Monthly Archives: February 2021

SEIS the Tax-Free Investment Opportunity for UK Investors

Enterprise Investment Schemes

An EIS is an investment vehicle that provides funds and capital to small businesses that, due to the tightening of the credit market, cannot otherwise get financing from traditional sources. An EIS is an unquoted company that is not on a stock exchange and is most likely managed by a venture capital firm. These firms manage the investment objectives to protect investors and maximize investment returns. A good firm will have been involved in venture capital investing for a number of years and be able to provide a solid track record of protecting principle and securing returns. Firms operate their EISes differently, some offering investments into single companies while others operate EIS funds in which you could invest into a fund of multiple companies, therefore diversifying your risk.

The benefit of tax protection that EISes offer has resulted in an increased demand among wealthier investors, with EIS being utilized as a strategic tool within their portfolios. The UK government increased tax relief from 20% to 30% and the annual investment amount has been increased from £500,000 to £1,000,000. With the added benefit that the investment is exempt from capital gains tax and inheritance tax, EIS is increasingly the perfect vehicle for certain investors. More and more EISes have become essential within many investment portfolios as an integral tax relief tactic.

Seed Enterprise Investment Schemes

Not quite as large as the EIS, the SEIS provides a similar benefit and experience. The main difference being the investment amount allowed annually which currently stands at a maximum of £100,000, but offers an unprecedented 50% tax relief on the investment’s gains and value. However this 50% is only applicable if the SEIS continues to comply with the SEIS rules and providing the investment is left for a minimum of three years. After three years the investor can sell their stake, incurring no capital gains tax against profit realized. Furthermore, loss relief applies to any losses incurred.

As of 2014, the upfront tax relief for the highest tax bracket investors equates to a 64% tax break and, when combined with a loss relief tax break of a further potential of 22.5%, equates to a total of 86.5% tax relief. The downside tax protection of almost 90% is unprecedented amongst all other investment vehicles and provides significant tactical value to certain investors.

Careful Consideration

As with any investment decision, you need to be careful in your consideration when choosing to use EIS or SEIS for your portfolio. You should be considering these tax relief options in your portfolio after you have exhausted other forms of tax mitigation. The first two that should be utilized are your pension and annual Individual Savings Account (ISA) allowance. These primary tax savings vehicles provide secure investment vehicles; ISAs offer amazing investment flexibility not available through EIS or SEIS. Another option includes VCTs – Venture Capital Trusts – which have similar strategic benefits to EIS or SEIS but are limited to £200,000 per year.

In deciding on further tax mitigation, you need to consider the portion of your portfolio that these tactical investments would make up. Conventional wisdom dictates that you should not put more than 20% of your holdings into risky opportunities, but that 20% could realistically be surpassed with correct use of the right investment vehicles. If you are hedging your portfolio against a known event that will increase your capital gains taxes or inheritance taxes, EIS and SEIS would be a viable way to mitigate those taxes in a given year. In this way you could max out your contributions to these two tactical strategies in order to mitigate the known tax implications from another portion of your investment portfolio. It is these considerations that you should be aware of before deciding on a specific EIS or SEIS company.

Another concern that you should be aware of is the fact that EISes and SEISes are essentially “locked-in” products. You need to be able to leave the investments locked in for a period of at least three years (and in some cases longer) in order to access the tax relief benefits – managers will generally look for an exit in or around year 4, but an exit could realistically take longer and is subject to market conditions. In this way, many EIS and SEIS companies are illiquid and the secondary market for selling EIS/SEIS shares is therefore small. Taking the long view on these investments should be a natural consideration.

Choosing the Right EIS/SEIS

When deciding on the right company to invest for the purpose of tax mitigation, not all EIS/SEIS companies are the same. Choosing a company should not be done on impulse and requires effective due diligence to ensure that their investment philosophy is in line with your own. At the time of consideration, ask all the same questions of the company as you would when investing in any stock. By ensuring the company has a solid and proven track record of investments, open reporting functions that promote transparency and an investment philosophy you agree with, you can feel comfortable with your investment.

By considering an EIS/SEIS investment you are considering an investment option that has a real potential for investment loss. It can be the right option for those looking for a high risk option with an effective tax mitigation strategy as a small portion of their overall portfolio. EIS and SEIS investments can also be an excellent way for investors to dabble in venture capital investing without having to put up too much capital.

For more information please visit: https://www.gov.uk/government/publications/the-enterprise-investment-scheme-introduction

https://www.gov.uk/seed-enterprise-investment-scheme-background

Why Are Metals Good Conductors?

Different metals are often employed for various applications because they are known for being good conductors of both heat and electricity. All of the appliances that we find in our homes and workplaces, such as kettles and computers, use metal for one reason or another. But why are they such good conductors? How does it all work?

