Making Smart Investments

With the economic downturn in the world today, there is no doubt that people are finding it more difficult to feed, let alone set aside financial resources for the sole purpose of investments.

Despite this, it is important to note that investing is an effective way to build wealth. What is also important, is ensuring any investment decision, is SMARTLY made. It is necessary if one must get the expected returns in our financial lives.

The universe understands principles and will return to us what we give it; seed time and harvest time, what you give you receive, give and it will be given to you.

With this in mind, one must understand the principles that govern investments and returns, how they work and how to apply them.

Any individual who decides to invest has first, developed a savings habit, which in itself is commendable. An investor is first a saver. A person who cannot put money aside for the future (delayed gratification) can definitely not invest. Deciding to invest takes a lot of discipline.

What exactly is the meaning of investment?

INVESTMENT is any effort channeled toward a goal with the aim of getting future interest (Google). It is that simple. This definition debunks the myth that investments only come in form of monetary resources.

Time, expertise, emotions, knowledge, etc, are resources that can be invested. This will depend on an individual’s expected returns.

Here are a few things to note before making a decision to invest;

© Never allow anyone pressure you into anything, in this case, investing. You are not in competition with anyone. Every need, life, purpose, is different and tailor made to each individual.

• Be careful about the application of the principles you learn. Principles are the same all over the world but their application differs.

For any investment to be realistic and yield results, it must be in line with the SMART acronym;

S – specific (answers the questions of Why and

M – measurable (can the progress of your investment be tracked?)

A – attainable (can your investment goal be achieved?

R-T –

realistic (is your investment ambiguous?)

timely (answers the question, When)

Here are a few tips to consider before making any investment decision;

  •   Identify your reason for wanting to invest. In the words of Myles Munroe, when the purpose of a thing in this case, investment is unknown, abuse is inevitable. Some reasons may include; for security, better standard of living, to acquire assets, to raise capital, financial independence, etc.
  •   Know and understand your risk appetite. Are you a risk lover, risk averse or risk neutral? Knowledge of your risk appetite will help you make smart investments that appeal to your appetite.
  •   Educate yourself. It will be disastrous to make investment decisions without being armed with appropriate information. Ask questions, read books, join investment clubs etc. Be financially literate.
    @ Play safe first and work your way up. Even a ladder has steps. You start from the bottom and work your way up. In the process of playing safe, you understand the dynamics of your investment, economv and environment.
  •   Be patient. An impatient person cannot make any reasonable return from his /her investment.

Investment is a personal journey and a deliberate action. The band wagon effect should never come to play when making an investment decision. If you have ever wondered about the best time to start an investment, it is NOW.

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