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Investment-The secret of millionaires.

Updated on August 21, 2010

 In its simplest form, investment has to do with putting your money to work by buying assets at a low price with the intention of selling them when there is an appreciation in the price. The difference between the cost price and the selling price becomes the profit on investment.

 It is a basic truth that you are not rich until your money starts working for you. Our world today is characterized by people who work endlessly for money. They only try to break even by living a little above poverty level. This is because man’s strength is limited by some factors in his ability to create wealth.

Some people are borne and made to follow a wrong ideology about wealth. They are taught to go school, get good grades and a secured employment. They then work tirelessly and endlessly for money at the end of which they have nothing to show for it. Those who get the most secured jobs live on peanuts expecting retirement benefits when old. This like we all know are only paid on radio and television and rarely physically. This is because even the government is not interested in your welfare. Others whose jobs are not that secured are well paid but spend this money acquiring liabilities. They acquire things which eat deep into their finance in order to boost their ego. Most of them die miserable deaths leaving huge debts for their children and descendants.

This ignorance brought about the mentality that sees children as investments against old age. Parents accumulate huge debts during their life time that leave their children struggling miserably years after they get employed. This ought not to be so. Parents are supposed to bequeath wealth to their children on their demise.

It is not bad to work hard, but you cannot enjoy financial freedom until your money starts working for you. How? You may be asking. Great numbers of those who are wealthy in our country and the world over are investors. They are people who let their money work harder than they do. They invest the money they earn and the magic power of compound interest works tirelessly to make them millionaires.

The Various investment vehicles are:

A. Fixed deposit accounts: This has to do with keeping money in a bank account for an agreed period and receiving at the end of the period the capital sum and a fixed rate of interest. This service is undertaken by commercial banks.

B. Fixed income securities: This is the purchase of bonds either from the government or from companies. This also carries a fixed rate of interest at the end of the period for which it was agreed.

C. Real estates: This has to do with the purchase of fixed assets like buildings (residential and non residential) and either rent them out or sell them outrightly to take the profit arising from capital appreciation. It can also be the purchase of land and selling it when there is an appreciation in price.

D. Forex: This is an acronym for foreign exchange and involves the trading of currency that is presently undertaken via the internet.

E. Shares: This is concerned with the purchase of shares in a company that makes one a co-owner of the company.

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