Generally, atoms will tightly hold onto their electrons, not allowing them to move very much (if at all). In metal, however, atoms hold onto their electrons more loosely, allowing some of them to even be free moving. This is because the electrons form a metallic bond of sorts with each other, creating a moving sea vibrating electrons. They drift aimlessly through the metal, helping to give it it’s various properties, including strength.

Electrical conductivity

This term refers to a metal’s ability to conduct an electrical current, such as in a refrigerator or television. The outer electrons of the atoms are loosely bonded and are free to move through the material. When an electrical current is applied to a metal, it causes the free moving electrons to flow, which allows the current to pass through and be moved on.

Thermal conductivity

This term, on the other hand, refers to a metal’s ability to conduct heat, such as in a toaster or heater. The electrons nearest the heat source begin to warm up, causing them to vibrate fairly fast. In colliding with the cooler, slower moving electrons around them, the hot electrons transmit this heat energy on. Metal is such a good conductor of heat because their electrons are packed so closely together, allowing the vibrations to be passed on very quickly.

Metals are quite often cool to the touch, causing many people to believe that they are actually good conductors of cold, not heat. This, however, is a common misconception – metals are able to quickly absorb heat from their surfaces, including from human skin. It is this loss of heat that causes metal surfaces to feel cold underneath our hands.

When people ask why metals are good conductors of both heat and electricity, the short answer is because of the way their electrons are able to freely move around. To fully get into the specifics of how each element is effectively conducted by different alloys, you would probably have to attend physics classes in order to understand the processes. Having a basic understanding, however, should be enough to show why metal is so useful.

Rohan Online Half Elf Ranger Class Build (PvP-PvE)

Half Elf Ranger Class Build (PvP/PvE)

The half elf ranger build in my opinion is the king of solo. This build is designed to bombard enemies from an insane attack range. The Ranger has a decent critical rate and some great rooting spells.

Stat Build: Your leveling points should be distributed as 1VIT – 3 DEX or This ranger build has no psyche so you are gonna rely on pots for your mana so you must be careful not to deplete it too soon.. You will have some decent HP with 130 points of VIT just in case someone might be lucky enough to get close to you.

This build has a large distribution of DEX to boost your ranged attack quite a bit. You will have great damage and a long range to do it in.

PvE: The easiest class to solo with by far and one of the fasted classes to level also. Most mobs won’t even get close enough to you to do any damage since you have long attack range and have the ability to slow your target mobility speed. Only ranged mobs will have that chance to get a few shots off before they hit the ground bleeding. You only really need to cast one skill per mob before they die since you will be doing some nasty normal ranged attack damage. You will also have an easy time when in a high level mob grind party. You don’t really have to move around much just let tankers tank and do a little pulling here and there.

PvP: The ranger class i one of the few classes that do well against ranged and melee based classes in PvP. You take down magic type classes pretty easily and melee classes can be stunned and slowed down to a crawl before they can get to you. You can do some powerful critical damage at a long range using Critical Shot. The ranger has some great PvP skill at their disposal including Luxury Shot and Premium Shot leaving enemies with missed parts of their HP bar lol. A nice spell to initiate your PvP sequence is Speed Wind which boosts your attack speed to an insane rate that lasts 10 seconds. When a melee class finally does get to you, hit them with Brandish Kick which has a 70% chance to stun target for 9 seconds. You can kite away from enemies easily since you have increased mobility skills.

Conclusion: This ranger build is balanced and you will have extended use of your skills and will be able to solo and pvp well. You don’t have a whole lot of mana so be careful. Remember that range is your advantage, don’t let melee get to close or they will rip you up 🙂

Stat Point Build at Level 99

The recommended spell upgrades:

(Half Elf Archer Tree)

1. Darkness-Level 5: Increase dark dmg 100%, res50% 8% chance decrease target’s 30% atk spd for 7 sec.

2. Psychic Pierce-Level 1: 160% of normal dmg.

3. Long Shot-Level 5: Increase 50% of attacking range for 9 min.

4. Enchanted Arrow-Level 5: Increase arrow damage by 30 for 30 min.

5. Fainting Pierce-Level 5: 35% chance decrease target movement speed by 50% for 10 sec, last 18 min.

6. Bleeding Shot-Level 1: Effect ‘bleed’ dealt 70% of normal dmg every 3 seconds, occur 5 times.

7. Nimble-Level 5: Increase dex by 30%, lasts 30 min.

8. Brandish Kick-Level 5: 70% chance stun the target that last 9 second.

9. Feeble Arrow-Level 1: Decrease target 3% of str last 30 seconds.

10. Fatal-Level 5: Critical dmg increases by dex * 3.0, last 15 min.

11. Sprint-Level 4: Increase movement speed by 80% in 27 seconds.

12. Evade-Level 1: Increase evasion rate by 10% last 18 min.

13. Piercing Root-Level 4: Normal attacks 130%, 50% chance hold the target in place for 5 second.

14. Double Strike-Level 1: Increase 20% of normal dmg, attack target twice.

The recommended spell upgrades:

