RULE 44: Understand What Investing Really Means

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. 


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“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


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