o you put all of your This way, if your first
money into some safe CD’s speculative investment is a 100%
to earn interest, or buy a loss, you’ll still have the
biotech index fund to grab the income from your income-producing
next big move in genomic cancer investment to recover and try
drugs; or something in between? again. And, you’ll hopefully have
The world of investment options the added education that you will
and strategies grows every year, have learned from the speculative
so I’ll provide a simple tactic loss. (Starting with a solid
to boost your returns over the income-generating base can also
course of your investing career. give you the confidence to reach
for a more speculative trade.)
The flip-flop method refers to Once you are able to complete a
taking the income from an speculative profit, put the money
income-producing investment and into a brand-new income-producing
flipping that profit into a investment. This way, each
speculative investment. Then, speculative gain will diversify
take the profit from that your portfolio into a wider range
speculative investment and flop of income-producing investments.
the profit back into another
income-producing investment. By Once that you have created a
doing this back and forth you are stable base of investment income,
capturing both ends of the you should start ratcheting up
investment spectrum to increase the interest rate that you are
your portfolio in a quicker and willing to accept for new income
safer manner than either one investments. For example, you may
individually. have started out with a 3-year
bank certificate of deposit but
Always start with a relatively now you need to get a higher
safe income investment first. yield, perhaps by buying an
income-generating mutual fund. ebay, even after shipping costs.
There are funds of preferred I recommend you focus on your
stocks, loan portfolios, and greatest interest (music,
exchange-traded real estate motorcycles, watches, or
investment trusts. Moving even whatever) and find a market where
higher in yield may require some to buy at low prices. And then
online searching to find people add some value (refinish, update,
trying to sell their second add a bonus), and find a market
mortgages, annuities, pension to sell to the most frenzied
payments, etc. There are websites fans. Bigger chunks of money are
where people list financial made on more expensive items, but
assets like these for sale. If you carry more risk if you don’t
you aren’t comfortable with your keep up to date with the market.
level of expertise for buying Such as cars, boats, planes,
mortgages yet, you can start with homes, jewelry – objects that
only $100 with loan-broker have a consistent and measurable
websites such as prosper.com. marketplace to buy and sell them.
For speculation with financial
So you’ve got some income flowing instruments, you need to go to
and are itching to find a the futures market to get the
speculative deal to step up your largest moves, and the most
investing level. Let’s start as leverage. To keep from losing
small as possible: How about your home at the first
buying things at garage sales and “Locked-Limit” move against your
selling them for more money on position, options must be a part
ebay? I found an ad for several of each of your trades: either
hundred dollars of new printer buy options alone, hedge a
cartridges for sale in a local futures contract with an option,
classified ad. They were worth or use an option spread. When
much more by selling them on you’ve accrued bigger dollars to
play with, you can speculate with income-investment first, and then
land, commercial buildings, and start flipping and flopping your
businesses. profits between the
income-investments and the
In spite of the specific examples speculative-investments. This
that I have provided, you need to type of asset allocation
find areas that interest you the rebalancing will certainly add
most for investment vehicles for greater returns to your
both income-producing investments portfolio.
and purely speculative deals.
Remember to always start with an
About the Author:
Francis Kier has an MBA in finance and shares his two decades of experience with investing and personal finance. More of his articles are available at http://investing.real-solution-center.com.
