Bonds basics – I’m bond, James “Bond”
I am now in the second post in the series of savings, mutual funds, bonds and CDs and the like, conservative investment instruments. Now I am going to discuss bonds. Here are the basics to bonds:
A bond is very basically a loan and you are the lender. Who's the borrower? Usually, it's either the US government, a state, or a big company like General Motors, if you are lending money to the US government. In Singapore, it is a little known fact that the Singapore government issues bonds too. Many government and business entities need a lot of money to operate - to fund the federal deficit or to build roads and finance factories, for example - so they borrow capital by issuing bonds. Bonds are actually very big business, especially in the United States.
When a bond is issued, the price you pay is known as its "face value." Once you buy the bond, the bond issuer promises to pay you back on a particular day - it's called the "maturity date" - at a predetermined rate of interest - the "coupon." Say, for instance, you buy a bond with a $1,000 face value, a 5% coupon and a 10-year maturity. You would collect interest payments on the bond adding up to $50 in each of those 10 years. When the decade was up, you'd come back to get back your $1,000 and walk away.
A key difference between stocks and bonds is that stocks make no promises about dividends or returns. For instance, General Electric's dividend may be as regular as a heartbeat, but the company is under no obligation to pay it. And while GE stock spends most of its time moving upward, it has been known to spend months or sometimes even years going the other way.
On the other hand, when GE issues a bond, however, the company guarantees to pay back your principal (the face value of the bond) plus interest on the bond. If you buy the bond and hold it to maturity, you know exactly how much you're going to get back, basically. That's why bonds are also known as "fixed-income" investments, as they assure you a steady payout or yearly income. And although they can carry plenty of risk sometimes, as all investments do, this regular income is what makes bonds inherently less volatile than stocks.
As an aside: “Some say that gentlemen prefer blondes; that is incorrect, as it should be: Gentlemen prefer bonds J” (Old joke.)
Bonds basics
Savings, deposits, CD basics
Savings, deposits, CDs and all the basics you need to know for finance (apart from investment ideas and investment knowledge basics)
In my last few posts I did a series on making money online, but now I am back to information regarding more basic and simple topics, like can I make money from savings and CDs (certificates of deposits). As this blog is on ideas on how to become rich, and I am targeting a wide variety of readers, I shall now complete a series of articles for people who are risk averse and still wish to make money via deposits, mutual funds, index funds and the like. Investment may be something that you will want to look into also, and you can access investment basics and ideas here on my blog.
Topic for this post: Savings and deposits, (CDs) Banks’ Certificates of Deposit
Here, you lend a bank your money for a specific amount of time (up to, say, for instance five years). In return, you receive a set amount of annual interest and when the CD reaches maturity, meaning that it expires of ends, you come and get your money back. As a side note, this appears to be the most common plan for some Singaporeans to save money, as they lock it up in the bank where they cannot touch it and collect interest on it and don't have to think so much about making money.
How much interest you earn is the key to making money with CDs. And that depends on a number of factors such as which bank you visit and look around, the prevailing interest rate and how it compares to the inflation rate, how much money you invest and how long you lock it up for. It's important to note that inflation affects your interest rates because the higher the inflation the higher the rates, and hence you do not necessarily earn as much as with a lower inflation and lower interest rates. You can look around the banks and see what the rates are like as they change very often and usually depend on economic conditions or the like. In Singapore, generally the interest is usually very low, and in other countries, especially the United States and Britain generally the interest is usually better and higher.
When buying a CD, there are two terms you may need to know: the annual percentage yield APY and the annual percentage rate APR (Yahoo.com). The yield is the total amount of interest that you will earn in one year. It's expressed as a percentage of what you invest and takes into account that the way the bank compounds the interest. The rate is simply the interest rate you will earn for that year. If, say, you earned 1% per month, the APR would simply be 12%. But the APY would be 12.68%. That's because here the APY takes into account the compounding effect on the interest you earned earlier in the year.
