Always Ask Yourself Five Key Questions Before You Invest

If you're anywhere near retirement, you don't want to unnecessarily risk what you've saved. So before you invest, ask yourself these key questions.

1. Do I understand what I'm investing in?

Products offered come in all shapes and sizes. Remember that you should understand how your investment works - and not in a superficial way.

Find out how it's suppose to earn money for you, how much you should expect to receive, and under what conditions it would either not earn that amount or would lose it's value.

2. How risky is this investment for me?

Part of an investment's risk relates to how its earnings and value fluctuates with market conditions. Interest rate increases depress the value of a bond you own. Stocks will generally respond to significant market trends. Bank deposits give low but reliable interest earnings.

Determine how vulnerable you are to basic market risks. If you require an income you can count on and need access to your money, then stay away from investments that can easily fluctuate with the market.

3. What if the company goes bust?

Certainly stocks and bonds can become worthless if their associated company goes down.

Some investments carry guarantees that prevent complete loss of your investment. Bank deposits and CDs carry FDIC insurance. Insurance products often have private insurance against a company unable to pay it's obligations to you. These guarantees are limited, though.

Ask what assurances there are for you to recover your investment if the company handling it goes bust. For investing in an insurance product, check the current rating of the company. Know all the limits.

4. What are all the charges?

If you buy a stock or bond, the charge to participate in its investment performance is the brokerage fee to buy and sell it. But all other investments such as mutual funds or ETFs, are offered by an intermediary. They buy the underlying stocks or bonds then sell you a share in their own fund. They make money by charging you fees.

Insurance companies create their own products. The unique 'assurance' they offer you with their product is principally supported by fees.

Ask what all the fees you'll be charged with are. Then determine how much those fees will cut into the expected performance of the product. Fee structures can be deceptive.

5. What are the tax implications?

Our tax system significantly affects our overall investment return.

Determine when and how your investment will be taxed. Will it be taxed as ordinary income or taxed under favorable rates associated with capital gains or qualified dividends? Finding the answers to these questions before you invest is your best investment. That's because due diligence will pay returns and prevent losses that hunches, guesses and rushed investing will not.

Getting Extra Cash for Your Studies

If you're a student, you're definitely going to need money - a lot of it! Education isn't cheap and there are plenty of things that you would need to pay for, right from your fees, to the cost of books, food, and clothing as well as a room to stay.

Tips to help you get extra cash and save on what you have

Of course, getting extra cash is the best option; but, what if you could save on what you have as well? So, for now let us take a look at a few tips in both categories so that you would be able to have an amazing student life:

Find a part-time job

One of the most common ways to make some extra cash is to find a part-time job in a local library, shop or maybe even your university itself. However, one drawback of a part-time job is the fact that you would have to work at fixed hours which can be really tiring.

But, if you do need the cash, this is one of the best ways to do it. Therefore, as far as possible try and find one that gives you a lot of freedom.

Work as a freelancer

You've definitely got some talent and people are looking to hire. So, if you know what you're good at, go ahead and build up a portfolio. Create a blog and put it up. Join online sites such as Elance, oDesk and the like and try and find clients that would be willing to pay you for your work.

This may not seem like much, but once you get started you would notice that it's the best thing one could do. There are so many students who already work this way and support themselves entirely.

Save on your food bills

One of the best ways to save some extra cash would be on your food bills. This is where most of your money would be spent and that's the reason it's also the best place to save.

Rather than buying junk food, you should try and buy something healthy once in a way. It would be cheaper and at the same time better for your health and is therefore a win-win situation for you!

Use your library and the internet

Rather than spending thousands on books, you should try and make best use of your library as well as the internet to find the books you need. Today more than ever you wouldn't need to spend even a penny on books.

Counterfeiting and US Currency History

Paper money has been printed and used in the US since before the establishment of the United States as an independent nation. It has undergone many changes during the last two centuries and continues to evolve even today. Most of the major changes, to some degree, have been influenced by the practice of counterfeiting.

