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Millions, Billions, Trillions -- It's All the Same to Washington

 
     

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    A 1.2 trillion-dollar budget deficit. The biggest ever. And getting worse.

    Debate over seating one Roland Burris. Perhaps the weirdest Capitol spectacle ever. And getting weirder.

    Which do you think got more press today?

    Bingo!

    Maybe that's the problem. We don't seem to have a problem with budgets out of control.

    But seem obsessed by Washington soap operas that are "always" out of control.

    Here's the deal:

    Try as I might to tell you a trillion dollars is a lot of money.

    That it's a million, million bucks.

    That if you wrote it out on a check, you'd have 12 zeros to the left of the decimal point.

    It's a big point.

    A big check.

    But apparently a big yawn to a Congress and president used to these numbers.

    And a president coming in resigned to these numbers.

    Maybe for years to come.

    So we shrug our shoulders and keep on spending.

    Because we've always shrugged our shoulders and kept on spending.

    Assuming there's no government problem so big that spending more money on it might not make it bigger.

    But it does.

    It always does.

    Because when you're addicted to spending a lot of money it doesn't take a lot of time for you to lose a lot of perspective.

    Millions don't matter. Billions don't matter. Trillions don't matter.

    Only spending that, and then some, matters.

    So we've resigned ourselves to sums we cannot pay, and money for programs we can now only print.

    We are a nation of crack addicts, and the drug of choice is money we don't have.

    A drug foisted on us by Republicans and Democrats alike; convinced we'd prefer the effects of the crack than waking up and realizing they're the ones who are cracked.

     

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    Real Estate Investment Trust

    Not everyone has the financial ability to own and rent out multiple houses for extra income. And even fewer people want to deal with late night calls from tenants crying about their broken oil burner. Well, thanks to real estate investment trusts, or REITs, you don't have to deal with the stresses of being a landlord to make money off of the real estate market.

    A REIT is any entity that pools money from a group of investors to buy different kinds of real estate or real-estate-related assets, such as buildings or mortgages on buildings. It uses the income from rent and loan interest to pay out a steady monthly dividend to its investors.

    There are three types of REITs. The most common one is an equity REIT, which simply buys buildings and generates revenue from the rent it charges. Mortgage REITs loan out money to owners of real estate for mortgages or buy existing mortgages to collect interest, which is then paid out to the REIT's investors. Finally, there are hybrid REITs, which are a combination of mortgage and equity REITs.

    REITs can be public or private. Public REITs are bought and sold just like stocks and are listed on exchanges, while private REITs can only be bought through direct-participation programs. With private REITs, the investors are actually part owners of the real estate rather than just shareholders of the REIT corporation. They can't sell shares and they typically have to keep their money tied up for eight to 12 years. However, there's the benefit of less volatility since the market can influence public REITs.

    One potential drawback to REITs is how they are taxed. While qualifying equity dividends are normally subject to only a maximum of 15%, the dividends from REITs are taxed as regular income, which could be much higher -- depending on how much money you make.