For conservative investors, the best thing about CDs is that your money is safe, relatively speaking. When you purchase one through a bank, your total assets there should be insured, so there’s no worry there. The other advantage is that you know what's coming back to you, and hence you can plan accordingly. And you're still earning more here than if you let that money rot away in a savings account earning a paltry interest.
However, there are several big problems with CDs that everyone should be aware of: They have usually tiny returns as compared to other investment devices, they can lock up your money for the long haul and for many years, and they may not counter inflation. If you buy a five-year CD in 2002, for example, you can't get the money out any earlier than 2007 without paying a steep penalty. Even on a one-year CD, you might even be penalized for instance three months’ worth of interest. That's why a money market fund or an index fund may be usually better alternatives. The rates may sometimes be slightly lower, but you can always come back and withdraw your money whenever you see fit. Also, CDs may not be inflation proof, where sometimes your CD may not even be enough to counter inflation. The reason is that you are still taking in the older interest rate even when the general price level increases overall, thus shaving off your gains.
In other posts in this series we will be discussing about mutual funds and more on stocks and shares. Visit my website once again for more information!
How to become rich making money online 3
How to become rich making money online 3
This is the third and last instalment for this series on making money online basics and ideas that I will be writing. I may add more instalments on various themes related to making money online in future, but currently this is the end of my research into this area. As I've mentioned several times, this is an "ideas for money making" blog and isn't intended in any way to sell my products (anyways I have none and besides I'm not selling things). I will try to cover everything that I haven't in the last two posts in this one and summarise and conclude my findings and research into the very interesting topic of making money online via advertisements. After this series I will be looking into other financial devices such as CDs, mutual funds, investment analyses and the like. I also intend to do some interview skills, job hunting skills, questions to prepare for interviews, CVs, ideas on how to find a job or find a suitable occupation and the like. (I got all these ideas from Yahoo Answers, because many people ask these questions. This shows that there are many possible avenues to find information and resources anyways, and besides I should give my readers and customers what they want! Hoho.)
Here in this post, I will be talking about SEO. And common sense. And research. And then I will offer a summary of the entire series that I wrote on.
There is a famous blogger called "Grizzly" who has found out a method of making money online, which was basically outlined in my article. I based most of my research into his epic blog, which literally had posts 3000 words long each time. I reiterate that there are many ways of making money online, but Griz's ideas in his "make money online for beginners" was my main inspiration and source, because personally I felt that it was way better than trying to be an A list blogger (which I am not) and that the system he proposed somehow made more sense for me, and if it worked for him, then it might work for me as well. In short: that's why the focus of my articles has been to make money via advertisements on webpages as a central theme.
In any case, SEO was one of the things that he dealt with in his blog and the key idea is that if one wants to make money with a website, be it a website selling things or a blog, one has to make the site rise in the rankings and appear on any major search engines. This is the key to success in making more visitors read and go to your webpages. Of course the key question is how. How do we get Google to index the webpage? This will get a bit technical, so bear with me while I drill out the basics.
Writing articles that are original and new will give value and send your webpage higher in the rankings. The older your webpage, the better and more established it is. Keywords are words that people type into the search engines in order to find your blog or your website, and hence, they are very important in enabling google to find your site on the Internet. Backlinks, links that people use to find out, or in other words, links that point from other websites to your own website, are the final and most important way in which you can rise up the internet rankings. All these add up to become SEO, which is basically search engine optimisation, where in a sense, you optimise your site in order to make it easier to find on the Internet. The logic is clear and undeniable - just be found more easily, and you will make more money from advertisements, and it's as simple as that. The difficulty of course, is in actually doing it.
Common Sense
Next I would like to talk about common sense. There are many online offers to make sure you that get SEO or you get placed high in the rankings. This seems to be a good idea to invest your money in IF obviously you make more money than it costs to pay for the high rankings.
