Thursday, 10 December 2015

RULE 44: Understand What Investing Really Means


By on 05:00
Share this Post Share to Facebook Share to Twitter Email This Pin This



Chief Ezekiel Olasunmoye Fatoye, Veteran Telecoms Guru & Investment Expert

Many investments have a twofold purpose. They generate income and they increase in value. In other words, if you invest a lump sum (this is known as capital) you get regular small payments of some kind and the actual value of the capital itself increases, i.e. the lump sum gets bigger.

Let’s suppose you invest in property. In an ideal world you should be able to rent it out, thus providing the regular small payments in the form of rental income, and the value of the property should go up also, so your capital increases in value over time.
Likewise shares should payout dividends (generate income) and should be worth more than you bought them for when you come to sell some time later (increase in value). You get the idea. And notice I say ‘should’ rather than ‘will’ - nothing is certain in this game. 

“Remember that investments of any sort are a form of gambling no matter which way you look at it. And that you can lose. Ask Lloyds if you don’t believe me”.

You can of course invest in pretty well anything you want:
• Company shares
• Your brother’s harebrained buy-an-old-boat-and-do-it-up-and- sell-it-for-a-fortune scheme
• Fine wines, paintings, krugerrands, classic cars, rare books, Georgian glass
• Pension funds and such like including savings and deposit accounts
• Inventions and new product development
• Ideas and people
• Theatre shows, films, TV programme development.
And it doesn’t have to be just plain old investment. There is also:
• Sponsorship such as race cars, football teams etc. to raise brand awareness (hopefully yours and not just the race car or football
Team)
• Angelic capital - you invest in people and ideas in an altruistic way rather than purely as a money-making venture (as opposed to venture capital, where you invest in people and ideas purely as a money-making venture).
Remember that investments of any sort are a form of gambling no matter which way you look at it. And that you can lose. Ask Lloyds if you don’t believe me.
On the other hand, investing in a broad range of low risk investments can still net returns worth having. 

From The Book; The Rules of Wealth by Richard Templar
(Read Rule 45 of Rule of Wealth tomorrow on Asabeafrika)
  
Read-to-Wealth Series

POWERED BY:

http://www.proshareng.com/

Gbenga Dan Asabe

Africa's Number One Celebrity Encounter Blog

0 comments:

Post a Comment