Lesson No. 7 – Types of Investments and types
of Investors. Active Investments. How we can generate an Active
Investment.
Active investments are those investments that “produce” depending
on Investor’s personal involvement. They are the “unsafe” investments,
as some people would call them, but, in my opinion, they are very
safe. „The safest investments are the stocks of the stable international
corporations” would say a Securities Broker. “No, the safest are
the investments in real estate” a Real Estate Agent would argue.
I really don’t know who is right, but I know one thing, that the
safety of these investments depends on the professionalism degree
of the person who manages them.
In 2001 I had an available amount of about 5 000 $. I struggled
saving them and it was a significant sum for me. I had a “Dacia
Nova”, a rather bad one, but I was hoping to sell it for about
3 000 $. Although I could have bought a second hand “Cielo”… Oh
God, how I would have liked to own that “Cielo”… However, I chose
another option, because I was a Beginner Investor. At that time
I thought about three options:
- To keep the money in a safe Bank – and this would have offered
me a higher Financial Safety and, probably, I would have received
and interest of about 3% per annum, that is about 270 $ per
year;
- To invest in a real estate (as I was very sure that prices
would increase. Why I was so sure, I‘ll tell you during this
lesson);
- To create a long-term active investment. And this is precisely
what I have done, taking the following steps:
I bought a one-room flat with 7 500 $, I invested about 1 000
$ in repairs and about 500 $ in furniture. Thus the investment
amounted to 9 000 $. I borrowed the difference from my friends.
However, this would have remained a Passive Investment, had I
not let it. Now this flat is worth about 24 000 $. Therefore,
from passive investments I would have earned until now 15 000
$, that is a profit rate of 166%, in just 3 years!!! Not bad,
isn’t it? But I preferred to let it, making it an Active Investment.
For three years that flat “has produced” 140 $/month (as an average).
That is about
1 680 $ per year. Therefore, in three years my investment has
paid back at a rate of 56%. If I also take into consideration
the increase of the flat value, it results that the profit rate
was over 200% !!! I tell you, this is a fantastic Profit Rate.
If I stopped here, maybe I wouldn’t stay here to discuss with
you, but went further on, looking for other types of investments,
able to produce more ... I found them ... but about the rest we’ll
talk during the course ... because in the end this is my «Know-How»
it took me some time to «knock again and again to closed doors»
...
A lot of people tell me that I’m lucky... probably I am, but
luck is something that does not depend on us. However, I’ll promote
that kind of “luck” that will be created by us. A lot of people
told me „... yes, but you had the 5 000 $ and that salary and
the Banks granted credits to you, we have a different situation...”.
What can I say..., I had indeed the 5 000 $ (half of this amount
was borrowed) and that salary, but, in my opinion, the example
shown in the previous lesson it’s just an EXAMPLE, and in order
to get some money from investments you only need money... Mind
me, I didn’t say „a lot of money”... it’s true that if you want
to get a lot of money you need a lot of money, but for getting
money (I repeat myself here) you need money, and everybody has
money. One of my former colleagues, who remained a good friend
of mine, had at least what I had at that time (a salary, a car,
a position), but now there is a difference between us ... resulting
from the fact that I started three years ago and he only one year
ago ... Do you remember the Butterfly Effect.?.. The first Lessons
of this Course will teach you what to do so that you should change
the structure of your Budget, reducing your expenditures and thus
saving some money. Even if you wish to earn by investing, you
can start from the ”savings”.
Do you know why I appreciate the money from Investments? Because,
to get that money, I don’t have to work.
I know a guy who, when I started investing, had a fortune about
10 times bigger then mine. Both of us were employees, but he earned
much more than me. He mocked me when we talked about Investments...
He earned his money working hard, under stress, for the responsibility
he was bearing... Three years have passed, even now his fortune
is bigger than mine (because during these three years he earned
a lot)..., but .... his fortune is two times bigger than mine,
because my Investments “worked” together with me during these
three years and ... do you know what is the most pleasant thing...?
He doesn’t mock me any more now...
- An overall view
on the Incomes and Expenditures Budget and the classical methods
of taxation for a natural person.
- Analysis of the
Incomes and Expenditures Budget, of the prospect and of the
methods used to increase the incomes and to decrease the expenditures.
- Where does money
come from, why and how it is taxed, depending on its source.
Test of evaluating the financial skills and the incomes. Basic
notions of Financial Education. The 45-year plan.
- The world of the
rich is a world that lives according to other rules. We begin
with the beginning, and the beginning is changing your way of
thinking.
- Preparing a Plan
to obtain the financial independence.
- Basic rules and
techniques for increasing the incomes and decreasing the personal
expenditures (that is for getting rich).
- Types of Investments
and types of Investors. Active Investments. How we can generate
an Active Investment.
- Identifying, attracting
and using external resources - Other People's Time, Other People's
Money, Mentors and many other absolutely necessary things.
- DREEEAMS ! I understand
that if I invest I earn money without working... but where from
can I get money to invest? Financial leverages. Pirghiile financiare.
- The Past and
Visions on the World Financial Future. Why is it good to be
Rich? Ways of protecting the Investments.
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