
You Are an Investor (Whether You Know It Or Not!) - Tips For Becoming a Better One!
By Kate Babkova
We are all investors in some way! You may not consider yourself an investor, but for better or for worse, you are one! Some of you invest in academic education, some in stocks, some in mutual funds, some in rims on your cars; you get my point here - the list can go on and on. Whether we do it consciously or subconsciously, we all do it. But how do we know when we are investing? Well, the most simplistic definition of "investing" is converting your money into "things" that will allow you to convert it back into money at a later date! In some cases MORE money, in some cases LESS money and in some cases you'll get back what you've put in!
I think it goes without saying, but ideally we all want to get more money out of our investments! In this article I will cover some valuable tips for you to use when you are making your next investment!
1. Be aware!
Lets face it, when we are conscious of our decisions we are a lot more likely to make a better choice! So next time when you are "investing" your money with hopes to get it back at a later date, stop. Now ask yourself "Am I investing my money? Or "am I spending my money?" When you ask your self this question, you automatically become aware of what it is exactly that you are doing. Now you'll have a clearer vision of what your actions, and the end result will potentially look like! Of course our emotional expectations may not always meet our actual end result, but the point is for you to become aware of your initial action and think! This is SO simple, we can ALL do it.
2. Price is what you pay, value is what you get!
Price is the amount of money you are expected or required to pay (in some circumstances this is an unpleasant experience - which of course can happen after a bad investment). Value on the other hand is worth, importance or usefulness of something. An important thing to remember is that when you are consciously investing your money with hopes to get more money later, the value should ALWAYS be greater than the price you pay! This is one of the most important factors in making a good investment!
For example, when we buy a new car, we "invest" our money because we will later sell the car and get (some) money back! But how do we know that our value is greater than the price we pay? Well, we know that if we buy a NEW car, you will lose 10% of its value as soon as you drive off the parking lot! This is our number one single indicator that tells us when we sell the car, we will receive LESS than what we've initially invested. This makes it a money losing investment! So how do we find investments that carry more value than the price we pay?!
It's not as simple as A-B-C that's for sure, because if it was, I am sure we would all be doing it! But what I can tell you is that we have to look for good deals!! Good deals are the definition of value exceeding price! And the only way to do this is through research of the subject and knowing the market! That's how we spot good deals!!
When I was looking for a new car I knew I wanted a hybrid because gas prices were on the rise and at the time I would have rather got another pair of shoes than overpay for gas to get to my job (which I didn't always love!). So I knew that paying $30000 for a new hybrid car would not give me more value for the price (I could get a waaaaay cheaper car). But I also knew that if I found a good deal, then I would definitely get my monies worth and more! For a few weeks I was searching on a used car website looking at prices vs. the year vs. the kilometers. After a while I had a pretty good idea of what the fair market value of the car I needed was. Now, all I had to do was find that car for WAY below FMV and I had a deal! It didn't happen over night, but I ended up finding exactly what I wanted for $7000 BELOW FMV!
3 years later, I could sell my car and still make an extra $4000 (because I would sell it for more than what I paid for it!!! This is also known as built in equity!!!
I use this principal when I invest in real estate to build my wealth, and it worked yesterday, works today and will work tomorrow!
When your value is greater than the price you pay, you got a money making deal!
3. Who you should invest your money with?
Let me ask you this, do you know anyone who goes to their job without particularly "loving" what they do, yet they do it anyways because they get a decent pay cheque? Do you know anyone who has a hobby that they love, and just happen to get paid for it? Now, do you think that people who have hobbies AND get paid to do them will FAR outperform those that just go to their job to collect a pay cheque? I think so!
The point I am trying to make here is that when you are consciously and consistently trusting someone to invest your money, consider the following: Are they willing to help you make money before they make a cent (or charge you commission)? This will truly show if making YOU money drives them or collecting a pay cheque drives them.
For instance, when you give your money to your financial advisor and he/she invests it in a mutual fund, he/she gets paid no matter what! Their earnings do not depend on your investment success! This would worry me. What if my investments crash, who is accountable? YOU! That's right, and your FA gets paid to invest it for better or for worse. Doesn't seem so fair, does it? They are making money at YOUR risk!
It makes more sense to invest with someone who doesn't make a cent until YOU do! Then YOUR success becomes their ultimate goal and priority!!!