There are a few ways to reach the higher parts of the ranking and appear on the search engines. One is to literally buy your way there, and buy your position. That will cost you money, and as I said, some common sense is needed, and also if you want to turn professional and really earn money online, then you need to invest a lot of time and effort. The second method is to buy backlinks or join linkfarms, but then again, this might backfire, this might not work, and you still pay lots of money to have it done.
Note that if you want things to be free and not pay any money, you can still make money online, but never huge sums of $5000 a month or so that people claim on their websites, and certainly not $500,000 a year. If you pay money, you have a chance of earning that and it's not guaranteed that you'll succeed either, so stand warned. It'd be very natural that the people selling the products would claim that everyone can do it and that everyone can earn the money that they can; I don't know if it's true, but do be a bit skeptical of ludicrous claims.
In simple words: use some common sense and look around for alternative offers or different offers or better offers if you really want to invest your money into making money online. Common sense dictates that you invest your time and effort properly and ensure that you buy the needed and right products to make money off your blog or webpage. Common sense also dictates that you visit various sites on SEO, page ranks, Google.com, Yahoo.com, the advertising companies and the online money advertisers, the referrers etc, and all other related websites to find out what you need to know.
Common sense also leads on to the next topic, reading and researching.
Research
Some recommended starting points:
1. Read the earlier two posts in my blog here on making money online and decide for yourself what you would like to do, and how you'd like to make money online for yourself
2. Settle on the time, resources and interests needed - then do some online research by surfing the net
3. Visit all the websites related to the ideas listed above and in my other articles here on my blog - SEO (many sites on that!), Google adsense, TLA, Yahoo, etc.
4. Apply common sense and take out of consideration the sites that you don't need or don't want, or seem seedy or untrustworthy. I am rather skeptical by nature and I would strongly suggest you apply some skepticism to products that people hawk. Skepticism applies here also: you should research on everything I say and not take my word for it, and besides the approach I take throughout this ideas on how to make money blog is to suggest approaches and review ideas.
5. Visit sites and make your decisions after some time. All the best, if you do choose to make money online using advertisements!
Bear in mind also the other possibilities, apart from my focus on making money online via advertisements (by the way, Yahoo offers online publishers money as well, and offers their own kinds of ads that rival googles - there is some oligopolistic competition here I'd say). I list them below to remind you of your various options in this very very vast topic:
Various options and ways to make money online (repeat article)
Do online paid surveys and online polls that companies conduct
Also, there is something related that someone pointed out to me, so I will add it in here: there are some companies that offer online data entry jobs. Do data entry online. I have no idea what these do though, but I can extrapolate from normal data entry jobs, that you get to be paid by staying at home, working from home, and all you do is basically typing. Do find out more about making money online via data entry, and then try it if that is your kind of thing.
Run an online business. That is, sell and buy things on the Internet.
Do free e-books and then later charge for them online, selling e-books to people
Gamble on online casinos (and in some cases, people claim to have a system that can beat online casinos)
Design beautiful websites and blogs and sell them for money
Be an A-list pro blogger and get paid tonnes of money in advertisements, endorsements, articles, etc...
writing essays and writing literature papers and exam papers for students and desperate teachers to download.
Alright. Thanks for reading thus far. This concludes my making money online series in my blog on ideas on how to become rich. Stay tuned for more interesting and diverse financial topics!
How to become rich making money online 2
How to become rich making money online 2
This will be a very long post here on how to make money online with a focus on either website building or blog building using advertisements, with google adsense. This is an introductory analysis and there will be more to come here on my website, and more in other related posts here on my ideas blog. As I have mentioned before, one can make money either via online surveys, doing up a website/ blog, and then also doing online business. The thing is that there are many ways to make money online but there are no guarantees as to your success.
Making money by running a website with advertisements and google adsense, and how it should be done: I have summarised the ideas of several websites, and am going to condense the information simply for you so that you can make up your own minds. There are two types of bloggers who make money online: one intends to be an A Lister, which apparently means a blogger who wants to design an excellent blog and attract social traffic. The second type of blogger is someone who wants to design a site based on something that he can sell, refer or do a product/ service for. This will enable him to make money via advertising, either through google adsense or through some other advertising service.