During the early 1800's, state-chartered banks in the US could issue currency. This not only created many problems with counterfeiting, but also with insolvent banks. This made for a feeling of uncertainty about whether or not the currency you had was worth anything. Eventually, this led to a currency panic and was the impetus for the creation of the National Currency Act, which was renamed the National Banking Act of 1864. This Act took banking out of the hands of individual states and into a network of federally chartered banks that could legally issue currency backed by the Treasury Department. The First National Bank of Philadelphia, Pennsylvania was the first to acquire a national charter. Eventually, over 1,500 state banks were converted to federally chartered banks.

Even though they were federally backed, bank notes issued by federally chartered banks consisted of independent designs based on the institution. They held the names of the financial institutions that issued them, but universally incorporated the National Treasury Seal, which was intended as a deterrent to counterfeiting. There were different sized bills, typically larger than those we use today. Initially, the currency was printed by independent printing houses, but in 1876 currency printing for all national banks became the responsibility of the Bureau of Engraving and Printing, under the direction of the Department of the Treasury. Although the US Mint produces coins, paper money is still produced by the Bureau of Engraving and Printing today, with locations in Washington DC and Fort Worth, Texas.

Freeport National Bank, now known as Texas Gulf Bank, was chartered in 1913 and located in Freeport, Texas. It is just one example of the thousands of nationally-chartered banks that issued their own currency under the provisions of the National Currency Act. Examples of $5 and $20 bank notes issued by Freeport National Bank can be found on the Texas Gulf Bank history timeline.

The Federal Reserve Act of 1913 created the nation's first centralized bank to regulate and produce money, called the Federal Reserve. It wasn't until 1929 that the design of paper money was standardized. At that time, the bills were reduced in size to lower the cost of printing, and designs were standardized not only to reduce costs, but to make it easier for the public to recognize counterfeited bills. Federal Reserve Notes are now the only US currency produced.

US Currency today continues to change, as the government strives to keep pace with the increasing sophistication of counterfeiting technology. Since 1990, bills have included microprinting and a security thread to make counterfeit bills easier to detect. Over the last 10 years, bills with additional coloring and enhanced security features have been introduced.To date, every denomination has been redesigned except for the one dollar bill (although the new $100 bill has not yet been released due to manufacturing problems). Current projections are that it will be released during 2013. Security features are easily recognizable and can be checked to determine if a bill you have is authentic or counterfeit. Some of the security features currently in use on new currency include:

· Watermarks that can be seen when the bill is held near a light source

· A security thread that glows blue in ultraviolet light

· Microprinting has been added that, because of its size, is difficult to replicate.

· 10, 20 and 50 dollar bills now also contain color-shifting ink that makes it easier to check the authenticity of money.

· The new $100 bill has a "bell in the inkwell" feature that shifts color and makes the bell located in the ink jar appear or disappear as the bill is tilted.

To learn how to verify that a bill is not counterfeit, and to find out why it is important to know, visit the Bureau of Engraving and Printing's website dedicated to all things " new money ". As counterfeiting advances, what new features will be required in the future?

How Your Business Affects Your Personal Credit Score

Because of the internet and widespread educational campaigns by the government and the business communities, most consumers are pretty savvy when it comes to credit ratings these days. Almost everyone knows that the debts we have, specifically the kind of debt and their status, and our ability to borrow further have a symbiotic relationship. For most people this relationship is clear and straightforward - not paying your debts affect your credit rating negatively and vice versa. However, things can get a little cloudy for folks who operate a small incorporated business that is failing. Although incorporating your business means that it stays separate from your personal finances, some of the business transactions you have [done] may still be tied to your personal credit rating.

To determine if your business' failure could affect your credit score, you need answer this simple question: Have you personally guaranteed your company's debts? If so, then your company's failure will likely affect your credit rating. Business owners unwittingly guarantee their company's debts through many ways but here are the three main ways:

1. Through Written Communication

You become personally responsible for your company's debts if you communicate a personal guarantee to a vendor or other claimant through writing. Although most business owners are smart enough to avoid this, they may still get into trouble especially if they slip up in a casual email.

2. Through Your Social Security Number

If your own SSN is used in opening a business credit card or other accounts, those debts become your personal liability. To verify this, ask your bank to look up your credit card account using your SSN. If they find it using your SSN, you are indeed personally liable.

3. Through Your Business' Contracts With Credit Provides

When opening a business account, some credit card contracts include a clause stating that regardless of the use or purpose of the card - meaning that even if it's a company card opened without your SSN - you are still personally liable. To find out, read your company card's credit agreement.

