How To Get Rich

By Allen Chan

The aim of this ebook is to help you understand the impact of economic crisis and ultimately, teach you on how to make necessary preparations so it will have little or no effect on you and your lifestyle. As nobody foresee the rapid downturn of the economies, very few people have prepared for this event. Many found themselves without a roof over their head and without money on their pockets.
People from around the global were caught by surprised as economic crisis hit their country in 2008. The World's financial system is under great stress. Public and private debts are nearly unserviceable even with historically low interest rates. Governments around the world, whose fiscal policies have failed, are resorting to currency wars in an attempt to capture what little growth can be squeezed from world trade. The global financial system is a house of cards, debt upon debt. Prosperity has been borrowed from the future time and again and now the bills are due.
In your daily life, did you compare the amount of money you paid for a full tank at the gas station about five years ago to today? Did you go for a full shopping cart in the grocery store at the same price it was some years back? With this, you should know that things are going bad and no one is saying the truth, they pretend all is fine. This is the reason why you need to protect your future, live the life you want and be rich by learning how to:
 Invest in Gold & Silver
 Invest in Stock
 Invest in Property
 Internet Marketing
 Flip Website
 Trade domains
 Create Website for small business owner
 Write and sell eBook
 Option trading
 Trade Forex
You can pick one of the above or combine two or more together to make money and be rich. It is not as difficult as you think. You will be learning the basics. Ready, let’s go!

• Language: English
• Publisher: BookBaby
• Release date: Aug 18, 2013
• ISBN: 9781483505411

Book preview

Conclusion

Introduction

In the late 2007, the Federal Reserve eased monetary policy aggressively to deal with the emerging financial crisis and the recession that grew out of it. By the end of 2008, the federal funds interest rate targeted by Fed policy had been reduced to a zero-to-quarter-percent range.

In addition, special lending programs and asset purchases during 2008 to dissolve frozen credit markets expanded the Fed’s balance sheet dramatically. With short-term interest rates about as low as they could go, the Fed continued to purchase Treasuries and other assets, such as commercial paper and mortgage-backed securities, in what came to be known as quantitative easing as distinguished from interest-rate easing. This program, later called QE1, or Quantitative Easing number 1, lasted through March 2010.

The economy weakened following the end of QE1; so, on November 3, 2010, the Fed embarked on a program to buy more $600 billion in treasury securities. This program, which lasted through June 2011, was referred to as QE2.

The Fed’s lending and asset purchases during its conventional easing in 2008, plus QE1 and QE2, increased its total assets (and liabilities) by about $2 trillion, to about $2.8 trillion, where they have remained since mid-2011.

During 2012, the already weak recovery from the recession weakened further. At the same time, inflation remained close to the Fed’s new target rate of 2 percent. The Fed has a dual mandate from Congress to strive for both low inflation and low unemployment. It was meeting its low inflation mandate, but unemployment remained stuck above 8 percent, after having fallen from its peak of 10 percent.

QE3. Because its dual mandate was getting further out of balance—inflation was tame, but unemployment was stuck above 8 percent—the Federal Reserve announced a third round of quantitative easing on September 13, 2012. The Fed said it would buy $40 billion of agency mortgage-backed securities per month until the unemployment rate declined substantially. The goal is to pump more liquidity into the economy in a way that will reduce mortgage interest rates further.

The QE3 has further increased inflation, cost of living has gone up and income remain stagnant. The global financial system is a house of cards, debt upon debt. Prosperity has been borrowed from the future time and again and now the bills are due.

In your daily life, did you compare the amount of money you paid for a full tank at the gas station about five years ago to today? Did you go for a full shopping cart in the grocery store at the same price it was some years back? With this, you should know that things are going bad and no one is saying the truth, they pretend all is fine. This is the reason why you need to protect your future, live the life you want and be rich by learning how to:

Invest in Gold & Silver

Invest in Stock

Invest in Property

Internet Marketing

Flip Website

Trade domains

Create Website for small business owner

Write and sell eBook

Option trading

Trade Forex

You can pick one of the above or combine two or more together to make money and be rich. It is not as difficult as you think. You will be learning the basics in this e-book. Ready, let’s go!

Chapter One

Investing in Gold and Silver

A lot of things have been treated as money in the past (cattle, wheat, eggs, cigarettes, seashells and so on). Gold and silver came into the limelight about 2,600 years ago. It was minted into coins and bars to be money. Gold and silver are the only ones that have held their value for so long. This is because gold and silver have been the best stores of value and uses for money that is known worldwide.

Everywhere you look, people are talking about gold and silver, and it is not even Oscar season. So why have precious metals been taking center stage? Well, when investors are scared, they have historically bought gold, silver and other precious metals as a security blanket. Beyond using gold and silver in jewelry and industry, they are seen as a hedge against inflation. Why? Because investors assume such metals will hold or increase in value as major currencies decline in value due to financial uncertainty. This is a very way to make more money and become rich.

When you invest in Gold and Silver, you can:

Protect your savings against the currency devaluations.

