Investments contribute to gaining opportunities that provide a financial gain or loss. Investments include: hard assets (property and equipment), liquid assets (money, stocks and bonds) and people (employees, friends and family). Often people only praise hard assets; thereby, turn liquid assets into hard assets by tying them up in a 401k, Roth IRA or pension. Most investments have a degree of risk. Utilizing investments is challenging. As in all business, it is best to have a diversified portfolio between various assets. This means dividing time and money into hard assets, liquid assets and people.
Until recently, land was the best deal for everyone. It is a money maker and increases in value. Ownership of land equals a place to work, play and sleep. People are aware of how not owning or being able to access property reduces chances to succeed in future ventures. Lately, the value of property went down, though true value remains consistent.
The least stable land investments are single unit properties like gas stations, theaters or homes. Although a place to work, if they do not sell enough gas ownership of the land is jeopardized. Homes are lost when someone loses their job. Strip malls, office spaces, duplexes and apartments provide monthly income in the form of lease payments or rent. As a child we owned a duplex. Renters supplemented my parent's monthly expenses. Later they could afford a home.
Equipment is valuable. It assists with time whether producing hundreds of doughnuts in a day or driving to and from work. As a person who went to work and school, commuting was necessary. Riding the bus was not feasible. In addition, the bus doesn't run at night. I could get to work, or get home from work, yet going to work and coming home when working the swing shift is impossible.
Retirement funds are investment funds people cannot access until they turn sixty-five. This is fine; however, in the event of emergency a person cannot make withdrawals without penalty. Investment funds also produce a high interest yield, yet it is liquid so whether repairing a car or leasing a booth at the State Fair a person has funds when opportunities are available. That is why savings accounts, bonds and stocks are essential.
There will be many opportunities before dying. Investment funds bridge gaps and open possibilities to greater wealth. Being responsible and placing a percentage of each check into savings is worthwhile. U.S. Treasury bonds earn 3% interest until the bond matures. If something happens or an opportunity arises, it is easy to go to the bank and cash them in.
These are both effective; however, dividend shares produce a financial gain every time dividends are paid. Investment brokers handle these operations because investing in stock is a cumbersome and often tricky mode of making money. Dividends are easy to manage because when dividends are paid a person gains money from the dividend and purchases more shares. Share price goes up or down and the investor still makes money off their savings. Ten-thousand dollars produces about one-hundred dollars each year and the individual still has ten-thousand dollars in savings.
People are taken for granted; however, investing in people produces more than any other type of investment. In relation to friends and family it isn't difficult to think of a time when you spent vacation at their house or they gave you a mountain bike or computer for school. Even when working within a family it is important to remember to maintain relationships with fairness between what you contribute to them and they contribute to you. Would you let a person stay in your home who leaves a big mess? Would you stay at a person's home three nights who expects you to paint their entire house in return? The person making dinner earns their portion of the meal by preparing food for everyone.
Employer and employee relationship are relatively the same. Employers and employees must contribute something in order to maintain an acceptable exchange. Employers offer a safe atmosphere and paycheck. Employees offer time and labor so the company makes more money. An important part of the equation is mutual respect and courtesy so neither feels they are imposed upon and begin to evaluate other options. More concepts related to social climate are addressed in "If Aristotle Ran General Motors."
Ideally if someone suddenly inherited or earned a large sum of money, they have to solidify financial prospects and generate money in the future. This means dividing earnings between all forms of assets. They should place all earnings into an investment fund in order to turn earnings into a larger amount, while retaining the original amount of money. Pay off a portion of debts, buy land and assist friends and family so allies are stronger.
This is only an outline of general ideas related to the topic; however, current decisions impact future opportunities. It doesn't take long to remember when skipping lunch at a restaurant meant having enough to pay an electric bill or after helping someone else they helped you later. Today's investments secure tomorrow's gains.
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