Invest?? Do you like invest?? Invest can be do anywhere and anytime do you want.

Investing to win is simple, if you know what you are doing. Unfortunately not many people actually know what they are doing, and without knowing it they invest to lose. If you want to become rich, and if you want to be financially free and not have to work then you need to know how to invest to win. In the article I want to shed some light on how the rich invest, so that you can learn how to invest better.

The mistake most people make when it comes to investing is that they invest to make money. Now you might think I’m crazy for saying that investing to make money is bad, but hear me out. Most people invest to make a lump sum at the end, when they sell their investment. They buy investments that cost them money each month to have, hoping they will go up in value over time. This ties them to their work and they have to work harder and harder just to make ends meet.

When they finally do sell their asset, and if they make money, they then take their money to buy a bigger investment that costs more money each month to own hoping they will make more money when they sell it. They are forced to work harder and harder just to make ends meet and they can never seem to get ahead. This to me sounds like investing to lose, not to win.

When you are investing to win you want to get both time AND money. The people who invest to make money at the end are not really investors at all, they are traders. Investors are people who buy assets that generate them passive income on a regular basis. If you want to invest to win then you need to focus on passive income, not just capital gains. If you want to get rich then you should buy investments that generate you passive income every month. That way with every investment you buy your income goes up, and the hours you have to work goes down.

One of the problems most of the so called ‘investors’ have today is that they are investing to not lose, not investing to win. There is a big difference between the two. People who are investing not to lose are fearful, and their main priority is security. They look for things with low returns that are very secure (like a term deposit account at the bank). The problem with this is that inflation goes up more each year than the amount they earn on their investment, which means they are effectively losing money each year.

People who invest to win invest with the intention of learning. Every deal they do they want to learn something new from it. Every property they buy, every stock they purchase, every business they build they want to learn more about investing. Because they are so focused on learning every time they do a deal they become a better investor. That means that they can make more money, quicker and with less money than someone who invests not to lose. If you want to become rich then you need to learn something new from every deal you do.

I have a friend who worked hard for a year and saved a fair amount of money. He then put about $20,000 in the stock market. He bought bank shares, but he doesn’t know why he bought them, he doesn’t know why they might go up or down, he just hopes they go up. If they go up then great, he made some money, but if he loses money then he hasn’t learnt anything. All he knows how to do is to work hard to get money, he is not a smart investor. People who invest to win also invest to learn.

Your next step towards becoming rich is to increase your financial IQ through education. By educating yourself in the area of finances you will be able to get a greater return on investment and you will be able to earn more with less work and less risk. Does that sound good to you?

Search terms:

If there a some question for you when you have much money. What will you do with your money?? Where will you invest your money?? What is your answer??

There are many options available when it comes to investing hard earned money. Let’s look at some of the alternatives and how they stack up against each other.

First, an ultraconservative approach would be to lock up a stock pile of cash in a safe or in a safety deposit box at a bank. The money might be safe from market fluctuations but is it really safe? Obviously there is no interest being earned. Actually the value of the money would be declining when the rate of inflation is factored in.

Another alternative is to put the money into a bank CD. At the time of this writing, bank CD’s are paying an interest rate ranging from.57% to 1.59% for a 6 month CD and.5% to 2.09% for a 1 year CD. Using the rule of 72 to determine how long it will take to double an investment and figuring on the highest rate of 2.09%, it will take 34.4 years to double an investment placed into bank CD’s. This is without factoring in rates of inflation. Once inflation is considered the actual return on investment is most likely negative.

Investing in the stock market is another option. This investing strategy puts money at risk without any recourse. If the stock market goes down, the individual investor has no security to protect the initial investment. However, a good and calculated investment may offer high yields. Historically from 1926 to 1999, the common stocks of the S&P 500 have had an 11.3% rate of return. However the S&P 500 performance for the last 5 years, as of Oct. 31, 2009 has only been.33% according to Standard and Poors. The volatility of the stock market is not for the faint of heart when it comes to investing hard earned money.

Real estate is the option that this author likes most. Real estate is a hard asset and the investment is backed by this asset. However not everyone is of the mind set to be a landlord or to deal with the day-to-day activities required in the process of buying, renting and selling real estate. There is hope for those investors looking to invest money in the real estate market without the need to be intimately involved. This is accomplished through investing in real estate via private lending.

Private lending in real estate is when one individual lends another an amount of money to execute a real estate transaction. The investor is then given a promissory note and a mortgage as security protecting their investment. A typical rate of return in this scenario is between 8 and 12% and in most cases this rate of return is constant throughout the length of the investment. Using the law of 72, a 12% return will double in value every 6 years. The constant rate of return is one of the reasons this type of investment is so attractive.

Due diligence is required regardless of the investment. When evaluating Bank CDs, determine the viability and health of the bank even though CDs are protected by the FDIC. The financial health, balance sheet and debt position of companies should be analyzed when considering stocks. Finally, the loan-to-value, appraisal and rental rates for real estate should be verified when considering a private loan.

Search terms: