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OTHER INVESTMENTS Savings and Investing

OTHER INVESTMENTS Savings and Investing. Investing in Real Estate. Real estate is land and any buildings on it Direct investment in vacant land, single family home, condominium, duplex, and recreation properties Indirect real estate investment

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OTHER INVESTMENTS Savings and Investing

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  1. OTHER INVESTMENTS Savings and Investing

  2. Investing in Real Estate • Real estate is land and any buildings on it • Direct investment in vacant land, single family home, condominium, duplex, and recreation properties • Indirect real estate investment • Real estate syndicate pool investor money to purchase high value real estate • Real estate investment trust (REIT) is similar to a mutual fund • Can buy or sell REIT shares

  3. Real Estate (cont’d) • Participation certificate – investment in a pool of mortgages that have been purchased by a government agency • Gov’t National Mortgage Association (Ginnie Mae) • Federal Home Loan Mortgage Corp (Freddie Mac) • Federal National Mortgage Association (Fannie Mae) • Mortgage is a loan to purchase real estate • Depreciation is a decline in the value of a property due to normal wear and tear

  4. Metals, Gems & Collectables • Speculative investments • Potential storage issues • Indirect investments (shares in gold mining company) • Resale market is usually small

  5. Financial Instruments • Commodities include farm products and metals • Volatile prices due to non market and political risk • Futures - contracts to buy and sell commodities or stocks for a specified price on a specified date in the future • Option is a right, not the obligation, to buy or sell a commodity or stock for a specified price within a specified time period • Call option – right to buy • Put option – right to sell

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