(Half Elf RangerTree)

1. Crossbow Mastery-Level 5: Increase X-bow’s atk by 25%, last 30 min.

2. Open Eyes-Level 1: Instantly removes root status.

3. Trick-Level 1: Wouldn’t get attack by npc guard during gvg and during red-name period, last 5 min.

4. Detect-Level 1: Detect hidden target within the range of 10m, last 30 sec.

5. Dissapear-Level 1: 50% chance become hidden, last 30min. moving, atking or using item will expose.

6. Siege Shot-Level 5: Unable to move for 10 sec, mean while atk + 90%.

7. Murder Shot-Level 5: Increase atk dmg by murder count * 90.

8. Speed Wind-Level 5: Increase atk spd by 160%, last 10 sec.

9. Kael’s Arrow-Level 2: Create 100 bolts with dmg of 120.

10. Alacrity Blow-Level 5: Increase dex by 15%, last 30 min.

11. Strip Shot-evel 5: Ignore defense, increase dmg by 70%

12. Rank Shot-Level 1: Total damage = weapon’s rank * 50.

13. Critical Shot-Level 5: When hit the target, 90% chance occur critical hit.

14. Premium Shot-Level 1: Increases weapon’s atk by 200%.

15. Magic Guard-Level 1: Do not affect by magics for 10 seconds.

16. Luxury Shot-Level 1: Increases weapon’s atk by 200%.

17. Winged Foot-Level 5: 18 mp per sec, party member increase movement spd by 100%.

Novel Ideas – Six Unique Ways to Introduce a New Novel to Your Class

There is nothing more exciting than introducing students to a great piece of literature. Conversely, there is nothing more disappointing than students’ lack of enthusiasm about a book you truly love. Unfortunately, your fervor about a novel does not always translate into cheers and applause on the part of your students. Reading a novel requires a lot of investment. Even novels with high-action plots take a while to build momentum. How can you quickly bolster students’ interest at the start of a new book? Below are six sure-fire ways to get your class excited about a new novel.

PLOT PIECES. Divide students into groups. Assign each group one page from a different part of the novel. After they have read the page, ask students to compose a paragraph that outlines the plot of the novel. To do this, students will have to use context clues gleaned from their excerpt. Ask students to elect a representative from each group to present their plot summaries. Compare plot summaries and revisit these summaries at the end of the novel. Asking students to conjecture the plot of the novel will pique their interest in the book and help them extract information from context clues.

FIRST IMPRESSIONS. Ask students to read the first page of text silently. Next, ask for a volunteer to read the first page aloud. Then, ask students to write down as many things as possible that they have learned from the first page. Next, ask students to write down three questions they have based on their reading of the first page. This activity will help students read context clues and it will teach them to site text evidence when making generalizations about a novel.

COVER UP. Read a summary of the novel from the back cover, from the inside flaps, or from an Internet source. If you prefer to leave the novel a mystery, read an excerpt from a select part of the book. You can also print out this summary or excerpt so that students can refer to it. Next, ask students to design a cover based on information gleaned from the summary or excerpt. Allow students to explain their cover design. If you are reading a novel that is divided into parts, have students design a cover at the end of each part of the novel. Revisit cover designs at the completion of the novel and ask students to write a paragraph discussing their various understandings of the novel. This activity will help students chart the ways their understanding developed throughout the reading.

FRONT MATTER. Though students read novels throughout their schooling, very few are taught the importance of the title, copyright, and acknowledgments. The pages that contain this information are called the “front matter.” In small groups, ask students to explore the front matter of the novel. Instruct students to list 10 things they learned from these pages. In a more open-ended version of this activity, you can ask students to answer the following questions: What does the front matter tell you about what will and what will not be in this novel? What does the front matter tell you about the novel’s plot and themes? A good explanation of front matter can be found at Vox Clarus Press’ website. Just search “Vox Clarus Front Matter.”

LAST LINES. Instruct students to read the last sentence or the last paragraph of the novel silently. Next, ask someone to read these last lines aloud. From these last lines, ask students to draw a comic strip that shows the plot of the novel. Each frame of the comic strip should contain narrative and dialogue. The last frame of the comic strip should be based on information gleaned from the novel’s last lines. Thinking about the ending of the novel will whet students’ appetite for the actual plot.

BEGINNING AND ENDING. Ask students to read both the first sentence and the last sentence of the novel. Next, ask the students to construct a poem, paragraph, or short story using the first and last sentences of the novel as the first and last sentences for their writing. Your students’ writing should summarize what they think will be the plot of the novel. Revisit these summaries at the middle and at the end of the reading. In a reflective paragraph, ask students to compare their initial impressions to the novel’s actual plot and themes.

When beginning a new novel, consider using one of the above activities in your classroom. These activities provide a new lens through which to view your new novel. Starting the study of your novel in a unique and unpredictable way will bolster your students’ interest and engagement.

