Financial Articles

The dream of owning a luxury home, yacht, race horse or some other luxury item can become a reality with Shared (fractional) ownership.

So What Is It?

Shared or fractional ownership, not to be confused with timeshare, is where a number of people contribute funds to buy a leisure asset (e.g. house or yacht) and share the use of it. Crucially you also own a proportion of the asset, which is where it differs from timeshare. If the value of the asset increases then (in theory) the value of your share increases too. Contrast this with timeshare, where you only “own” the right to use the asset for the specified period of time each year.

Example

A group of people who are interested in buying a property in Mallorca, total cost £250,000, decide to buy it together. They each buy a 10th share for £25,000 which entitles them to 5 weeks use each year. The allocation of weeks is handled by season, with each group member choosing 1 week from high season, 2 weeks from mid-season, and 2 weeks from low season. The order in which they choose their weeks is initially chosen by lottery, and rotates thereafter. After a fixed period of 5 years the property is sold and the value returned to the share owners. Each share owner will pay a 10th of the maintenance fees. The time allocation and maintenance will be handled by a management company. Lower share sizes are possible, e.g. 50th shares which in the above example would give 1 week each year. Share sizes lower than 50th would entitle the share owner to entry into a lottery to determine whether they were entitled to a week in a year. Both of these options give a low-cost way to enjoy ownership, with the possibility of increasing your share size over time.

Benefits

Lower purchase cost is the major advantage. Alternatively if you have a lot of money to spend you could purchase something of much higher value than you would otherwise be able to! As maintenance will typically be taken care of via a management contract you will be free to simply enjoy the property, rather than worrying about looking after it. Of course you will only pay a proportion of the maintenance fees which makes sense, since most owners only actually use their property for 4-10 weeks of the year!

Possible Problems

Conflict with other group members over issues such as change-over times, damage, and time allocation are probably the most likely problems. These can be overcome by the use of a proper contract and management company. Also look out for high management charges, and the options available for selling your share.

More research can be undertaken at the following shared ownership web sites

http://www.Reachtogether.co.uk is a community dedicated to the promotion of shared ownership (of almost anything!). You can browse the current shared ownership schemes and/or suggest your own. Particular features of the schemes currently listed are the provision of specified end dates for the groups (usually 3-5 years), the low share values (from £100), and the option for the schemes to be self-managed (cutting out management fees).

More examples

http://www.bestpentic.com A two-bed, two-bathroom apartment at Sugar Hill, near Mullins Beach, in Barbados. A 10-week fraction costs £95,000, with a management fee of £3,751 pa; the estimated rental return is £4,405.

http://www.Pezula.com Twenty-one days a year in one of 10 4,300sq ft beachfront houses at Pezula Private Island & Residence Club in the Seychelles costs £145,000 plus £3,000 pa service charge. Four weeks a year, in two rotating two-week slots, in a five-bed house at Zimbali near Durban, South Africa, costs from £27,000 to £33,000 (depending on sea view), plus £500 pa service charges.

http://www.millionaire-property.com/ View millionaire properties for sale from around the world.

Copyright 2006 Nicholas Marr

Comparison Shopping

You won`t have any problems finding an online stock broker. The worldwide web is crawling with them! The hardest thing is to figure out which brokerage firm is right for you. This is as important as the stocks you will be investing in… so you`ll need to choose wisely.

You`ll first need to compare online stock trading brokerage firms. Compare their fees and their services, and then compare that information to what your needs are.

If you`re a new entrant in the field of online stock trading, you`ll be better off with a firm that provides a full service offering; one that not only caters to the basic educational and trading needs of a first-time trader, but one that also allows you to buy partial shares of stocks (by way of automatic payment on a regular basis) and accumulate your investments over time. If you`re lucky enough to find such a firm, you`ll relish the opportunity to also complement your investing strategies by making real-time trades to buy and sell stocks immediately during market hours.

