Today as I viewed a foreclosed house that gave off a weird vibe that had my instincts telling me to stay alert, I’m reminded that investing in foreclosed homes can be dangerous for reasons beyond financial.

Foreclosed homes are often targets for breaking and entering, squatters, and other such illegal activity. As such, you need to take precaution when viewing these properties.

Announce Yourself

Announcing yourself before you enter is apart of property viewing 101; There could be someone illegally living in the property, or there may simply be another person there inspecting the property. I always give a quick knock on the door right before I open up the property. Further, saying your name aloud and your reason for being at the property as you enter is also a great safety measure. Because on the flip side of this issue, if you were inside a foreclosed property and suddenly you heard movement or voices within the house and didn’t know another potential buyer had entered, you’d be expecting something much worse; It’s simply common courtesty to prevent an escalated misunderstanding.

Never touch exposed wiring

The majority of the time foreclosed homes have their electricity shut off, either by the power box or by the actual electricity provider. However you should never assume the electricity is off simply because the lights, air conditioning, fans, etc. are off. In some cases the electricity may be on, but because of prior visits from other interested parties/inspectors, only some parts of the house may have the electricity shut off. For this reason, if you ever see exposed wiring in a foreclosed home, always treat the wires like they are hot, and never ever touch them.

Carry Protection

A non lethal form of protection can go a long way in keeping you safe from potential attackers and lawsuits. I don’t recommend you carry anything that can inflict permanent or significant damage. A tazer or mace are more than sufficient to stop an average man, and are less sever than a knife or a firearm. Plus a firearm requires a license to carry.

Chances are you won’t run into any trouble in a foreclosed property or need to utilize these safety tips when you are there, but it’s only to your benefit to take no chances. So please be safe, view these properties with precaution.

For the majority of people with even the slightest degree of economic intelligence, the real estate bubble’s collapse was like being a beach lifeguard and seeing a massive tidal wave off in the distance. It was frightenly visible, you knew it would create massive chaos when it finally touched down, and there wasn’t a damn thing you could about it. And now that the speculation on whether subprime lending will affect the overall economy is now a reality, we are seeing many people come out with excuses and try to put the blame on one specific group or the other. The truth of the matter however is that we all are to blame, and Confessions of a Subprime Lender by Richard Bitner clearly shows us why.

The book Confessions of a Subprime Lender is written by Richard Bitner, the former president of Kellner Mortgage Investments who was wise enough to get out of the business before things began to implode in the subprime lending industry. The book covers a wide range of topics such as the history of subprime lending, how conflicts of interest in the lending industry came about, how subprime mortgages work, why the industry was fundamentally flawed, and how just about everyone contributed to the problem in their own ways.

The book gives many examples of the horrible lending practices that occurred on a daily basis, and does a great job of painting the entire picture of what led to the real estate explosion and implosion. Everyone from loan officers, to realtors, to arguably the Federal Reserve receive their justified criticism for fueling the real estate bubble in this book. It’s also kindly written in an easy to understand manner so that average joes who aren’t mortgage savvy can easily pick up and book and read through it without any problems.

Overall Confessions of a Subprime Lender is a great read for anyone and everyone. If you love economics, real estate, investing, or even history (because this is history in the making), you’ll enjoy this book. You can tell from the instant you open it that you’re getting an insider view of what went wrong from a very knowledgeable man with a conscious. I’m not claiming Richard Bitner is a saint, but sometimes the best information comes from the criminal with all of the inside information.

In times of uncertainty, when many fear the sky is falling and that there is no hope for recovery, the wise investors plant their seeds. The wise investors are not bothered that the seeds will not grow into anything for many years; This is expected and can be considered the price of admission for any good deal. This is because the wise investors fears not, for they know that when others are fearful, it is time to be greedy. When stability returns to the market, those who were fearful will turn into the greedy, and those who were once greedy will sell for large gains and return to fearfulness.