Benefits of Using a VoIP Telephone

Most of you would have heard about VoIP and for those who haven’t it’s never too late. VoIP stands for Voice over Internet Protocol and is revolutionizing the telephone industry by combining the benefits of traditional analog telephones and modern day internet. VoIP telephone works by converting the analog signals into digital signal so that you get superb audio quality.

Companies now offer VoIP services all over the world at very reasonable rates. Although, it is very difficult to make people forget about traditional landline phones and make them use VoIP, but it comes with a full bag of benefits which make it very difficult to ignore. Slowly but steadily VoIP is catching up popularity among masses and classes both. Some of the main benefits of VoIP telephone over traditional phones are:

• The call rate for long distance calls is very less in VoIP thus making the landline phones not so useful.

• As compared to the pulse rate service provided by landline phone companies most VoIP service providers offer packages wherein you get unlimited talk time at a flat rate. So you don’t have to keep track of the watch while making an international call. This facility is very useful if your family lives in some other country and you are in other country for some purpose. You can interact with your family and friends for as long as you want.

• Use of VoIP for conference calling and multi way calling is relatively easy. Unlike traditional phones which only offer 3 way calling you can add as many people to your conversation as you want in VoIP. Also the facility of conference calling makes it a perfect tool for holding telephonic seminars, conferences and telephonic interviews.

• Most VoIP service providers have the option of combined plans wherein you pay for your broadband usage and VoIP usage together. Hence you can save good amount of money by using VoIP over traditional phones.

• Use of VoIP telephone will substantially cut down on your telephone bills. Even the most costly VoIP provider is very cheap when compared with traditional landline companies. Plus the quality you get is unmatchable as it is completely digital and is very likely to be affected by additional factors unlike traditional landline which used wires for   transmission  so if anything happens to the wire your service gets hampered.

• Many features for which you pay extra on your landline come free with VoIP telephone.

These along with other features make VoIP technology very hard to resist and a good alternative for traditional landline phones.

Dog Health Concerns and Common Diseases

Dogs are truly man’s best friend. These loyal, loving, protective and playful creatures have served beside man for thousands of years with an undying and relentless devotion. It’s hard to repay such a service of love, commitment and duty. When put to the basics, we provide our dogs with shelter, healthy nutrition, exercise and friendship. However, a dog’s health and well-being sometimes goes beyond the basics, requiring an owner with an eye for disease risks and proper veterinary care.

If you’re a dog owner, you should make sure your animal sees a qualified veterinarian on a regular basis. The range of diseases, parasites and genetic conditions that dogs can succumb to is vast, so it’s important to keep up your pet’s vaccines, stick to regular check-ups and also know what to look for.

Keep reading to learn about some of the most dangerous and fatal diseases that can afflict your beloved pet along with effective prevention methods.

1. Canine Distemper Virus (CDV)

CDV attacks the respiratory, gastrointestinal and central nervous systems. The disease is contracted through contact with other infected dogs and can be fatal to both young and old dogs. Symptoms include vomiting, diarrhea, fever, shivering, redness around the eyes, loss of appetite, weight loss, seizures, thickened footpads, cough and a discharge from the nose. There is no specific treatment, but sometimes antibiotics can be effective. However, a vaccine exists and should always be administered.

2. Canine Adenovirus or Infectious Canine Hepatitis (ICH)

Infectious Canine Hepatitis (ICH) is an acute liver disease, and highly contagious. The virus is transmitted through bodily fluids like urine, eye or nose secretions. Young and old dogs can be affected by ICH, but puppies are at a higher risk. Symptoms include fever, loss of appetite, vomiting, jaundice and corneal edema, though a blood test is needed to make a final diagnosis. Many dogs recover, but it’s best to prevent ICH through a simple vaccination.

3. Para Influenza or Tracheobronchitis (aka Kennel Cough)

The common name for Tracheobronchitis is Kennel Cough because of its propensity for spreading in close quarters, such as in a boarding kennel. It’s highly contagious and attacks the dog’s upper respiratory system. Like bronchitis in humans, the symptoms are coughing, snorting, hacking and sometimes fever. Kennel Cough can be treated with antibiotics or prevented through vaccination.

4. Rabies

Rabies is not just a dog disease; it will affect all mammals that are not vaccinated against the disease. Rabies directly attacks the brain and the prognosis is often deadly. This common disease can be easily prevented through vaccination. In many states, vaccination for domestic pets is absolutely mandatory.

In short, keep your dog healthy by making sure it gets regular vaccinations. Almost all diseases are preventable.

The Top 5 Key Benefits of Purchasing and Owning Investment Real Estate

So… You may ask yourself, why should you buy or invest in real estate in the First Place? Because it’s the IDEAL investment! Let’s take a moment to address the reasons why people should have investment real estate in the first place. The easiest answer is a well-known acronym that addresses the key benefits for all investment real estate. Put simply, Investment Real Estate is an IDEAL investment. The IDEAL stands for:

• I – Income
• D – Depreciation
• E – Expenses
• A – Appreciation
• L – Leverage

Real estate is the IDEAL investment compared to all others. I’ll explain each benefit in depth.