There are shopping ads, TLA, yahoo publishers and many other companies that offer advertising services, so be sure to check them out if you're interested. Always make sure you have many sources of income and don't just depend on one single source.
In any case, the social A lister blogger makes money via endorsements, advertising on his site, online advertisement companies and also because he can make a lot of money writing good articles that people want to read. The other blogger who depends primarily on advertisements does not want to be like the A lister, and instead depends on advertisements, referrals and offering products. The key difference is the approach taken. I will be doing further analysis in later posts, so you might want to learn whatever you can in the way of ideas on making money online and make up your own mind.
How does one make money online using google adsense? It's actually very simple to establish google adsense, although make money online from it is rather difficult if you are aiming for a lot.
Firstly, get a website or a blog, or some webpage that you have a lot of content on. Then get an account with google adsense, or any other company of your choice. They will provide you with a code, and then you attach this code into your website, and then you're done. Hence, the company, either google or the other online company of your choice, will send ads to your website, and target it at your content. The point is that you need original and new content if you want to do well, because either you won't get targeted advertisements, or you will not be able to have ads because you do not have the requisite content or requirements. After you have set up your website and your code, sit back and wait for money to come rolling in!
It is not that simple of course, because the next step is then increasing your traffic and getting more readers. To do that, Search Engine Optimisation (SEO) becomes very important, and that has two parts: key words and backlinks, and is very technical. I will be analysing those two key elements in future posts under the heading SEO or Search Engine Optimisation.
As a word of caution, remember to listen and literally obey google's adsense policies! I myself adhere to these guidelines strongly because basically, he who pays the piper calls the tune. Google pays if you follow their policies closely and obey their every word, so just do as you're told and you'll do fine. This is a warning to those may intend to cheat, because I feel that there is no way to cheat a major technology company with global reach and very very strong search engines. I myself follow google's adsense policies, and I strongly suggest that if you decide to take up adsense you should do the same too.
If you know what SEO is, and you can raise traffic to your site which is serving targeted advertisements, you can now sit back and enjoy the fruits of your labour. The thing is to keep on writing good, nice articles that attract readers and buyers to your blog/ website. However, there are ways to become rich online using various methods. You would have to buy some products, such as one that would provide backlinks, provide page ranks, provide key words and ideas, and in some unethical cases, even provide articles. Yes, apparently you need the software to do all those things if you want to make it big making lots of money online, as it is not possible to do everything by hand or yourself. I recommend looking around the Internet if you're interested in an advanced "make money online" course.
I won't be covering underhand means of make money online in my blog, however, as my main emphasis is on legal ways of making money and becoming rich, and besides, investments, a sound job and a very good and stable income from many sources would make far more sense than depending on using underhand means of making money online. I don't believe that one should try to buy an article generator. That's my personal opinion.
But there are also legal ways of making your blog or your website more popular too, as well. But these are not really advanced tips, but more advanced than the basics I've just covered earlier in my post.
1. Write good articles.
2. Write often and write well!
3. Give some colours and graphics.
4. Let users post comments and their own ideas.
5. Get others to link you to their blogs/ websites.
6. Write to companies or write to online article submission directories.
7. Post your pictures, and please look handsome/ pretty! That would be a major advantage.
All the best, then! I do hope you can make money online.
(As an Economics aside: I would guess that this sort of economic analysis is rather important: The rise of online advertising and online industries, and how consumers play an important role in advancing online trade and online shopping. As long as there are companies that serve online ads, and as long as there are people willing to surf the Net in the search of online products, then to make money online is indeed possible. People must surf the Net and buy and order products from the Internet, and luckily for us, they do. Hence it means that there must be some form of traffic and Internet business before this kind of economic model can be successful. Due to the rise of online shopping, surfing and spending, this economic model can work well.)