The famous investing philosophy to be fearful when others are greedy, and greedy when others are fearful comes from the king of wise investors, Warren Buffet. This philosophy is timelessly profound, can be applied to any form of investing, be it real estate, the stock market, etc., and is simple to understand.

When others are greedy, it commonly means a recession is soon to follow, or at the very least that a bubble exists. You should be putting into consideration all of the potential risks when you do investments in a time of greed. However when others are fearful, it usually means we are in a deep recession or soon near it. This is the time to be greedy, when prices are dropping like flies because people lose perception of value in the midst of all the chaos. During times of fearfulness is when all the bargains can be found, and where the seeds are planted.

Our economy will recover and collapse time and time again, that is for certain. What isn’t for certain is whether you will keep a clear head through it all and stay the wise investor.

It’s funny to me when I think back to the first day I opened an account with Ameritrade and bought my first shares of stock. I knew so little about investing, the stock market, and economics at the time. But I couldn’t care less; I was so enthralled by my fascination for the stock market that I ignored all rationale and dove head first into the stock market like a man into a sea of hungry great white sharks. This is the pathetically humorous story of my introduction to the stock market.

How it started…

It started in late 2005 when during a conversation with my girlfriend she mentioned that she owned some shares of Coca-Cola. I remember thinking it was interesting, but didn’t give it much thought and our conversation quickly turned to other subjects (because I’m a random topics kinda guy). After a short period of time though I began thinking about the stock market and it reminded me of an online video game I used to play that had an economy in it. And of course when I played that game I was incredibly diligent at having the best items and most gold, so I quickly learned the ins and outs of that video game’s economy. So with this in mind, I thought it would be amazing to see what it would be like if I applied that passion to the real economy and stock market.

So I went to the Ameritrade’s website and opened up a brokerage account with them and funded it with the bare minimum. I remember thinking how overwhelming everything was. I was switching between tabs and asking things like “What is a market order?”, “What is volume?”, “What should I buy?” as if I had any idea what I was doing. I played around with the web site for about fifteen minutes and somehow concluded that I was ready to buy my first shares.

Want a free a song? My first shares…

I chose the incredibly successful company known as Napster for my first stock purchase. I really can’t remember why I chose Napster; I never used their paid service, and never thought it was anything worthwhile. Nonetheless I felt like a proud owner, joking with my friends that “I own 0.000017% of Napster, want a free song?”. Of course I didn’t even own that small percentage, because I was doing my calculation based on the daily volume instead of the stock’s market capitalization (not understanding the difference).

I had bought about $800 worth of stock, and became incredibly excited when I saw the share price rise a few cents. I didn’t understand the concept of percentages and was only concerned with the immediate dollar value changes. I eventually went on to sell the stock for a gain of nine dollars.

The bottom line…

I can’t believe how naive I once was and how ridiculous my thought process used to be when it came to deciding what companies to invest in. I would sit and think “Which company will come out with the next iPod?” and then go out and invest in stocks like Nike for no real arguable reason. But I can’t say I regret this since it all got me started on my path to investing properly and investing successfully.

You can take some lessons from this story of my start into the stock market if you are a non-investor thinking about getting into it. If you want to dive head first into investing, trading, and the stock market, just remember there is an incredible amount of ideas, concepts, and terminology that you need to learn. In my story alone I didn’t understand

• Volume
• Order types
• Market Capitalization
• Percentages over Dollar values

And that’s all while not investing without any sort of plan or strategy. If I had to do it all again, I would’ve read all those stock market books before I started buying stock, not while I was already buying stock. The only good part of all of this is that I invested with a very small amount of money that I could afford to lose. So even if I lost every cent I wouldn’t be living out on the streets, and would atleast have gotten an education if I failed.

How did you get started?

How did you start out investing or trading in the stock market and what inspired you? I’d love to hear from everyone what got them started and what rookie mistakes they made. Don’t be shy, leave a comment and tell us your story! It can’t be any worse than me buying shares of Napster (I was being sarcastic earlier about it being an incredibly successful company if you didn’t notice).