The “I” in IDEAL stands for Income. (a.k.a. positive cash flow) Does it even generate income? Your investment property should be generating income from rents received each month. Of course, there will be months where you may experience a vacancy, but for the most part your investment will be producing an income. Be careful because many times beginning investors exaggerate their assumptions and don’t take into account all potential costs. The investor should know going into the purchase that the property will COST money each month (otherwise known as negative cash flow). This scenario, although not ideal, may be OK, only in specific instances that we will discuss later. It boils down to the risk tolerance and ability for the owner to fund and pay for a negative producing asset. In the boom years of real estate, prices were sky high and the rents didn’t increase proportionately with many residential real estate investment properties. Many naïve investors purchased properties with the assumption that the appreciation in prices would more than compensate for the fact that the high balance mortgage would be a significant negative impact on the funds each month. Be aware of this and do your best to forecast a positive cash flow scenario, so that you can actually realize the INCOME part of the IDEAL equation.

Often times, it may require a higher down payment (therefore lesser amount being mortgaged) so that your cash flow is acceptable each month. Ideally, you eventually pay off the mortgage so there is no question that cash flow will be coming in each month, and substantially so. This ought to be a vital component to one’s retirement plan. Do this a few times and you won’t have to worry about money later on down the road, which is the main goal as well as the reward for taking the risk in purchasing investment property in the first place.

The “D” in IDEAL Stands for Depreciation. With investment real estate, you are able to utilize its depreciation for your own tax benefit. What is depreciation anyway? It’s a non-cost accounting method to take into account the overall financial burden incurred through real estate investment. Look at this another way, when you buy a brand new car, the minute you drive off the lot, that car has depreciated in value. When it comes to your investment real estate property, the IRS allows you to deduct this amount yearly against your taxes. Please note: I am not a tax professional, so this is not meant to be a lesson in taxation policy or to be construed as tax advice.

With that said, the depreciation of a real estate investment property is determined by the overall value of the structure of the property and the length of time (recovery period based on the property type-either residential or commercial). If you have ever gotten a property tax bill, they usually break your property’s assessed value into two categories: one for the value of the land, and the other for the value of the structure. Both of these values added up equals your total “basis” for property taxation. When it comes to depreciation, you can deduct against your taxes on the original base value of the structure only; the IRS doesn’t allow you to depreciate land value (because land is typically only APPRECIATING). Just like your new car driving off the lot, it’s the structure on the property that is getting less and less valuable every year as its effective age gets older and older. And you can use this to your tax advantage.

The best example of the benefit regarding this concept is through depreciation, you can actually turn a property that creates a positive cash flow into one that shows a loss (on paper) when dealing with taxes and the IRS. And by doing so, that (paper) loss is deductible against your income for tax purposes. Therefore, it’s a great benefit for people that are specifically looking for a “tax-shelter” of sorts for their real estate investments.

For example, and without getting too technical, assume that you are able to depreciate $15,000 a year from a $500,000 residential investment property that you own. Let’s say that you are cash-flowing $1,000 a month (meaning that after all expenses, you are net-positive $1000 each month), so you have $12,000 total annual income for the year from this property’s rental income. Although you took in $12,000, you can show through your accountancy with the depreciation of the investment real estate that you actually lost $3,000 on paper, which is used against any income taxes that you may owe. From the standpoint of IRS, this property realized a loss of $3,000 after the “expense” of the $15,000 depreciation amount was taken into account. Not only are there no taxes due on that rental income, you can utilize the paper loss of $3,000 against your other regular taxable income from your day-job. Investment property at higher price points will have proportionally higher tax-shelter qualities. Investors use this to their benefit in being able to deduct as much against their taxable amount owed each year through the benefit of depreciation with their underlying real estate investment.

Although this is a vastly important benefit to owning investment real estate, the subject is not well understood. Because depreciation is a somewhat complicated tax subject, the above explanation was meant to be cursory in nature. When it comes to issues involving taxes and depreciation, make sure you have a tax professional that can advise you appropriately so you know where you stand.

The “E” in IDEAL is for Expenses – Generally, all expenses incurred relating to the property are deductible when it comes to your investment property. The cost for utilities, the cost for insurance, the mortgage, and the interest and property taxes you pay. If you use a property manager or if you’re repairing or improving the property itself, all of this is deductible. Real estate investment comes with a lot of expenses, duties, and responsibilities to ensure the investment property itself performs to its highest capability. Because of this, contemporary tax law generally allows that all of these related expenses are deductible to the benefit of the investment real estate landowner. If you were to ever take a loss, or purposefully took a loss on a business investment or investment property, that loss (expense) can carry over for multiple years against your income taxes. For some people, this is an aggressive and technical strategy. Yet it’s another potential benefit of investment real estate.

