How
To Make Your Money Work For You: Let It GROW!
These
are not really in any order you can use them as you see fit, or not at all. And
actually I would prefer that you formulate your own investment strategy.
However they may serve as a starting point of your own formulation.
1. “Be
Fearful When Others Are Greedy and Greedy When Others Are Fearful” – Warren
Buffet. When others are taking ever increasingly risky means of gaining wealth
you should be fearful of the stability of the market. And when everyone is
afraid that the market is plummeting be greedy. Mr. Buffet is not telling you
to time the market here nor is he specifically saying divest or invest when the
market is way up or way down. He is just telling you to analyze market
environments in order to receive the best value that you can when purchasing.
2. Shop
for investments like you would shop for a new car. You would never buy an
unsafe car, so why would you buy an unsafe investment. What I am saying here is
do your research. You spend countless hours and trips to different car lots to
buy a vehicle that can potentially impact your future. Investments have just
the same impact on your financial security as cars do with your physical
security. Spend the time to find that investment that will get the 5 star
safety rating of Wall Street.
3. Every
day is Black Friday in the stock market. You can always find a deal when
looking for investments, you just have to be willing to dig for it and
sometimes wait for it. A great example is the bear market from 2007-09 if we
pick one stock, let’s say Ford (NYSE: F) and bought a modest $100 worth on
24/NOV/08 when it hit it’s all time low of $1.01 and forgot about it until now
17/DEC/14. If we sold ford today we would net $1375 after taxes for a gain of
almost 1,400%! While I can’t tell you what investment will be the black market
deal today I can tell you if you don’t search for it you will never find it.
4. Don’t
cut down what you are growing! If you keep eating your harvest your garden will
never grow into a full blown farm. Same goes with investing as does gardening,
if you keep spending your growth and don’t add it back to your principal
investment, that first seed that you sowed, you will never grow it into a 1,000
acre farm. Reinvest your dividends, reinvest your stock sales, and reinvest
surplus income. The more you put into it the more you will get out of it when
it is time to harvest your growths.
5. Taxes
were created by the devil, don’t give him more than he deserves. Yes your
investments are taxed too! And no the government isn’t the devil but to
maximize your gains you should familiarize yourself with the U.S. tax code
regarding investing. By doing the research you can easily increase your profit
while investing. While the U.S. tax code is upwards of 70,000 pages, the
easiest way to increase profit margin is waiting. If you simply hold an
investment for at least 1 year the tax on your gains from investing will
decrease. If you want to do your part in sticking it to the man then just wait
it out a bit.
If you want to be successful in the world of investing
put the time in to educate yourself about it and what you are purchasing. Being
patient will pay off in more ways than one. Let your garden of investments grow
unimpeded by your own greedy fingers and water and fertilize it often. Only
time will tell if your garden will grow into a full-fledged farm.
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