I hope that this article has shed some light on your investments. For more information on successful investment strategies please visithttp://www.jvforprofits.com
Article Source: http://EzineArticles.com/?expert=Kate_Babkova
By Kate Babkova
We are all investors in some way! You may not consider yourself an investor, but for better or for worse, you are one! Some of you invest in academic education, some in stocks, some in mutual funds, some in rims on your cars; you get my point here - the list can go on and on. Whether we do it consciously or subconsciously, we all do it. But how do we know when we are investing? Well, the most simplistic definition of "investing" is converting your money into "things" that will allow you to convert it back into money at a later date! In some cases MORE money, in some cases LESS money and in some cases you'll get back what you've put in!
I think it goes without saying, but ideally we all want to get more money out of our investments! In this article I will cover some valuable tips for you to use when you are making your next investment!
1. Be aware!
Lets face it, when we are conscious of our decisions we are a lot more likely to make a better choice! So next time when you are "investing" your money with hopes to get it back at a later date, stop. Now ask yourself "Am I investing my money? Or "am I spending my money?" When you ask your self this question, you automatically become aware of what it is exactly that you are doing. Now you'll have a clearer vision of what your actions, and the end result will potentially look like! Of course our emotional expectations may not always meet our actual end result, but the point is for you to become aware of your initial action and think! This is SO simple, we can ALL do it.
2. Price is what you pay, value is what you get!
Price is the amount of money you are expected or required to pay (in some circumstances this is an unpleasant experience - which of course can happen after a bad investment). Value on the other hand is worth, importance or usefulness of something. An important thing to remember is that when you are consciously investing your money with hopes to get more money later, the value should ALWAYS be greater than the price you pay! This is one of the most important factors in making a good investment!
For example, when we buy a new car, we "invest" our money because we will later sell the car and get (some) money back! But how do we know that our value is greater than the price we pay? Well, we know that if we buy a NEW car, you will lose 10% of its value as soon as you drive off the parking lot! This is our number one single indicator that tells us when we sell the car, we will receive LESS than what we've initially invested. This makes it a money losing investment! So how do we find investments that carry more value than the price we pay?!
It's not as simple as A-B-C that's for sure, because if it was, I am sure we would all be doing it! But what I can tell you is that we have to look for good deals!! Good deals are the definition of value exceeding price! And the only way to do this is through research of the subject and knowing the market! That's how we spot good deals!!
When I was looking for a new car I knew I wanted a hybrid because gas prices were on the rise and at the time I would have rather got another pair of shoes than overpay for gas to get to my job (which I didn't always love!). So I knew that paying $30000 for a new hybrid car would not give me more value for the price (I could get a waaaaay cheaper car). But I also knew that if I found a good deal, then I would definitely get my monies worth and more! For a few weeks I was searching on a used car website looking at prices vs. the year vs. the kilometers. After a while I had a pretty good idea of what the fair market value of the car I needed was. Now, all I had to do was find that car for WAY below FMV and I had a deal! It didn't happen over night, but I ended up finding exactly what I wanted for $7000 BELOW FMV!
3 years later, I could sell my car and still make an extra $4000 (because I would sell it for more than what I paid for it!!! This is also known as built in equity!!!
I use this principal when I invest in real estate to build my wealth, and it worked yesterday, works today and will work tomorrow!
When your value is greater than the price you pay, you got a money making deal!
3. Who you should invest your money with?
Let me ask you this, do you know anyone who goes to their job without particularly "loving" what they do, yet they do it anyways because they get a decent pay cheque? Do you know anyone who has a hobby that they love, and just happen to get paid for it? Now, do you think that people who have hobbies AND get paid to do them will FAR outperform those that just go to their job to collect a pay cheque? I think so!
The point I am trying to make here is that when you are consciously and consistently trusting someone to invest your money, consider the following: Are they willing to help you make money before they make a cent (or charge you commission)? This will truly show if making YOU money drives them or collecting a pay cheque drives them.
For instance, when you give your money to your financial advisor and he/she invests it in a mutual fund, he/she gets paid no matter what! Their earnings do not depend on your investment success! This would worry me. What if my investments crash, who is accountable? YOU! That's right, and your FA gets paid to invest it for better or for worse. Doesn't seem so fair, does it? They are making money at YOUR risk!
It makes more sense to invest with someone who doesn't make a cent until YOU do! Then YOUR success becomes their ultimate goal and priority!!!
I hope that this article has shed some light on your investments. For more information on successful investment strategies please visithttp://www.jvforprofits.com
Article Source: http://EzineArticles.com/?expert=Kate_Babkova