When closing down a failed business, there are still some best practices whether you are personally liable for its debts or not. Even if you have no plans to pay your debts to vendors, returning unsold inventory to them demonstrates good faith and might even slightly reduce your debts. Another practice that helps is being up-front with all vendors and other creditors because hiding your intent to close down the business could complicate your debt situation, especially when dealing with them in the future.

Having expert advice when incorporating and signing up for credit cards or lines of credit not only expedites the process but also protects you from obtaining business debts that are tied to your personal finances.

Entrepreneurial Magic

If you have read my last few articles, you may be starting to understand the full value of Honest Money to society and to you and ME... but we have barely scratched the surface. The well hidden 'magic' of Gold money emerges only once Gold is in free circulation.

To understand this 'magic' and its effects on society, we need to look at a bit of history. Under the classical Gold standard, during 'Peaceable Times', major war was impossible. Not only that, but there was no such thing now known as 'structural unemployment'.

Remember, the mandate of the Central Bank of the USA (the Fed) is to 'fight inflation' and to 'fight unemployment'... but both inflation and unemployment do NOT exist under a Gold standard. The nineteenth century had neither inflation nor structural unemployment.

Both inflation (monetary debasement) and structural unemployment first have to be created... and then be seen as being 'fought' by our 'Heroic Bankster'. Gradually dropping prices and full employment were the reality experienced under Gold. Inflation is the direct result of monetary debasement... and unemployment is the direct result of the destruction of the Gold Standard and its accompanying credit systems.

The Big Lie operating here is well entrenched in the collective; 'it takes money to make money'. This statement is one that Mr. G'man and his corporate supporters want you to believe. After all, if it were true, then no one without any money could ever hope to make money... or could ever hope to compete with existing corporate players.
Furthermore, if it were true, then someone with no money but a desire to make money would be obliged to borrow... to the loud cheers of Mr. Bankster. If we choose to NOT believe this 'Big Lie', then we can easily see examples of people who make money... without money to start with.

Seemingly magically, it takes NO money to make money. Does this sound too good to be true? Sound like another Ponzi scheme? Well, no... in fact, using trust based 'commercial credit', it is laughably simple to make money with no money... small entrepreneurs in poorly 'regulated' i.e. uncontrolled, free and voluntary markets do so even today.

To bring this home, suppose you lose your job as the economy crashes, but you are ambitious and instead of begging for handouts, either on street corner or from the G'man 'welfare', you want to start a business and make a living without having a traditional 'job'. If you believe the Big Lie... 'It Takes Money to Make Money'... you will never even start. If you see through the lie, you can start a small business and succeed.

During the last session of the New Austrian School of Economics in Madrid, Spain, I was eye witness to just such entrepreneurial 'magic'. With the financial crisis at hand, the streets of Madrid had many beggars clinking their cups for handouts, many homeless people sleeping on the streets, and many other signs of poverty. However, primal entrepreneurship also showed up.

Rain started to fall, and in a matter of seconds there were street vendors crying out, shouting 'umbrellas for sale'... to an appreciative clientele. Now where did these entrepreneurs come from, and where did the umbrellas come from? Street vendors do not have money to buy and hold a stock of umbrellas; nor are they employees of conventional retail outlets; they are simply entrepreneurs, who disdain the dole... and who are eager to earn a profit.

How do they get inventory, if they have no money and are not store employees? Simple; through credit based in trust. The umbrellas are on consignment from the wholesaler; the street merchant will sell what he can, return the unsold units... and pay for what he sold. He will make a profit on umbrellas he sells. After all, his overhead and his costs are zero... except perhaps for some wear on his shoe soles!

Who benefits? Of course, the street vendor benefits; if he manages to sell umbrellas, and make a profit. Also the wholesaler benefits; he could not have made these sales without giving his umbrellas out on consignment... without giving his trust to the vendors. Finally, customers benefit; caught in a sudden rainfall, many people are glad to buy an umbrella just when they need one... without having to hunt for a retail store in the rain.

