A very good time to invest....... (24)

I wish I had a spare 100,000 euros or dollars or pounds to invest right now; it's an excellent time to make some money with very little risk.

Both bank shares and bank bonds have fallen sharply over the past few months - for obvious reasons that I do not need to go into.

I'd not personally invest in bank shares as I am a natural born coward and don't like investing directly on the stock market - too much like gambling in my opinion and I've always been a loser when gambling.

But bank bonds - another matter altogether!

You can buy a bank bond now for much less than its face value.

Say you have a bank bond with a 'coupon' (the 'coupon' is the interestt rate it pays to the bearer either annually or bi-annually)of 6.5% that matures in September 2012. This means you'll get paid 6.5% on the face value of the bond until you get all your money back in 2012.

If the buying price for the bond was 'at par' you'd pay $1 or £1 or Euroes 1 for every dollar or whatever of face value. If you pay less than 1.00 you buy 'below par' and if you buy at over 1.00 you buy in 'abover par. Simple, ok?

Now work it out if you can buy that bond for only 70 cents for a face value of one - you can buy $100,000 worth of bonds for only $70,000 and will make a gainh of $30,000 provided you keep the bond to maturity and the bank doesn't go bust and pays up.

Meanwhile you are getting your coupon of (in this ficticious example) of 6.5% on the full $100,000 which you only paid $70,000 for - so your real rate of return is 6,500/70,000 x 100 = 9.28571% instead of a mere 6.5%.

So, now is a good time to invest if you have some spare capital. I don't. I wish I had! You can both increase your income AND have capital growth in relative safety........... ok, this may not apply if you got greedy and decided to invest in Icelandic bonds - I was tempted to last year (but didn't have the money available then either) so I guess I was kinda lucky!

Anyway, good luck to all of you and I hope that this worldwide financial crisis hasn't affected you too negatively - and remembering that every cloud has a silver lining can help you turn what might appear to be a disaster to your advantage.

I DO, however, believe that inflation is going to go up further still - and this makes me sad because the elderly, as usual, on fixed incomes are the ones most like to suffer as a result.

Governments, with huge debts, will welcome inflation as the value of their debt will reduce magically over time as inflation erodes their mountains of debt.

Good luck!

The finanancial crisis only affects those with lots to lose, those of us that do not have lots to lose are ok.

It does affect those who have lost their jobs, their homes as a result of the current climate...

Those that are shaking in their Guccis, on Wall Street and Canary Wharf, I feel for a little, but I am surprised they were not smart enough to see it coming.

Even a minion such as me could see it.

I invest a little, as that is all I have, a little.

It's all relative - some people have a lot going for them in their lives - and huge overheads where their earnings are eaten up by expensive lifestyles (not lavish, you understand but some lifestyles have to kinda go with the job and the location)...... I keep saying that it's a matter of choice, but many people believe they have no choice and they are swept along by the tide of life events.

The truth is that we all have choices. You yourself made a move to Austria yourself and have done 'ok' - more than 'ok' from your positive posts! Well done!¬

It's just that, at any given point in time, the choices we perceive are limited, and it doesn't make sense to throw away what little perceived security we have.

Some people are very clever and make changes over a period of time to accommodate a pre-determined change without risking all on day one of their new lives. We have one such CS member who moved gradually from one country to another over a period of a couple of years - not making the final move until he felt reasonably secure in his new environment.

I take my hat off to him - it certainly wasn't an easy thing to do, but he had the determination to make his dream come true, and it happened.

oh dear i feel so sorry for the bankers,lets have a collection for them,i put them on the same level as bailiffs,scum of the earth

the rich soon get back on their feet,usually by ripping off others and thats how they got rich in the first place,in most cases

Totally agree.Just to add..split your money between several countries where the goverments have said that savinging will be safe...in irleand all irish owned banks will protect savings to the value of 30,000e...the UK have just done the same and germany have just introduced the same policy....

But the reason for todays mess is down to bad management and not intrest ratse as such but more to do with the inter bank rates (the rate where they lend each other money)..the banks lent money to other banks knowing full well they (the borower) hadn't got the assets to cover the amount lent....

Lisa.

Not all, some yes.
Also being rich financially by no means makes up for being rich in other areas of your life...

I am rich, in far more ways than I ever will be financially, I have no burning desire to be rich financially, just to be able to survive and provide for the fruit of my loins is enough for me...

Not to mention lending to people who could not afford it...