I must warn you? What I am about to share here for free is what 揼urus?across the nation charge thousands of dollars for in weekend seminars. The 搒ecrets?revealed are going to seem pretty simple because quite frankly, there are no secrets. The methods used here have been done for centuries and there is no real reason to complicate them. Let抯 apply these principles to see how fast someone might become financially independent without betting the farm.

Realize that everybody has wildly different starting points and different financial goals. For this series of articles, we assume that an individual has access to at least $15,000 liquid capital (or home equity) to start, is at least breaking even with their current income versus expenses, and has decent credit to obtain financing. Note there yet?.... See the footnote below.

To start, what you need is to make your money grow while keeping your current income stream, and current expense level in place. I can抰 say this more plainly?.To change your current financial path, you have to us your money and your time to grow additional income streams that increase wealth. There is many ways to do this but we are going to use investing in real estate as an example.

Now for beginners, here is the really bad news厖 As an investor, you reap rewards by putting your money in HARMS WAY. You do everything in your power to minimize your risk but bottom line is that real investors make money by taking CONTROLLED risks. As investors get better, they learn how to make fantastic investment returns doing things that all their friends and relatives thing is crazy?. However, they know exactly what risks they are taking are why those risks are small in comparison to the potential rewards.

One reason people really like real estate investing is leverage; i.e, you can purchase an expensive property using 0-20% of your own money while financing the rest. So if you put 10% down for example, and then the property goes up by 20%, you have made a 200% return (ignoring expenses, taxes, etc. for simplicity). Of course this works in reverse?If the property drops by 20%, you have lost not only your original investment but have to come up with another 10% as well?. Ouch!

For someone beginning, here is what I would suggest: 1) Look for an opportunity that will return at least 150% in 2 yrs or less;

2) Be mentally and financially prepared if the investment does not work out;

3) Have VERY good reasons why you don抰 think you will lose money厖 You may not make as much as expected but you would rather not lose money at this stage.

4) Be patient. This single result should not either make or break you but it is crucial to a longer term plan.

In our Mastermind Group, we are bringing out a land project (see related article Land Investing that appears to meet these criterion (each investor has to decide for themselves). So let抯 say the purchase price is $150,000, with 10% down and another $3,500 in closing costs. With good credit, then the financing obtained would make the land payments for 2 years while waiting for growth.

Now let抯 say after you did your analysis, looked at what had happened in the past, looked at why you thought more and more people would want this property, etc., you decide that you think this property will average 20%/Yr escalation over the next 2 years. MORE IMPORTANTLY, you decide that barring a major meltdown in the market, you think there is little chance that you can抰 at least break even after 2 years.

So if you end up being right about the growth, then you might net a tidy $43,000 (before taxes) or so after everything is considered. After long term capital gains at 15% let抯 say, then you just picked up about $36,000 of the 搈arket抯 money? That is money that if you take a loss on the next investment will not be nearly as painful as if you lost your original money. When you combine this with your original investment amount, you now have around $55,000 of operating capital for step 2.

Realistically, you cannot predict how much you will make from the investment. When I invest, I try to establish in my mind what is reasonable. Frequently, I have been surprised to the positive and made much more than expected. Sometimes I have made less. The key being to put yourself in a low risk situation where you have a strong reason to believe the market will go in your favor.

To accomplish this first step, let抯 look at what you really had to do:

1) Had to be willing to put $$ in harm抯 way;

2) Had to educate yourself enough to evaluate the risk and the opportunity;

3) Had to find the opportunity or be in a position to have the opportunity presented to them;

4) Had to act.

I would like to comment on the education side. As a former professor, I have seen very smart people spend 1,000抯 of hours and 10,000抯 of thousands of dollars educating themselves to 揺arn a living? this is a great move in many cases. On the other side, I have seen very smart people who want investing to be a major source of income but will not spend any time or any money educating themselves.

To me, this is a recipe for disaster. By the time we finish this series, you will see that with a few simple steps, implemented over time, many people can easily produce more money than from their regular job. Furthermore, many people will put 100抯 of thousands of dollars at risk but know almost nothing about what they are doing. If you chose the path of making your investment dollars grow steadily with time, I hope this does not end up describing you.

