We had talked about how good the property investment could benefit our ROI. We will need some way to measure any particular real estate investment opportunity coming out at any point of time.
If your rental yield annually could cover all of the property expenses including the loan payment, it is a good investment. If it not only cover all the expenses, but also generate some passive side income for us, we see it as a attractive investment.
Bank is like our business partner because they are the big share holder in our property investment. To measure the yield of the real estate investment, the first thing we need to do is to calculate the annual installment that we need to pay the bank.
The common used formula for this which we always call it "Amortization" is the following:
R = P ( i / ( 1 - ( 1 + i ) ^ -n ))
R: the periodic payment
P: the loan
i: the interest rate
n: the period of the payment
Aug 14, 2008
Aug 8, 2008
北京奧運開鑼囉! 2008 Olympics!
今天是二零零八年八月八日, 一個很特別的 日子。北京奧運開鑼了!
Today is a very special day for China (8th, Aug 2008) the first time that the Olympics hosted in China!
Today is a very special day for China (8th, Aug 2008) the first time that the Olympics hosted in China!
Aug 7, 2008
"Rule #1, don't lose your money; Rule #2, see rule #1" - by Warren Buffett
What is the most important thing to remember in the investing world? My experience for the last few years tells me that "don't lose your investment capital" is the most important thing to remember whenever you do a investment decision. That is also noted from Warren Buffett.
You may want to argue that, to not losing the investment capital, you will just put it in the bank. The truth is, the high inflation around global has put your money in a greatest risk now. Put Singapore as example, the expected inflation in year 2008 is around 5%-7%. That is higher than all the banks' fix deposit returns.
From that, you may try to invest your money in some other investment tools instead of just putting in a bank. However, investment takes disciplines and experience. As long as you are not fully understanding any investment tool, do not put your money into it. Always remember that the most important rule for doing investment is not losing your investment capital.
You may want to argue that, to not losing the investment capital, you will just put it in the bank. The truth is, the high inflation around global has put your money in a greatest risk now. Put Singapore as example, the expected inflation in year 2008 is around 5%-7%. That is higher than all the banks' fix deposit returns.
From that, you may try to invest your money in some other investment tools instead of just putting in a bank. However, investment takes disciplines and experience. As long as you are not fully understanding any investment tool, do not put your money into it. Always remember that the most important rule for doing investment is not losing your investment capital.
Aug 6, 2008
"The future of security prices are never predictable" - by Benjamin Graham
I am in the process of reading a book from Benjamin Graham. From the current volatile market in US, it looks like there are many good opportunities out there. The Wall Street people are worry about the US economy trigger by sub prime mortgage crisis and high inflation.
I have been monitoring specially Bank of America for the last few years, the price has been fallen to around $30 dollars now. It even drop to around $18 a few weeks ago. If you buy it at around $20, it will give you a dividend yield of about 12% annually, which is very attractive compare to other investment tools, and you can potentially get a 100% capital gain a few years later.
The problem right now is that, you never know how US economy will go, will it recover? In this point of time, a value investor should always look at the foundation of investment. As Graham said, you never know where the market will go, and thus the price is not predictable in the short term.
Given the fundamental analysis of the bank, I can only say that some companies in US are put out on sales. Always remember "Buy when the market is down, Sell when the market is high". However, the fundamental analysis needs to be done in order to measure if the price is really 'low' to go in.
Given the current market condition, you can go in the market with a big margin of safety which reduce the risk of making wrong decision. So, go and do your homework and you should get good ROI a few years down the road from the US market.
I have been monitoring specially Bank of America for the last few years, the price has been fallen to around $30 dollars now. It even drop to around $18 a few weeks ago. If you buy it at around $20, it will give you a dividend yield of about 12% annually, which is very attractive compare to other investment tools, and you can potentially get a 100% capital gain a few years later.
The problem right now is that, you never know how US economy will go, will it recover? In this point of time, a value investor should always look at the foundation of investment. As Graham said, you never know where the market will go, and thus the price is not predictable in the short term.
Given the fundamental analysis of the bank, I can only say that some companies in US are put out on sales. Always remember "Buy when the market is down, Sell when the market is high". However, the fundamental analysis needs to be done in order to measure if the price is really 'low' to go in.
Given the current market condition, you can go in the market with a big margin of safety which reduce the risk of making wrong decision. So, go and do your homework and you should get good ROI a few years down the road from the US market.
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