Why Invest in Land

Since you are reading this page, it means your are thinking about investing in land. The book will explain why investing in land is good idea now. As there are many ways of making money, buying land is the most safest way out of them all. Before we go further let me tell you explain why I think that investing in land is best compared to other investment methods.

Common investment options available to a private investor are investing in Stock Market, Precious Metals, Business and Land. There are also other options like commodity trading, fixer-upper projects etc. Commodity trading is recommended only for very savvy investors which, most of us are not. There are many books on Fixer-upper so I will bother with it

Stock Market

Stock Market is a place where you buy and sell common stocks of public traded companies. There are two main Stock Markets in USA . They are the NYSE ( www.nyse.com ) and NASDAQ( www.nasdaq.com ). These are the places where you can trade with stocks of Companies like Intel, Microsoft, GE etc. The pros and cons of Stock Market are as follows.

Pros:

Easy to Invest:

It is very easy to invest in stock markets. There are various brokerage firms which will easily open an account for you. Now there are many online discount brokerage firms like E*Trade( www.etrade.com ) , Ameritrade( www.ameritrade.com ) , etc you can open an account and deposit your initial investment. Once they receive your fund you are all set

Easy to Trade:

You can buy/sell stock very easily. It takes less a minute to either buy or sell you pay a small fee for the trade. There are some discount brokers where you can buy and sell for less than $20.

Low starting Capital:

More brokerage company allows you to open an account with initial deposit as less as $2000.

Liquidity:

Your money invested in Stock market is very liquid. You can sell your stocks whenever you want and take you money out. Usually it takes less than 5 minute to sell your stocks. You can either call your broker or sell your self on online.

Time Required:

This investment not a full time activity. You can keep your day job and earn additional income.

Cons:

High risk:

Last few years have shown how quickly you can lose money in Stocks. There are many horror stories of day traders who lost a fortune in the stock market. Even ordinary investor lost a great deal of money because he was unable to sell his stock. Actually it is very difficult to know when too sell.

Most stocks become worthless when the company goes bankrupt. With Corporate scams on rise, companies worth billions can over night become worthless. Investors have lost lot of money in Companies like Enron, MCI, etc.

Control over price:

When you are investing in stocks you have no control over the buying and selling price. You can't bargain on the buying price. The price is set by the market.

Even when selling you have no control over the price. You have to sell at the market price. In short you are just going with the flow of the market so your fortunes are up one day and can go down another day depending upon conditions over which you have no control.

Over Priced:

Many investors don't know that most of the stocks which we buy today are over priced 10 to 20 times. If you look at the price per earnings ratio you will see most stocks are over priced. The market evaluations of most companies are very high, so they are very vulnerable to general economic condition.

Any sign of recession the stocks will take a nose dive like they took in 1997 during melt down of Asian economy or after 911 terrorist attacks. The overall economy condition is bleak for the next 2-5 years especially with the rising energy cost.

Precious Metals

Pros:

Easy to Invest:

It is very easy to buy precious metals like gold silver etc. There are many companies like monex ( www.monex.com ) Bullion Direct ( www.bulliondirect.com ). You can either call them or open an account Online

East to Trade:

You can buy and sell precious metals easily. Although unlike stocks they can't be sold in minutes but they are rather easy to sell.

Tangible Value:

One of the advantages of precious metals is that they always have a tangible value. Metal like Gold and silver have been in demand for centuries and they will always be in demand. They will never become worthless like stocks.

Time:

This investment not a full time activity. You can keep your day job and earn additional income.

Cons:

Theft:

There is always a chance that you can lose the precious metal to theft.

Control over price:

When you are investing in precious metal you have no control over the buying and selling price. You can't bargain on the buying price. The price is set by the International precious metal market. Even when selling you have no control over the price. You have to sell at the market price. In short you are just going with the flow of the market

Low ROI:

Precious metals are always considered as hedge against inflation. The average ROI( Returns On Investment) on Precious metals is always few percentages over inflation. You can never make a huge fortune by investing in precious metals.

Investing in a Business

Pros:

Ownership:

One of the advantages of investing in a business is a pride of ownership. You can become your own boss by successfully operating your business.

High ROI:

One of the advantage of a investing in a business is that you can make great fortunes if you are successful in your business. Many entrepreneurs have made large fortune by starting their own business.

Cons:

High Risk:

Investing money in a business is a very risky. You will not only lose your   initial investment but also lose much more later. Many people had to file bankruptcy due to failed business.

Time Required:

Most business require full time attention by the owners. Many business fail because the owners were not full time involved in their business. Don't expect to make money if are not involved full time.

Hard to buy/Sell:

Almost all business are difficult to buy and sell. It takes many months before you will find a business you like. Also when you decide to sell, it is not that easy. Usually you have to involve a Agent to sell it. You have pay up to 6% in commission. Also there are many legal issues involved when you buy and sell a business.

Investing in Land

Pros:

Low Risk:

Land is the most safest investment. Historically the price of land has always gone up. That is because there is limited amount of land. With the constant growth in population your land will always be in demand hence the chances of you losing money is very slim.

Ownership:

When you buy a land the is a pride of ownership. You actually own a price of property on which you can live, rent out, use a camping ground. You can do whatever you want as long as you are following the local laws and zoning restriction.

Control over price:

Another advantage of buying land is you get to negotiate the price with the seller. Because each land is unique you can bargain the buying price depending upon how motivated the seller is. Also when selling, you can set the selling price and wait for a buyer who will buy at that price.

High ROI:

Investing in land can also give you high RIO . You always hear about billionaires who made money in real estate. It is very possible even now you make a good amount of money. Further in my book I will explain you how.

Cons:

Hard to buy/Sell:

Some times it is difficult to buy and sell a land. Real estate sale usually in involves a real estate agent and also you have pay up to 6% in commission when you sell the land. Also there are many legal issues involved when you buy and sell a land. I will explain then in details later in my book

Liquidity:

The land is not as liquid as stocks or precious metal. It takes many weeks before you will find a land you like. Also when you decide to sell it can take few weeks to sell it

Conclusion:

Following table compares the various investments options

So in short, if you want an investment opportunity which requires low investment, low risk, high ROI (Return on investment), pride of ownership, which you can do part time and also is hedge against inflation than investing in land is the best option. Also many people invest in land to diversify their portfolio. With the rising oil price and constant threat from recession, investing in land is a good way to protect your financial assets.

Further in my book I will explain in details will a case study, how to do it.

Lets proceed to the next chapter to learn more about land..