** Footnote: If you are not yet at that level, here is what I suggest. First, read Michael Masterson抯 book called 揂utomatic Wealth? This is an excellent book on how to rapidly change your financial position while staying employed. Next, I would read Van Tharp抯 new book called 揝afe Paths To Financial Freedom? Van uses a very different thought process from many and so adds a great deal of rounding. Like anything else, you will not agree with everything written in these books but they provide some great thought processes. When you have some capital and are cash flow positive, them come back and revisit this article.

Chris Anderson is a leading authority on preconstruction real estate investing and has been referenced in many venues including the New York Times and USA Today. Free sign up at GetPreconstructionDeals.com to get continuing education and articles or visit his Investing Mastermind Group to get access to world class investing projects.

In addition to developing sound technical analysis skills, strong trading psychology coupled with well thought-out money and risk management are also vital key secrets for success when trading or investing in the market.

From real life experience and lessons in portfolio management learnt the very hard way, John Atkinson originally designed his series of three Money and Risk Management spreadsheets to help his own trading. Through the help of programmers Stephen Parsons and Peter Tamsett, he recently added several user friendly macros and has now made them available as simple to use and very affordable tools to help traders and investors plan and manage their portfolios.

They are designed to assist in the planning and developing of profitable portfolio growth, by putting structured money & risk management control in place and as a means of keeping simple and accurate records.

Many investors and traders spend less time planning the risk of individual trades and their overall portfolio for their wealth creation than they do planning their grocery shopping. Many do not plan, accurately track or review their progress at all.

Some think that spreading or 慸iversifying?their portfolio into several large positions in 'safe' blue chips is their way to address money & risk management. They do not realise that overloading in too many positions or too large a position can put their portfolio seriously at risk.

Without proper planning one may end up with a portfolio that is a disaster waiting to happen. We know. We've been there & we wouldn't want you to go through the sleepless nights and gut wrenching fear, financial and emotional loss that we and a few traders we know have experienced as a result.

A major reason why we lost our Sydney waterfront home in 2000 and more since was not developing or adhering to correct risk & money management rules - so our series of three portfolio tools has been created from our own personal very hard knock experience at a very real financial cost of literally hundreds of thousands of dollars and at a huge emotional cost.

We subsequently went looking for the information which we wish we抎 looked for, or had been advised of, prior. These tools are based on various 憌orld抯 best practice?principles and strategies taught by this newsletter, Daryl Guppy抯 books and by other trader authors such as Alan Hull, Louise Bedford, Dr Alexander Elder and Dr Van Tharp.

They consist of the:

?Atkinson Portfolio Planner ?- to plan your stock selection & overall sector & portfolio risk in advance

?Atkinson Trade Optimizer ?- which stock to buy when you have a few to choose from & funds only available for one?

?Atkinson Portfolio Manager ?- stop loss, targets, individual stock & combined portfolio equity curves, expectancy of closed trades and much more

Over the coming weeks we will discuss each of these tools in detail.

We start this week with the Atkinson Portfolio Planner ?

This tool is designed to help you plan your portfolio correctly so you can sleep at night, knowing you have a balanced portfolio and are not too exposed in any one trade, volatility grouping or sector.

Also, that you have planned the correct number and size of open positions to ensure that your total portfolio risk does not exceed your specified criteria.

This easy-to-use tool allows you to check your planned allocation of:

Mix of high, medium and low volatility shares

Mix of shares between sectors

Individual risk of each position as a % of your portfolio

Maximum % of your portfolio in any one position

Total risk of your combined portfolio

Once you have entered your requirements, the Atkinson Portfolio Planner ?will calculate the above essential factors and even flag red alerts if any of your planned or open positions exceed your personal risk profile.

This allows the user to ensure in the planning stages that your hard earned capital will be apportioned correctly to conform to risk levels selected by your own Trading Plan.

It is the responsibility of the user to research and select the criteria to be applied for his/her Trading Plan and as key input to the Portfolio Planner ?e.g. volatility and sector allocation, stop loss levels and % risk factors; and for the ultimate selection of which stock(s) to buy and the applicable position size(s).

