Investment
Investment is complicated or easy to describe because Investment means different to different people. Somebody said Investment is all about stock or real estate or commodity but all of them are right according to them because they are sharing their experiences. They manage to earn from that field show they describe Investment in those ways.
But for me, Investment is just getting profit from what you invest because Investment is not only investing money but it investing time, brain, soul and others.
For example:-Investing time and brain in a Financial book, You will get Financial Knowledge which can help you to use money properly and your cash flow will be good.
By doing little effort like that you cannot make money like Billionaire's but you will be rich more than other ordinary peoples.
The Five level of Investors
Investing is the key to finacial freedom.Most people have known that they should invest but most people are afraid to invest because of the fear they have planted in the school till now. Job is the best option and secures also. They have the fear of losing money. More than that they have the fear what other people think about them.
They are five types or level of investors found in the I quadrant. They are
Level 1: The Zero-Financial-Intelligence Level
There are many people who make a lot of money who fall into this category they earn a lot and spend more than earn.There was a man who looks rich he has a good job as a real estate broker, a beautiful wife and two kids in private school. They live in a beautiful house overlooking the ocean. He and his wife drive and expensive cars. They go on holiday every year across the ocean. They look rich, but they had was bad debt. They looked rich but were poorer than most poor people.
Now, They are homeless. When the real estate market crashed, they crashed. They were no longer able to pay the interest on all the debt they had accumulated.
The people in this category have low financial IQ. These people think that they are smart but they are wrong they just put money in the liabilities.
Level 2: The Savers-Are-Losers Level
Many people believe that it is smart to save money. The problem is that money is no longer money. The value of money decreases rapidly after a few years the savers' money is no longer money.
The primary reason why prices have risen since 1971 is simply because the United States now has the power to print money to pay its bills.
U.S dollar has lost 95% of its value when compared to gold. It will not take another 40 years to lose its remaining 5%.
Level 3: The I'm-To-Busy Level
This is the investor that is to busy to learn about investing. Many investors at this level are highly educated people who are simply too busy with their careers, family, other interests, and vacations.
They hired an expert to manage their money. This kind of investor pray that expert that hired is really an expert and help him/her to increase their wealth.
The Nickname that I give these types of investor is empty head with money. I don't care they have a high paying job that gives them lots of money. If you don't have the knowledge to make money work for you then it is worthless. In the end, you will lose all the money.
After the financial crisis broke in 2007, many affluent people found out that their trusted expert was not an expert at all and, even worse, could not be trusted.
Level 4: The I'm-a-Professional Level
This is the do-it-yourself investor they want to do there work by themselves. They think that they do that job very best than others or disbelief others.
People who are Level 4 investors fall in S-Quadrant.
This investor may buy and sell a few stocks, often from a discount broker. After all, why should they pay a stockbroker's higher commissions when they can do their own research and make their own decisions?
Average or Below Average fall in these types. They are solo investor which generally use there own money to invest and get low returns than Level 5 and pay more tax.
They have a formal financial education. If they do attend a course or two, it is often in a narrow subject area. For example, if they like stock trading, they will focus only on stock trading.
Level 5: The Capitalist Level
This types of investor are the richest-people -in-the-world level. They are a business owner from B quadrant investing in the I quadrant.
They have different places to invest for them because of the SEC. SEC protect average and below-average investor from wild unscrupulous dealmakers, businessmen, brokers, and investors. It protects the public from the bad investments, it also keeps the public from a good investment.
Until you have a million dollars you can't invest were rich people invest.
This types of investor use other people's money(OPM) to invest. They invest with a team. They do not have to be the smartest. They just have to have the smartest team.
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