But what about our G'man and Bankster? Do they benefit? Mr. G'man does not; the vendor is not 'licensed' or 'authorized' to sell umbrellas... and thus pays no protection fees. Mr. Bankster does not; the vendor never borrows money, so pays no interest.

If selling umbrellas was not such a fringe activity, Mr. G'man would undoubtedly have set up the framework for 'regulating' the sale of umbrellas... and tapping into the value created by the vendors like the true parasites they are.

Can you not taste the propaganda? 'Studies' released by mainstream media showing that umbrellas are dangerous; hundreds of people get hurt by an umbrella every year... 'Studies' showing that umbrellas are 'unsound'... hundreds of umbrellas collapse in the wind every year. Safety standards, testing laboratories, bureaucracy, umbrella police... just like in virtually all 'non fringe' economic activity today.

Compliance costs would drive the vendors out of business... and perhaps force them to join the other beggars, clinking their cups for a handout. Consumers could run around trying to find an over-priced 'regulated', 'authorized' umbrella in the pouring rain. And who would foot the bill for supporting the newly created beggars?

The idea that credit can be based on trust seems incredible to us. But trust based credit is potentially enormous; before WWI, all consumer trade was funded by exactly such a trust based system of credit. No loans, no interest payments, no collateral... just free credit that benefits all commerce, all consumers, all entrepreneurs.

As the World economy falters, in the rest of the world like in Spain, Greece, Ireland, and on and on, we will all make a choice. Will we choose to be beggars, holding out our cups in the hope that someone puts a 'dime' in it... or will we choose to be entrepreneurs, who see opportunity to provide value to the markets... and proceed to do so? The future of the world economy depends on us making the right choice; trust based credit, vs. endless debt.

It was the destruction of the trust based credit system and its replacement by bank loans, by debt with interest payments to Mr. Bankster that led to structural unemployment... and to the dole. We will not solve our debt problems or our unemployment problems until we recognize this truth... and act on it. Just as the world needs Gold money, it needs Gold based credit... Gold is synonymous with Trust.

Grow China's GDP Through Investment, Not Consumption

Many in the world are obsessed with predicting China's GDP. It is obvious that China will not grow at double digits in the near future, or, perhaps, ever again. Everyone, or at least those with a public opinion, seems to believe the key to China's GDP growth: invest less and consume more.

Forget about the fixation on increasing consumption; this is happening and will naturally continue with a growing middle class. In reality, in spite of its growth, for the foreseeable future consumption will not replace investment as the key driver of China's GDP. Most Chinese feel they live with a sword of Damocles hanging over their heads, i.e., a fast-growing and rapidly aging population, soaring inflation and a growing deficit ( RMB18.3 trillion or US $2.95 trillion) in the government provided "social security" program.

Our bet is on investment, not just in infrastructure projects such as highways, bridges or residential high rise buildings which China has in relative abundance, but on some industries that will not only significantly boost GDP growth, but also will have a big impact on people's quality of life.

It is not difficult to identify some industries that meet these criteria. Environmental improvement and protection, first and foremost is an obvious candidate. China's air and water quality is deteriorating as the result of two decades of destructive manufacturing activities. According to Elizabeth Economy of the Council on Foreign Relations, China is currently spending 1.3% of its GDP on environmental protection initiatives, half of which goes to infrastructure development and other projects not directly related to the protection. According to the European Commission, in 2011 the environmental protection expenditure of the EU-27 was 1.2% of total GDP. Given the severe environmental challenges facing China, much more investment should be channeled into this industry. It will help create more job opportunities, facilitate R&D and encourage more international companies to participate in China's market and will result in more than just economic gain.

Another sector of the Chinese economy that presents tremendous opportunities for growth is the medical device industry. China's per capita consumption in 2012 of medical devices was $14 vs. $370 in the U.S. Of the more than 16,000 Chinese manufacturers, the largest 200 comprised less than 20% of total production in 2012 and most of them manufacture low-end products which incorporate limited technology. More than 67% of medical devices consumed in China are imported.

In the past few years, some city governments, e.g., Suzhou, Jiangsu Province, have established successful industry parks to incubate biotech companies. But there is so much more that can and should be done. For example, both the central and provincial governments could help Chinese companies in the areas of technology licensing and commercialization by facilitating financing through establishment of seed funds. Additionally, the government could encourage local companies to focus on innovation through tax incentives and better IP protection.

