Long Term Real Estate Returns

Article By Mika Hamilton

“It's tangible, it's solid, it's beautiful. It's artistic, from my standpoint, and I just love real estate.”-Donald Trump Real estate returns are a great investment option for anyone who is looking for long term growth of their capital. Today, in the United States, real estate investing is booming with a great rate of return and extremely low risk. Land always appreciates in value and that is why many investors are pulling their money out of the stock market and placing into real estate, which almost guarantees a nice profit on a regular basis.

Land over the last year has increased by over 30% and about 130% since the early 1990s. Many people who are looking for investment options which will offer long term growth believe that mutual funds, investment trusts, and traditional stocks are their only options.

Real estate is probably the best option of all. Not only is it profitable but it a great deal of fun and very exciting. Unlike other investments real estate investing can be hands on, and with each new investments there are new things to see, do, and consider.

Real estate is the perfect investment for a conservative or new investor because it is very low risk. Real estate investing used to be an investment that only the rich could afford. Today, small or big investors have the ability to take advantage of this growth and profitability market.
Land has a great deal of potential because it adheres to the supply and demand theory of capital growth. As the amount of land decreases as supplies drop, the price of land increase as the demand for land grows stronger. People and companies will always need land to build on, and land is also renewable.

This means that land never wears out and has to repurchased. As the population in America increases, and people continue to immigrate here the need for land for residential housing will continual to rise. In addition, people are divorcing or choosing to stay single at a staggering rate.

This means that instead of one house, for a couple, there will need to be two houses. There is a desperate need for affordable housing for middle class families. Many urban areas are being revitalized to make room for young businesses people and lofts.

If you are looking for a solid investment which is easy to understand, you may want to consider real estate investing. The rules are simple, buy low let the land appreciate, and then sell high. There are no complicated business strategies, no reading of balance sheets, or complicate risk benefit formulas. Real estate investing is low risk, high profit, and anyone buy a piece of property at their price level.

Investing: Equity Indexed Annuities

Author:Robert Valentine

Maybe you've recently maxed-out your 401(k) and your IRA, and you're still looking for ways to save for retirement and defer taxes. If so, a relatively new tool on the market may help you meet your financial goals. It's called an Equity Indexed Annuity (EIA) and it's gaining in popularity.

Equity indexed annuities take advantage of the security of annuities and potential market gains. They've gained media attention as an insurance product that can profit from gains in market indexes. According to USA Today, currently 41 companies offer a total of 131 equity indexed annuities. The combination of the security of an annuity and the potential growth of the stock market has led to an increase in the amount of annuities purchased and also the amount of scrutiny given EIAs by the media and regulatory groups

Like a regular fixed annuity, you put money into an annuity in return for interest and a steady stream of income after you've retired. Income guarantees are based on the claims-paying ability of the insurance company. The difference is that with an equity-indexed annuity you have the potential to earn more future savings depending on the performance of the index to which it's tied. Many EIAs are based on the Standard & Poor's 500 index.

One possible downside is that the insurance company with whom you contracted for the annuity can set limits on the amount of market gain you actually receive. While you still have an opportunity for adequate growth, it may not always be at the same level as the index.

Insurance companies can limit your potential gains in several ways. For example, they can put a cap on your growth. If they assign a 10% cap, and the market increases 20%, you get only 10% of the gain. They can also give you only a percentage share of the index performance. For example, if they set the rate at 70% of index performance, and a particular index rose 10%, you would earn 7%. Finally, they can implement margins or spreads. If your margin was set at 4% and the market rose 10%, your annuity would rise only 6%.

How and when interest is credited to your EIA is an essential component as well. Some EIAs calculate interest by comparing your account value at the beginning of the year to its value at yearend. Assuming a gain, the difference is added to your account using the guidelines above. Others take the value of your EIA then add the value gained after the entire term of the EIA which could be many years.

One of the biggest advantages of EIAs lies in taxes. Future income and earnings in an annuity generally offer tax-deferred growth. This is especially helpful if you expect to be in a lower tax-bracket during retirement.

Keep in mind that EIAs are primarily a retirement savings vehicle and usually have a penalty for early withdrawal. There is an additional 10% tax penalty if you withdraw before age 59 1/2. However, many annuities have a provision that allows you to withdraw 10% of your funds without paying a penalty. Withdrawals will reduce the amount paid to beneficiaries at the time of death.

As with most investments, there is always risk, and you should consult carefully with a financial professional before you choose to invest.. As an alternative to traditional retirement savings, EIA's may be a viable option to help you plan for retirement.