if they face problem with their payment
3)Hope now, worry later? It's true that sub prime borrowers can temporaily get a break without worry their payment increase now. How about in 3 or 5 years, when this program finish their freezing period, these very same people will have to face the mortgage payment problem in that time? Of course, we all hope prices of real estate will rise in next few years, so these people could refinance it again in few years. What if the market is still weak? What happen to them? Is governemnt going to bail them out one more time ?
It's still too early to see the effect of this HOPE program, we'll have to continue to keep track of real estate market in next few months to years to conclude its effectivness . What's your view?

Foreclosure.com

As you should probably know, the number of foreclosure in many area of the country has experienced a significant increase in the past 6 months. There are more people behind or can't afford the payment and walk away from the mortgage obligation. House prices continue to fall as a result. This is quite an exciting time for buyer. I've been looking for foreclosure listing last several months. I rely the resources from Internet. While there are many website program out there charge you a monthly fees for seeing the listing, I found a site that is pretty informative in providing the foreclosure listing info without a charge. Foreclosure.com. It covers all the 50 states in U.S. While the address is not complete , (it only show the street name, city, and state), it is useful enough as a first step. After I review the listing, I 'll call my agent in the area I'm interested invested in. I give them the street name and ask him/her to do more research for me. Check it out and let me know how you like the site?