In spite of heavy investment in Chinese public infrastructure over the past twenty years, there are still many ways to improve this type of investment in the future. For instance, China's bullet trains make traveling much easier and faster. However, many newly constructed bullet train stations do not have elevators or escalators. Passengers must carry or shoulder their heavy luggage up and down stairs, which are often seemingly endless, especially to those shouldering heavy loads. Once train travelers exit the station they often struggle to find public transportation. Few stations directly connect with a bus or subway terminal and obtaining a taxi is often literally a physical battle.

Needless to say, China still has tremendous growth potential. With a more thoughtful and prudent public and private investment approach, the country may continue to achieve sustainable high growth while also enhancing and improving the lives, health and overall well being of its people.

Restoring America By Educating Our Next Generation!

What could possibly be more important than preserving our nation and our freedom for the next generation? If you agree with that statement than you agree with The Society that educating our young people in finance & economics is an absolutely critical item that needs to be accomplished in order to promote prosperity for the next decades. The questions of course that we must ask are what do we do and how do we do it; otherwise we're no more than the talking heads who complain, but provide no solution, and far be that from The Society.

In America today young people are treated as if they incapable of learning the critical issues related to money, investing and economics. Nothing could be farther from the truth! By 6th or 7th grade, most kids are actively engaged in our economy spending money, so why shouldn't they be taught how to be a positive participant in our free (capitalistic) economic system. Why should these Junior High School aged kids not be taught what a bank is; what an insurance is; what business is; where government gets its money, etc. The Society believes that all young American's should be taught the critical life-skills they need beginning at the earliest possible age.

So with the question of "who should be educated" answered, the question of "how should they be educated" comes to mind. The Society does not believe in "dumbing down" a curriculum to live down to the standards in many cases being pushed upon our kids, but rather believes in bringing kids up through a combination of audio, video and printed materials. We know that people have different methods of learning; some are visual, some are audio and some are written so we need to incorporate all three methods. Furthermore, the lessons that need to be taught to the nations next generation must be broad based and foundation in that it teaches economics & finance in English from the bottom up. The current curriculum offered vis-à-vis the Path to Prosperity Audio Library and Print Edition offer a comprehensive curriculum of 23 important lessons. These lessons begin with the fundamentals of banking and increase in complexity into lessons on day-trading and global investing. These lessons are provided in audio and print form. To supplement this, The Society has produced dozens of live Webinars and Video's and will continue to create more in the future. Our position quite simply is that education never ends and it is an incumbent responsibility to The Society to create better and better content on a continual basis.

According to a recent Harris poll, 2 out of five American's rated themselves at a C, D or F in financial literacy. This is a dangerous if not fatal statistics because the American Republic requires an informed and educated population. If individuals don't understand basic financial and economic concepts, how then can we expect them to vote, or to raise children capable of making wise decisions for our nation's future?

The danger here is real. First, financially ignorant people are incapable of participating fully in a marketplace; for example a recent study by the Atlanta Fed found that 36% of people believed they had fixed rate mortgages when in fact they had adjustable mortgages. The second issue is that the consumer problem will lead to a government solution which will make the matter worse, not better. Rather than fighting the problem where it is, that is at the individuals own educational level, government will regulate providers of financial services holding them accountable for bad decisions made by individuals. This will dramatically raise the cost of doing business and will force smaller providers to close shop thus reducing the supply of services. A corollary to this issue arises as government relieves the individuals from the responsibility of making good choices, this leads to more and more making poor choices because they will come to believe it is someone else's responsibility. In the end, a government solution will create less supply and less willingness to truly fix the problem.

We must all become part of the solution to this major dilemma. Far too many people sit around the kitchen table at night and simply complain about the state of affairs in the United States. Far too often do people simply throw up their hands because they believe the problems faced personally and by our nation are simply too big to tackle. Far too often do people simply give up, and turn themselves and their children over to the state for caretaking. The Society believes this is unsustainable as a model as eventually, should too many people buy into this, there will be no more producers left to pay the bills and thus The Society believes we must solve this problem by providing people a clear message that their future is in their own hands, and we must couple this with the tools they need to build and sustain the type of prosperous life they desire.