Rich and Successful men don’t bank their money; they invest
their money either in form of real estate, shares/stocks, bonds, treasury bills
etc. Money has yielding capacity in the sense that if you have it, you can make
it do the job for you while you relax at home and enjoys the proceeds. However
many consider investment as a risky venture but I will tell you what? “It is
even riskier not to invest than to invest” because that your job you cherish so
much can be taken from you any minute. Never depend on a single income, make
investment to create a second source – Warren Buffet. Some of these means of
Investments are outlined below and subsequently we shall be discussing
exclusively on each of them in our subsequent publications.
1.
Stock/Shares
2.
Bonds
3.
Treasury Bills
4.
Bank Fixed Deposit Account
5.
Foreign Exchange Market
6.
Real estate investment
7.
Network marketing
8.
Online Investment
1. Stock/Shares: At some point, just about
every company needs to raise money either to open more branches, factory or employ
more professionals. Stocks provide companies access to capital in exchange for
giving investors a slice of ownership in the company. When you own a share of a
stock, you are a part owner in the company with a claim (However small it may
be) on every asset and every penny in earnings made by the company. It is that
ownership structure that gives a stock its value. Buying/paying for a company’s
share/stock is like contributing some capital for the running of the company
and in return the company lets you own a share in their profit/revenue
according to the volume of share you own in their company. If a stock/share
owner doesn’t have a claim on the company’s revenue/earnings, then stock
certificates would be worth no more than the paper they are printed on. As the
company’s earnings improve, investors are willing to pay more for the stock.
The price of a company’s share is governed by the forces of demand and supply.
The dividends you make by investing in a
company’s share (ie your own share of the company’s profit) is provided by the
company by making pay out at regular intervals. The company can also decide to
pay you your dividends by offering you more shares from the company thereby
increasing your stock shares. Stocks/shares are liquid securities and can be
resold at secondary market for a higher price and in some cases at some lower
price depending on the market demand for such a share and the company’s financial
state as at the time. When stocks are sold at higher price (appreciated values)
in the secondary market, profit made from such sales is called capital gain. When
stocks are sold at lower (depreciated value) the investor loses some of his
initial investment capital and suffer a capital loss. In most cases nobody would
want to sell his shares at a depreciated value instead rather keeps the shares
until when it appreciates, unless the shares is anticipated to fall to an even
lesser value in future or he seriously needs the money at the moment. Therefore
as you can see, by investing in stocks, you can either gain or lose, however
the management is supposed to increase the value of the form for shareholders
by bringing in more revenues for the company. If this doesn’t happen, the
shareholder can vote (on a one vote per share basis) to have the management
removed. Therefore, the more share you own in a company, the more stake you
have in its decision making process. In being a company’s shareholder, you are
not liable for the company’s debt. Even if the company goes bankrupt, you will
still retain your claim over the company’s asset according to your volume of
shares. Shares can only be issued by public limited company (PLC) that is
companies bearing the suffix plc in their company’s name. To buy shares, visit
the internet and find out which company is currently selling shares and the
price of their share. After deciding, visit the company of your choice to make
enquiries about their shares. However, the stock market is a professional market
requiring expertise in the field. It is recommended that before you start
investing in the stock market; seek the advice of a well trained stock broker
so that you don’t end up losing your money due to wrong decisions. You can
visit http://www.moneyhub.net
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