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Licenses that You Need to Become a Stock Broker

Do you aspire to be a stock broker? Then, you should know that there are various requirements that you need to complete before you can attain your dream.

Aside from completing certain trainings, you may want to know what licenses are necessary to becoming a stock broker.

Series 7 License

If you want to sell securities, give legal advice to clients, request and perform transactions, you need to get a Series 7 license. After passing the Series 7 license exam, you are now qualified to become a registered agent in the United States.

The Series 7 exam or also known as the General Securities Representative Examination is administered by the Financial Industry Regulatory Authority (FINRA).

The test is comprised of seven significant functions of registered agents: looking for business for the dealer, assessing customer intents and needs, counseling clients, supervising records and accounts of customers, clarifying the markets and related factors, performing client orders, and supervising portfolios of clients.

The test lasts for six hours and consists of 250 multiple choice questions. In order to pass the exam, the candidate must have at least 70% correct answers.

Series 6 License

Brokers and agents of mutual fund and investment firms must have a Series 6 license. This FINRA license test is composed of 100 multiple choice questions. The areas that the test assesses are: common and ideal stock, commercial and administration securities, taxation, accounts of customers, mutual funds, pensions, and changeable insurance products.

The test can be held at any selected testing centers in the country. Just like the Series 7 license exam, the applicant must have 70% correct answers to pass the exam. In order to take the test, an applicant must be sponsored by a company.

Series 63 License

A broker who wants to pursue a profession in stock brokerage or security trading must pass the Series 63 exam.

The test is administered by the FINRA as well, and is composed of 65 multiple choice questions that need to be finished in 75 minutes or less. In order to pass the exam, the applicant must have 72% correct answers.

Series 66 License

Those who have interest in pursuing a career in the finance industry must take a Series 66 exam. It is considered as a joint license. If an individual passes the Series 66 exam, it also means that they have also passed the Series 63 and 65 exams.

It is composed of 100 multiple choice questions. The applicant must have 71% correct answers in order to pass the exam. The areas tackled in the test are: Securities Registration, Securities Evaluation, Registration and Licensing for Agents, Rules and Regulations and Business Practices. This website’s homepage offers more information concerning a stock broker career and salary.

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What is Dividend Growth Investing?

What is dividend growth investing? It is an investment strategy that involves selecting the right companies that raise dividends regularly and allow your dividends to grow with them for an extended period of time, often exceeding 10 years. The most fundamental tool for dividend growth investing is earnings per share. When earnings per share grow, companies are able to increase their dividends sustainably. On the contrary, companies that grow their dividends over specific periods of time without experiencing corresponding growth in earnings per share will ultimately run out of the room to boost distributions. Such autopilot companies should be avoided. Therefore, investors should opt for companies that have provable annual increases in earnings per share and dividends.

Before investing on dividend growth stock, you should search for companies with evident catalysts for generating higher net income. The signs for better earnings include increased sales, increasing prices, expansion into new markets, streamlining of company operations, new mergers and acquisitions, and introduction of new products. For instance, the strong pricing power of top companies often allows them to pass on extra production, transportation and marketing costs to consumers while increasing their profit margins. This would result in increased earnings per share for investors in the company’s dividend growth stocks. Similarly, companies focused on innovation can introduce new and on-demand products into the market, resulting into more growth and better earnings per share. Moreover, acquisitions and mergers that result in synergies can cause increased overall net income and greater earnings per share.

Secondly, dividend growth investing requires proper strategies for market entry price, dividend reinvestment and diversification. For instance, if you have a tested strategy for setting the maximum entry price you can pay for a stock, you will act with more discipline and avoid being carried away. A good strategy is to avoid paying more than 20 times the earnings for a stock because overpaying results into small overall yields in the long run. Equally, dividend growth investing works well for those with a diverse range of securities. Focusing on one sector or two can put you into great trouble, but diversifying your investments will protect you against dividend cuts in some sectors. Likewise, investors should know that not all stocks are good and attractive for investment at all times. So, it is good strategy to monitor stock trends across a broad range of sectors and to reinvest your dividends on worthy stocks.

Dividends have a real potential in themselves, especially when they are allowed to grow and are reinvested over longer durations of time. However, when investing, you must always remember that only great businesses raise and pay dividends. So, do your research well and get the right dividend growth investing opportunities to help you realize your dreams.

Why Frugal and Cheap Are Two Totally Different Things

Most people do not realize this, but there is a big difference between being frugal and being cheap. They may not say it out loud, but almost everybody hates a cheap person. They are considered stingy with their money and rather, inconsiderate, to say the least. Unfortunately, frugal people, who happen to be a much better breed of person, get lumped in with the cheap folk. This is a gross misrepresentation and misconception. Here are several reasons Why Frugal and Cheap Are Two Totally Different Things.

The dictionary definition of both terms:

Frugal: Not wasteful; economical in use; prudent; use sparingly

Cheap: Miserly; stingy

Frugal people know the value of money and do their best to get the most out of what the have. These are the people who will be sure to find out if there are any savings, coupons of deals to be made before they buy anything. They know what they want are willing to sacrifice a part of their luxury/comfort to get it. Cheap people on the other hand, want the good things in life but would rather have someone else pay for it. The best way to explain this is to use an example.