The “A” in IDEAL is for Appreciation – Appreciation means the growth of value of the underlying investment. It’s one of the main reasons that we invest in the first place, and it’s a powerful way to grow your net worth. Many homes in the city of San Francisco are several million dollars in today’s market, but back in the 1960s, the same property was worth about the cost of the car you are currently driving (probably even less!). Throughout the years, the area became more popular and the demand that ensued caused the real estate prices in the city to grow exponentially compared to where they were a few decades ago. People that were lucky enough to recognize this, or who were just in the right place at the right time and continued to live in their home have realized an investment return in the 1000’s of percent. Now that’s what appreciation is all about. What other investment can make you this kind of return without drastically increased risk? The best part about investment real estate is that someone is paying you to live in your property, paying off your mortgage, and creating an income (positive cash flow) to you each month along the way throughout your course of ownership.

The “L” in IDEAL stands for Leverage – A lot of people refer to this as “OPM” (other people’s money). This is when you are using a small amount of your money to control a much more expensive asset. You are essentially leveraging your down payment and gaining control of an asset that you would normally not be able to purchase without the loan itself. Leverage is much more acceptable in the real estate world and inherently less risky than leverage in the stock world (where this is done through means of options or buying “on Margin”). Leverage is common in real estate. Otherwise, people would only buy property when they had 100% of the cash to do so. Over a third of all purchase transactions are all-cash transactions as our recovery continues. Still, about 2/3 of all purchases are done with some level of financing, so the majority of buyers in the market enjoy the power that leverage can offer when it comes to investment real estate.

For example, if a real estate investor was to buy a house that costs $100,000 with 10% down payment, they are leveraging the remaining 90% through the use of the associated mortgage. Let’s say the local market improves by 20% over the next year, and therefore the actual property is now worth $120,000. When it comes to leverage, from the standpoint of this property, its value increased by 20%. But compared to the investor’s actual down payment (the “skin in the game”) of $10,000- this increase in property value of 20% really means the investor doubled their return on the investment actually made-also known as the “cash on cash” return. In this case, that is 200%-because the $10,000 is now responsible and entitled to a $20,000 increase in overall value and the overall potential profit.

Although leverage is considered a benefit, like everything else, there can always be too much of a good thing. In 2007, when the real estate market took a turn for the worst, many investors were over-leveraged and fared the worst. They could not weather the storm of a correcting economy. Exercising caution with every investment made will help to ensure that you can purchase, retain, pay-off debt, and grow your wealth from the investment decisions made as opposed to being at the mercy and whim of the overall market fluctuations. Surely there will be future booms and busts as the past would dictate as we continue to move forward. More planning and preparing while building net worth will help prevent getting bruised and battered by the side effects of whatever market we find ourselves in.

Many people think that investment real estate is only about cash flow and appreciation, but it’s so much more than that. As mentioned above, you can realize several benefits through each real estate investment property you purchase. The challenge is to maximize the benefits through every investment.

Furthermore, the IDEAL acronym is not just a reminder of the benefits of investment real estate; it’s also here to serve as a guide for every investment property you will consider purchasing in the future. Any property you purchase should conform to all of the letters that represent the IDEAL acronym. The underlying property should have a good reason for not fitting all the guidelines. And in almost every case, if there is an investment you are considering that doesn’t hit all the guidelines, by most accounts you should probably PASS on it!

Take for example a story of my own, regarding a property that I purchased early on in my real estate career. To this day, it’s the biggest investment mistake that I’ve made, and it’s precisely because I didn’t follow the IDEAL guidelines that you are reading and learning about now. I was naïve and my experience was not yet fully developed. The property I purchased was a vacant lot in a gated community development. The property already had an HOA (a monthly maintenance fee) because of the nice amenity facilities that were built for it, and in anticipation of would-be-built homes. There were high expectations for the future appreciation potential-but then the market turned for the worse as we headed into the great recession that lasted from 2007-2012. Can you see what parts of the IDEAL guidelines I missed on completely?

Let’s start with “I”. The vacant lot made no income! Sometimes this can be acceptable, if the deal is something that cannot be missed. But for the most part this deal was nothing special. In all honesty, I’ve considered selling the trees that are currently on the vacant lot to the local wood mill for some actual income, or putting up a camping spot ad on the local Craigslist; but unfortunately the lumber isn’t worth enough and there are better spots to camp! My expectations and desire for price appreciation blocked the rational and logical questions that needed to be asked. So, when it came to the income aspect of the IDEAL guidelines for a real estate investment, I paid no attention to it. And I paid the price for my hubris. Furthermore, this investment failed to realize the benefit of depreciation as you cannot depreciate land! So, we are zero for two so far, with the IDEAL guideline to real estate investing. All I can do is hope the land appreciates to a point where it can be sold one day. Let’s call it an expensive learning lesson. You too will have these “learning lessons”; just try to have as few of them as possible and you will be better off.

