Loans & Finances Today

The Internet provides many sources of legitimate help for the budget inventor. There are several websites and resources that are absolutely free. The first is the United Inventors Association, a non-profit organization that was formed in 1990 for the sole purpose of educating and providing resources for independent inventors. While there is a fee to actually join the UIA, there is a wealth of free information available to any visitor to their website, www.uiausa.org. They offer free articles about various stages and aspects of inventing, lists of resources, legislative updates affecting independent inventors, free newsletters, brochures, and products to help independent inventors, recommended books, and service providers. They offer advice on how to avoid the invention scam companies. Additionally, the UIA lists the legitimate inventor seminars and workshops that are scattered about the country. Many of these seminars and workshops, while not entirely free, are reasonably priced. Most of them allow visitors to peruse the booths manned by other inventors for no charge at all. The more networking you can do with other inventors, the better. You never know when another inventor you meet will have exactly the right information or know a person you should contact who will expedite the entire process for you.

Discount coupons for three of the United Inventors’ Association’s most popular books are available in the back of this book.

In simple terms, your portfolio should reflect your personality as a saver, investor, and speculator. Pure savers will want all their money in savings instruments, pure investors will want it all in investments, and pure speculators will want it all in speculations. Most of you, however, will want to have some money in two or all three types of investments. The only way to determine amounts is to watch how different ratios affect your emotions.

For example, retirees are sometimes advised to have five years of living expenses in savings instruments. They can then place the rest of their money in investments and speculations. However, many retirees are unhappy with the low returns from savings instruments. Being more investors than savers, they will cut down to one year or even a few months of savings instruments and put the rest in investments. This will increase both their returns and happiness.

Other retirees will not want anything in investments. They will only be comfortable with everything in savings. While they may start retirement with five years of savings, eventually they will have twice their life expectancy in savings.

Anything sold as a limited partnership is a speculation. As a limited partner, you give up the right to control the investment and pay huge fees to those who do control the investment.

Limited partnerships work as fun money. Stage plays and movies are funded through limited partnerships. Returns are unpredictable and far more often negative than positive. Based on figures cited in the June 18, 2001 issue of Barron’s, more than 80 percent of the time, you lose every penny invested. Nevertheless, you do get to meet the stars, attend at opening night, secure seats for friends and family, and brag about an occasional hit.

Limited partnerships are also used to sell interests in airplanes, ships, train cars, heavy machinery, or any asset that requires a large capital investment. Overconfidence, again, is your enemy. The promoters will show you how valuable the asset is, how it will be leased or sold at a profit to a highly secure and profitable end user, and how reasonable their fees are for the service they are providing. You will have to qualify as an investor and will be told that you are one of a select group of individuals being offered this special deal for a limited time only. Once your ego has calmed down, you must ask: If this is such a great investment, why didn’t the users just get a bank loan and buy it themselves? In fact, why didn’t the promoters just get a bank loan and buy it themselves?

Remember, anything sold as a limited partnership is a speculation. Solid real estate, sold as limited partnerships, resulted in huge losses a few years back. Investors compatible with real estate were not compatible with RELPs. The packaging of any investment can affect its emotional impact on you. In the next chapter, we will look at packaging and other aspects of form that affect you even though the substance of the investment may otherwise be within your comfort zone.

Undeveloped land is for optimists. The idea is to buy the land, do absolutely nothing, and then cash out at a huge profit.

Overconfidence is an issue. The factors that will increase or decrease the value of your land are not predictable. Raw land has many uses or none.

The person who sold it to you knew more about the prospects than you do and he wanted out. The Realtor wanted you in as she collected a nice commission.

Laziness is another issue. Extensive research is required to prevent a huge loss. Land in a flood zone or on a fault line may be worthless. Welllocated land that cannot be subdivided into marketable lots has no value.

Environmental contamination has ruined millions of acres. Even if your land has none of these problems, you are powerless over the factors that will increase the value of your dirt. Cities grow in unpredictable directions and fall into recessions, depressions, even ghost towns. Vacation spots are hot and cold. Farm uses are not predictable. Meanwhile, taxes must be paid and assessments can come without warning. In addition, you have to keep the mortgage current, if you were able to find one.