Putting all or most of your available funds into one stock or sector; placing at risk a large % of one抯 portfolio in any one position or having too many open positions with an unacceptable total % of portfolio at risk are recipes for potential disaster.

Experience of other traders shows that it is also wise to diversify their capital in a chosen proportion between a range of high, medium and low volatility stocks to maximise annual growth of their portfolio.

Experienced traders and investors have varying rules for money and risk management.

The following are some typical examples from the literature:

1. In his books and this newsletter Daryl Guppy chooses 1/7 (14.3%) in high volatility (e.g. 憇peculatives?; 2/7 (28.6%) in medium volatility (e.g. 憁id caps? and 4/7 (57.1%) in low volatility (e.g. 慴lue chips?. Others may choose a maximum of 10% in high volatility. The final choice is the user抯 responsibility

2. For small portfolios, in his book Share Trading #, Daryl Guppy provides an example of building from $6k to $21k, by starting with $2k (i.e. 1/3rd) in high volatility and $4k (i.e. 2/3rd) in low volatility stocks; then splitting this back to 1/7; 2/7 and 4/7 when the portfolio has grown to $14k.

3. Maximum position size as a % of total portfolio: commonly 20-25% absolute max; some reduce to 15% or less for large portfolios or speculative stocks.

4. Maximum Equity Risk: No more than 2% of portfolio to be placed at risk in any one trade ?some choose to reduce this 1 % or 0.5% for larger portfolios or for more highly volatile positions.

5. In my book ?0 Ways Not to Lose Your Home in the Stock Market?(due 2005) I wrote 揥hat we also failed to realise was that instead of spreading our risk, we were magnifying our risk. For instance, using a stop loss of 2% portfolio risk, let抯 say a trader has ten positions. That means if the market takes a sudden dive and all stops are triggered, they risk losing 20% of their entire portfolio value. Expand that out to twenty positions, then 20 x 2% = 40% of their portfolio is at risk. It can happen ?it did happen. If you freeze or have margin loans, the destruction can be far worse?

Dr Elder refers to the 2% risk rule as protection against shark attack and extends the concept further to a 6% rule to protect against piranha attack i.e. to close out the whole portfolio if it drops by 6% in the past month.

Taking this to its logical extension, Dr Elder describes how, using this strategy, also limits traders to three positions (at 2% risk) to start off with, until some of them rise into profit, before opening any additional positions.?/p>

(Readers may wish to refer to my Home Study course module on Money & Risk Management which is based on and includes Daryl Guppy抯 Share Trading & Better Trading books and includes my portfolio tools - available at our site. Also refer to books by Louise Bedford (e.g.Trading Secrets) and Dr Alexander Elder (e.g. Come into my Trading Room) for further explanation.)

In the next article I discuss how we use the Atkinson Portfolio Planner to ensure that the following planned risk and money management criteria are met:

1. The maximum total value spent in each volatility grouping

2. The maximum total value spent in any sector

3. The maximum position size as a % of total portfolio

4. The equity risk for each position

5. The combined total portfolio risk exposure

Sharetradingeducation.com includes the Investing Online Newsletter ? launching 2 July 2005 to teach online investors how to find, select & manage which stocks or shares to buy; money & risk management; importantly when to sell; traders' & investors' experiences; psychology, fundamental & technical analysis, articles from leading authors;& a DFS Equities portfolio to track weekly performance of sample selections. The first editions of the Investing Online Newsletter ?will also cover how you can draw up your own investment or trading plan.

Also at Sharetradingeducation.com:

* Jim Berg抯 Trading Strategies with Metastock Home Study Course with one month抯 email support from Jim Berg

*New Ebook of articles written by John Atkinson for Daryl Guppy's newsletter慣he Atkinson-Guppy Articles?/p>

* Stock & Share Market Home Study Courses on the work of Jim Berg, Daryl Guppy, Alan Hull, Simon Sherwood & Van Tharp

* Money & Risk Management Portfolio Tools

* A FREE exclusive online trading & investing stock market club with access to FREE downloads

Visit http://www.sharetradingeducation.com