Example: Wedding in Hawaii

If you held your wedding in Hawaii and invited both your frugal and cheap friend, this will be the distinct difference between the two.
Frugal friend: Your frugal friend will come. But he/she will not book a first class ticket. They will fly coach, or use their frequent flier miles to minimize on the flight charges. They will also stay at a reasonably priced hotel and get you a practical present. That being said, they will make the most of their time in Hawaii since they are already here anyway.

Cheap friend: Your cheap friend will probably think of all the expenses involved and then ask if you are flying people in. If you are not, they most likely will not come. And even if they do come, they will not bring a present and will complain the whole time about how expensive everything is, all the while living large and sticking everyone else with the bill or contributing the bare minimum.

Another major difference is that a frugal person looks at the long term value of things. They would rather spend $200 on a pair of shoes that will last them two years, while a cheap person would rather buy a $40 pair of shoe that will last them 6 months.

As you can see, there is a huge difference between frugal and cheap. Frugal is practical, while cheap is just……well, cheap!

Tips on Buying your First Home

Buying a home is one of the wisest investment decisions you’ll ever make. If you are planning on buying your first home, here are a few important tips that will guide you as you prepare to make one of the biggest decisions in your life.

Set a comfortable budget of how much you are willing to invest on the house. This doesn’t have to be an exact figure but rather a range. Do a credit check and check your banking accounts to ascertain whether you have enough money to make the down payment. Then, find an affordable mortgage lender to give you a home loan. Always check the rates to establish if they are affordable. If you can, opt to make a high down payment so as to lower the monthly payments.

Choose your preferred neighborhoods. Having three to five neighborhoods in mind could help as they will increase the chances of you finding what you are looking for. Find someone to help you find the right home. Using a real estate agent is always advisable as you can give them an overview of what you are looking for and once they find it, they can call you to come and view it.

Take enough time to shop. Shopping around will give you a clear picture of what’s available hence enable you choose the best. Seeking professional opinion in regards to the house you are about to buy is also worthwhile. Advice from friends and family can also be considered.

Choose a home that you can afford. There’s no use buying a home that will be taking up all your money at the end of each month. Educate yourself on the various costs to be paid. Examples of these include transfer fees and levies. Always have a professional come over and do a thorough home inspection before buying, especially if it’s a foreclosure home. This will enable you know the condition of the house.

Once you find the perfect house, make a reasonable offer. Since there are quite a number of people who may be interested in the same property, be practical. However, feel free to negotiate.

Finalize on the details. Once you find the ideal home, have your mortgage lender and real estate agent guide you towards finalizing on the paper work. On the same note, always read the contract before signing. By following these tips, you can rest assured that your finding, buying and moving into your first home will be easy, hassle free and rewarding.

How to Invest in REITs

With an ever rising middle class population coupled with compelling shortage in housing industry, there lies prime investment opportunities in the real estate industries that could rake in huge profits for investors over a relatively short period. This is through putting up and managing real estate properties. However, based on the sheer scale of operational activities that goes with real estates management, it remains prudent for investors to adopt prolific management strategies. This could prove to be an overwhelming undertaking. Real Estate Investment Trusts, well known as REITs, present a single best chance for such large scale investors to build a fixed income portfolio in real estate and other stocks that have a great potential for higher returns as well as lowered risks. As with any other business, however, knowing the basics on investing in REITs makes a great difference. Wondering on how to invest in REITs? Don’t worry. This guide shows you how.

The basics of investing in REITs that you should know

Basically, REITs allow investors across the financial divide access to capital and investment opportunities in real estate industry. Such are sold as securities and stocks in most of leading exchange markets. Such stocks are majorly investments in real estates; either through mortgage financing or properties buying. The one fact that makes REITs a prime investment opportunity is the special consideration appended to them during taxation. For reduced taxation, investors enjoy higher yields on invested capital. Still, they are highly liquid compared to most other mega investments.

Types of REITs to choose from

There are varied alternatives to choose from in REITs. These are:

Mortgage REITs

This is perhaps the more known of the three REITs options. They simply deal with investing and also acquiring ownership of mortgage properties. REITs in this sector advance loans to individuals with interests in real estates or those who wish to purchase already existing mortgages or any securities backed on mortgages. The yields in mortgage REITs comes from interest generated by mortgage loans.

Equity REITs

In these, the REITs invest directly in properties and thus earn incomes from the renting of such properties.

Public Equity REITs

These are a combination of the above two. Also known as Hybrid REITs based on the combined strategies of the equity and mortgage REITs.

How to invest in REITS

Upon choosing the type of REITs to invest in, go ahead and make a purchase of the most suiting stock. If you opt for publicly traded REITs, seek an experienced and established broker to buy the stock on your behalf. For non-traded REIT’s stocks, engage the services of a broker specializing in non-traded REIT shares. Other options include REIT mutual funds and REIT exchange-traded fund that are equally a potent investment.


Real Estate Investment Trusts offers you an opportunity to invest in high yielding industries while paying less tax to the government. Not only so, you can opt to own the property and subsequently earn from it. You can buy into mortgages backed properties and earn interests from such loans.