When it comes to making the most of your real estate investments, ALWAYS keep the IDEAL guideline in mind to make certain you are making a good decision and a solid investment.

Wide Area Network (WAN)

Types and Characteristics of WANs

What is a WAN?

There are two prevailing definitions of a Wide Area Network (WAN). The book definition of a WAN is a network that spans large geographical locations, usually to interconnect multiple Local Area Networks (LANs). The practical definition of a WAN is a network that traverses a public network or commercial carrier, using one of several WAN technologies

What are its Main Components?

The main components for a WAN are routers, switches and modems. These components are described below in the hardware section.

CPE – Devices on the subscriber premises are called customer premises equipment (CPE).

The subscriber owns the CPE or leases the CPE from the service provider. A copper or fiber cable connects the CPE to the service provider’s nearest exchange or central office. This cabling is often called the local loop, or “last-mile”.

DTE/DCE – Devices that put data on the local loop are called data circuit-terminating equipment, or data communications equipment (DCE). The customer devices that pass the data to the DCE are called data terminal equipment (DTE). The DCE primarily provides an interface for the DTE into the communication link on the WAN cloud.

Hardware

In a WAN you will need various types of hardware components for it to function. The typical items of hardware that you will need in a WAN are:

Router – An electronic device that connects a local area network (LAN) to a wide area network (WAN) and handles the task of routing messages between the two networks. Operates at layer 3, and makes decisions using IP addresses.

Switch – A switch is a network device that selects a path or circuit for sending a unit of data to its next destination. Operates at layer 2, and uses MAC addresses to send data to correct destination.

Modem – Short for modulator/demodulator, a modem enables a computer to communicate with other computers over telephone lines. Operates at layer 1, where signals are converted from digital to analogue and vice versa for transmission and receiving.

Wan Standards

WANs operate within the OSI model using layer 1 and layer 2 levels. The data link layer and the physical layer. The physical layer protocols describe how to provide electrical, mechanical and functional connections to the services provided by the ISP. The data link layer defines how data is encapsulated for transmission to remote sites.

Encapsulation

Encapsulation is the wrapping of data in a particular protocol header. Remember that WANs operate at the physical layer and the data link layer of the osi model and that higher layer protocols such as IP are encapsulated when sent across the WAN link. Serial interfaces support a wide range of WAN encapsulation types, which must be manually specified. These types include SDLC, PPP, Frame delay etc. Regardless of WAN encapsulation used it must be identical on both sides of the point to point link.

Packet and Circuit Switching

Circuit switching and packet switching are both used in high-capacity networks.

The majority of switched networks today get data across the network

through packet switching.

Circuit-switching is more reliable than packet-switching. Circuit switching is old and expensive, packet switching is more modern.

General Routing Issues

What is a Routing Protocol?

A routing protocol is a protocol that specifies how routers communicate and exchange information on a network. Each router has prior knowledge of its immediate neighbours and knows the structure of the network topology. The routers know this because the routing protocol shares this information.

Protocol

RIP (Routing Information Protocol) was one of the most commonly uses protocols on internal networks. Routers use RIP to dynamically adapt changes to the network connections and communicate information about which networks routers can reach and the distance between them. RIP is sometimes said to stand for Rest in Pieces in reference to the reputation that RIP has for breaking unexpectedly and rendering a network unable to function.

Routing Algorithms

Distance Vector

This type of routing protocol requires that each router simply inform its neighbours of its routing table. The distance vector protocol is also known as the bellman-ford algorithm.

Link State

This type of routing protocol requires that each router maintain a partial map of the network. The link state algorithm is also know as Dijkstra’s algorithm.

IGRP

IGRP is a type of distance vector routing protocol invented by cisco used to exchange routing data in a autonomous system. Distance vector protocols measure distances and compare routes. Routers that use distance vector must send all or a portion of their routing table in a routing update message at regular intervals to each neighbour router.

Addressing and Routing

What does routing mean?

Routing is the process of deciding how to move packets from one network to another.

The directions also known as routes can be learned by a router using a routing protocol then the information is passed from router to router along the route of the destination.

IP Address’s

Every machine connected to the internet is assigned an IP address. An example of an IP address would be 192.168.0.1. IP addresses are displayed in decimal format to make it easier for humans to understand but computers communicate in binary form. The four numbers that separate an IP address are called Octets. Each position consists of eight bits. When added to together you get 32 bit address. The purpose of each octet in an IP address is to create classes of IP addresses that can be assigned within a network. There are three main classes that we deal with Class A, B and C. The octets of an IP address are split into two parts Network and Host. In a class A address the first octet is the network portion, this determines which network the computer belongs to, the last octets of the address are the hosts that belong to the network.

