Yes, start to learn about the different investment options that exist, and which ones suit you best.
Investment is defined by Investopedia.com as
"An asset or item that is purchased
with the hope that it will generate income or appreciate in the future. In an
economic sense, an investment is the purchase of goods that are not consumed
today but are used in the future to create wealth. In finance, an investment is
a monetary asset purchased with the idea that the asset will provide income in
the future or appreciate and be sold at a higher price."
Anyone who does that is an
investor. You can either be an active
or passive investor.
An active investor puts his money in a business
and regularly monitors or is involved in the day-to-day management of the
business. For example A real estate broker, an enterpreneur who starts a
business, a major shareholder in a Public Liability Company (PLC), a stockbroker/trader,
etc. While a passive investor is someone who puts his money into a business
he/she knows little about, and is also not fully involved in its day-to-day
activities. When you put your money in a mutual fund, buy the ordinary shares
of a PLC at a public offering, lend out money at an interest rate or fixed your
money in the bank, buy government treasury bills and bonds, and so on, you are
passively investing. You are not directly involved in how the money is made.
Investments is how the rich become rich and
remain very rich, because there are three ways of making more:
1. Work for money
2. Let your money work for you
3. Make other people's money work
for you.
The first group includes the average person, who
is yet to learn about, understand and practice investing. The second group
includes a person who has saved/pay himself regularly and who now wants his
money to work for him. But the professional investors, and the extremely rich
individuals belong to the third group. They are the people who not only make
their money work for them, they also make other people's money work for them,
thereby. They understand that you can make much more when you add other
people's money to yours in making money.
Now I am not talking about corrupt politicians
or civil servants who refuse to pay worker's salaries on time, instead putting
such monies in a fixed deposit. I am talking ethical, God-fearing and legal
methods of using OPM (other people's money) to make more money for yourself,
including avoiding/delaying taxes (government money).
When big corporations like MTN, GLO,
Multinationals take loans from banks, when the commercial accepts your money
and fixes it for you at a high interest rate, they are using your money to make
more money.
In this blog, I shall be discussing different
ways of making your money work for you, and using other people's money to make
more money for yourself. You can never be extremely wealthy without using other people's money (OPM) to make money for yourself. It is not selfishness; it is
the principle of professional investing.
I hope this has whet your appetite in readiness for the main course on investing to come in subsequent months. Investing isn't rocket science, neither is it for a select few. You can become a savvy investor.
N.B: Bob of Christian personal finance (christianpf.com) has a short
investment course, check it out here. Or use this for the full list.
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