Sharebuilder.com offers just such a service…and is my personal online stock trading brokerage firm of choice. When you actually compare online stock trading brokerage firms you`ll discover that ‘unlike traditional online investment services`, Sharebuilder gives investors a unique and powerful way to invest in the stock market. You`ll find (with Sharebuilder) that you`ll have a simple, flexible and affordable way to invest for the long term. You`ll find a ton of great articles and tutorials on all aspects of online stock trading on their site. Plus, you`ll even be able to compare Sharebuilder`s service offering with four of the other leading online brokerage firms as they have created a comparative analysis table for that very purpose.

Ok, with such a rosy picture painted of Sharebuilder.com, should you even bother to look elsewhere?

Of course! That`s what due diligence is all about. Research! Research! Research!

Don`t get me wrong. Sharebuilder is a great online stock trading brokerage firm to deal with. But I`m biased, because I`m a rookie online stock trader and I need all the help I can get…and these guys deliver!

On the other hand, if you`re a long-time trader who invests big money per trade, you`ll no doubt be looking for the most cost-effective brokerage firm online; possibly one that charges less than $10 per round turn.

When I first started trading stocks online with Sharebuilder, I decided I would invest the princely sum of $100… because I could! You see…unlike most any other online stock trading brokerage firm I had ever encountered, I found that Sharebuilder had no minimum deposit requirement…and since that was a big priority on my list, they got my vote.

Interestingly, the four other online brokerage firms featured in Sharebuilder`s comparison table all have what some may consider pretty hefty minimum deposit policies. TD Ameritrade`s minimum is listed at $2000, while Schwab`s is $2500. NB: After I verified this information on the respective web sites, I chose Sharebuilder for that one reason.

Another important criterion to consider when you compare online stock trading brokerage firms is (as I stated earlier) the round turn (commission) charges of the trades or online market orders. Sharebuilder charges from $11.95 to $15.95 depending on which plan you choose. Since I chose the freebie plan, my market trades cost me $15.95 each… but I can live with that because their service is so good.

TD Ameritrade however, won the coin toss at $9.99. Believe me…this is an excellent rate for any online stock trader who deals in large volumes.

As for me?

Well, all I had to start with was a mere $100… and given that TD Ameritrade`s minimum balance requirement is $2,000…umm…well…you get the picture?

I might add though that all five brokerage firms involved in the comparison offered online statements, confirmations of trades, along with reinvestments of dividends. That in itself is quite impressive compared to many of the lesser brokerage firms online.

Annual maintenance and low balance fees was also an interesting comparison. Three of the brokerage firms, including Sharebuilder did not charge any fees for these… while E*trade and Schwab charged $160 and $120 a year respectively!

The important thing and the only important thing to consider when you compare online stock trading brokerage firms is which one can meet your needs? All of the companies mentioned in this article are upstanding companies with variable policies. Choose the one that`s best for you…and you`ll be on your way.

actually be high return investmentsIf you take the above 4 high return investments, it’s a fact that land and real estate produce far bigger gains on average than mutual funds or leveraged managed funds and they also do so with low risk.

If you want a high return investment forget the hype and the minority of mutual funds and leveraged funds that make stunning gains most don’t.

Hedge funds are a perfect example. Very few win. Their cloaked in secrecy, in offshore locations most of the time. So, you never know what’s going on and when you find out it’s too late.

High return and low risk

If you take real estate and land the way to turn these into high return investments is simply to pick the right location. If you do this you will have a high return investment with low risk.

Double your investment quickly with low risk!

There are many overseas locations in particular where you can buy easily, cheaply and have stunning potential rewards.

Costa Rica is a well known favourite of American and other foreign investors. Many savvy investors are making double or triple digit returns in just a few years with low risk.

It’s a safe country, investing is easy, its tax efficient and your investment is liquid i.e it can be bought and sold quickly to bank profits.

If you have never thought of land and real estate as high return investments you should.

You can get high returns and low risk in the right locations and Costa Rica is a perfect example of a location that gives you low risk and high reward.

Take a closer look and you may be glad you did.

Article By: Sacha Tarkovsky