Sub netting

Sub netting allows you to create multiple networks within a class A, B or C address. The subnet address is the address used by your LAN. In a Class C network address you would have a subnet mask of 255.255.255.0. A subnet mask identifies which portion is network and which is host. For example 192.168.6.15 the first octet three octets are the Network address and the last octet being the host(Workstation). It is important to subnet a network because gateways need to forward packets to other LANS. By giving each NIC on the gateway an IP address and a Subnet mask it allows the gateways to route packets from LAN to LAN. Once the packet arrives at its destination, the gateway then uses the bits of the subnet portion of the IP address to decide which LAN to send the packets.

Circuit Switched Leased Lines

A circuit switched network is one that establishes a dedicated circuit (or channel) between nodes and terminals before the users may communicate. Here are some terminologies associated with a Circuit switched network.

Frame relay is a telecommunication service designed for cost-efficient data transmission between local area networks (LANs)

Basic rate interference is a service used by small business for internet connectivity. An ISDN BRI provides two 64 Kbps digital channels to the user.

Primary rate interface (PRI) is a telecommunications standard for carrying voice and data transmissions between two locations

All data and voice channels are ISDN and operate at 64kbit/s

Packet Switching

http://www.raduniversity.com/networks/2004/PacketSwitching/main.htm – _Toc80455261

Packet switching refers to protocols in which messages are broken up into small packets before they are sent. Each packet is then transmitted over the Internet. At the destination the packets are reassembled into the original message. Packet switching main difference from Circuit Switching is that that the communication lines are not dedicated to passing messages from the source to the destination. In Packet Switching, different messages can use the same network resources within the same time period.

http://en.wikipedia.org/wiki/Asynchronous_Transfer_Mode

Asynchronous Transfer Mode (ATM) is a cell relay, packet switching network and protocolwhich encodes data into small fixed-sized cells.

ISDN is used to carry voice, data, video and images across a telephone network. ISDN stands for integrated services Digital Network. Isdn also provides users with a 128kbps bandwidth. This is done through frame relay. Frame relay complements and provides a service between ISDN, which offers bandwidth at 128 Kbps and Asynchronous Transfer Mode which operates in somewhat similar fashion to frame relay but at speeds from 155.520 Mbps or 622.080 Mbps. Frame relay is based on the older X.25 packet switching technology and is used to transmit analogue signals such as telephone conversations.

PSDN stands for packet switched data network and is a data communication network. Packet switched networks do not establish a physical communication signal like the public telephone does (circuit switched network) Packets are sent on a fixed length basis and assigned with a source and a destination address. The packets then rely on the routers to read the address and route the packets through the network.

Mobile and Broadband Services

Digital Subscriber line(DSL) is mainly used to bring high bandwidth connections to homes and small business’s over a copper wire telephone line. This is can only be achieved if you stay within the range of the telephone exchange. DSL offers download rates of up to 6mbps allowing continuous transmission of video, audio and 3D effects. DSL is set to replace ISDN and compete with the cable modem in providing multimedia to homes. DSL works by connecting your telephone line to the telephone office over copper wires that are twisted together.

Asymmetric Digital Subscribers Line is most commonly used for home users. It provides a high download speed but a lower upload speed. Using ADSL, up to 6.1 megabits per second of data can be sent downstream and up to 640 Kbps upstream.

http://en.wikipedia.org/wiki/Symmetric_Digital_Subscriber_Line

Symmetric Digital Subscriber Line is a digital subcriber line which runs over one pair of copper wires. The main difference between ADSL and SDSL is the difference in upload and download speeds. SDSL allows the same upstream data rate and downstream data rate as ADSL upstream can be very slow.

[http://searchnetworking.techtarget.com/sDefinition/0],,sid7_gci558545,00.html

HDSL High bit-rate Digital Subscriber Line, one of the earliest forms of DSL, is used for wideband digital transmission within a corporate site and between the telephone company and a customer. The main characteristic of HDSL is that provides equal bandwidth in both directions.

IDSL is a system in which data is transmitted at 128 Kbps on a regular copper telephone line from a user to a destination using digital transmission.

The Local Loop enables operators to connect directly to the consumer via copper local loops and then add their own equipment to offer broadband and other services. This process involves operators accessing local exchange buildings to connect to a network of copper lines which connect them to homes and businesses. BT is an Example of a Local Exchange. The local loop connecting the telephone exchange to most subscribers is capable of carrying frequencies well beyond the 3.4 kHz upper limit.

Benefits of using DSL

DSL can provide virtually instantaneous transmission of voice, data and video over ordinary copper phone lines. A DSL connection can eliminate delays when waiting to download information and graphics from the Internet. It provides users with a cost effective high speed Internet connection. Another benefit is that a DSL connection is always on-line (like a LAN connection) with no waiting time for dialling or connecting.

There are now more than 10 million broadband connections in the UK. By December 2005 there were 9.792 million broadband connections in the UK and the average broadband take up rate during the three months to December was more than 70,000 per week.