Protect your purchasing power as inflation is steadily rising.

Protect yourself should a severe banking crisis or collapse occur

Protect your portfolio and wealth if an economic crisis in China, the US or Europe occurs.

Protect yourself against the uncontrolled actions of governments, who have excessive debts and try to solve it with huge money printing.

You have no counterparty risk with gold and silver (contrary to paper assets where there is always a counterparty risk involved)

You should own gold and silver because the trend is your friend.

If you are convinced of the need to invest in gold and silver, then you must know how to buy them.

The historical ratio of Gold to silver

Basically, the gold-to-silver ratio is the amount of silver it takes to purchase one ounce of gold. Sometime ago, the gold-to-silver ratio stood at approximately 50 to 1. That means, at the current price, it would take 50 ounces of silver to buy 1 ounce of gold.

Since 1687 – as far back as the records reach – the gold-to-silver ratio vacillated between roughly 14 and 100. Around 1900, the ratio steadied, remaining relatively flat.

Indeed, prior to 1900, the gold-to-silver ratio hovered around 16. This was likely because many countries were using gold- and silver-backed currencies. For instance, France and the United States (among others) assigned statutory limits on what the ratio could be.

Also, the U.S. Geological Survey estimates that there’s 17.5 times more silver in the Earth’s crust than gold, which could provide another explanation for the pre-1900 gold-to-silver ratio average.

Throughout the twentieth century though, the gold-to-silver ratio has averaged about 47-50 and has fluctuated wildly at times

It is very easy to calculate the ration of gold to silver on your own. Simply take the price of gold, divide it by the price of silver and you have the ratio. For example,

$1644 (gold price) ÷ $31.60 (silver price) = approximately 52 (Gold-to-Silver Ratio)

Investors who trade gold bullion, silver bullion and other precious metals scrutinize the gold-to-silver ratio as a signal for the right time to buy or sell a particular metal.

When the ratio is high, the general consensus is that silver is favored. This is because, relative to the ratio, silver is somewhat cheap.

Conversely, a low ratio tends to favor gold and may be a signal it’s a good time to buy the yellow metal. Many large-scale, experienced investors may trade their silver for gold as the ratio drops.

Unfortunately, because the gold-to-silver ratio fluctuates so wildly, it can be difficult for novice or small-scale investors to read the signals and make a profit.

Typically, the gold-to-silver ratio serves as an impetus for diversifying holdings. If one investment flops, alternate investments in your portfolio pick up the slack – or losses.

What this mean for the future?

Some experts predict the gold-to-silver ratio will return to its long-term, pre-1900 average of 16 to 1. Many factors are cited in this favorable claim. It’s worth noting however, among these experts are some of the most ardent advocates for silver investing.

In the end, in order for the ratio to return to its pre-1900 average, the price of silver would need to rise to approximately $105 per ounce. Likewise, if the ratio were to drop to its long-term average, silver prices would rise to about $61 per ounce.

The gold-to-silver ratio is indeed one of several valuable tools used to determine the optimum time to buy gold or silver bullion.

However, it is wise to avoid haste. Only the most experienced investors make profits using a short-term view, and even they suffer errors in judgment.

With patience, research and a long-term view, you may choose to buy silver when the ratio is high – buying higher quantities with fewer dollars.

How To Buy Gold and Silver

Now that you know the why, it is time to know the how of buying gold. First, gold and silver are sold by the Troy ounce. A Troy ounce weighs more than the ounce used in measuring milk or meat. A Troy ounce is 31.1 grams, which is over the 28.35-gram ounces you come across in everyday life. Therefore, a Troy ounce weighs about 10% more than a regular ounce. Put simply, it is most common to buy and sell precious metals by the Troy ounce.

Gold and Silver Numismatic and plain Bullion

When you are buying physical gold or silver, you can buy numismatic or just plain bullion. Numismatic coins are for experienced coin collectors. There are numismatic gold coins and silver coins. The value is determined on things such as the date it was issued, rarity, condition and even the mint where it was produced.

You will need to learn many things in order to be an investor in numismatic coins. You must also have a trusted and knowledgeable coin dealer to work with. As a beginner, it is advisable for you to invest in bullion. There are two main types of bullion products: bars and coins. The gold eagle coins and silver eagle coins are the best when buying bullion. The reasons are given below:

First, the bullion in coin form is a universally recognized unit of weight, and many consider gold and silver coins to be money. However, you cannot go to the supermarket with a gold or silver coin and buy groceries, but coins are the liquid way to own bullion. Unlike jewelry, you know the exact amount of gold or silver in the coin. It is minted by a government, which makes it very difficult to counterfeit. These features make gold coins and silver coins easy to cash in and trade.

Gold Bars and Silver Bars

Gold bars or silver bars of any kind are not recommended. This is because bars can range from a few grams to 600 ounces and small bars do not carry the same prestige as a minted coin. Multiple ounce bars cannot be broken up, and you are forced to sell the entire bar