Turbojet

INVESTMENT GOALS & OBJECTIVES

One of the most important factors to consider before setting an investment strategy are the goals and/or objectives of the investor.

Are you investing for a house? A car? Wedding? Or retirement?

These goals and objectives make it easier for you to determine how you want to structure yu investments.

For instance, an investor investing for retirement has to invest in financial instruments which carry low risk and preserve the capital because you will need the money in the future after work. This will involve a portfolio made up mostly of fixed income instruments like bonds and treasury bills.

An investor investing to be wealthy will have to take on more risks for higher return and will put the majority of its assets in stocks.

So before you start your investing journey, make sure you know why you are investing and strategize to achieve your objective.

"The best time to plant an oak tree was 20 years ago. The next best time is now!"

We prepared a simple table showing you how much you stand to gain in 25 years investing only $100 compounded annually.

The first table looks at a one time investment of $100 and the second table looks at yearly payments of $100.

Want to know how much you'll be worth after 25 years if you invest $100 monthly and it is calculated at 20% compounded annually? $207,516.75

What are you waiting for? Go invest

INVESTMENT CLUBS

One of the best ways to learn how to invest is to invest as a group. Getting friends or family together, paying small amounts in dues at regular intervals (monthly in most cases) and deciding at monthly meetings which companies or financial instrument you want to invest in.

So get a group of friends interested in saving and investing and form an investment club.

Formation of investment clubs are different from typical clubs though so make sure you follow the rules.

Happy investing!

Do you invest? If your answer was yes, great!! But did you know that some fixed deposit rates in banks are lower than the treasury bill rates? The treasury bill is considered the safest investment instrument because it is backed by government. Therefore a private institution (in this case a bank) which has a higher tendency to default, should compensate you for higher risk by paying an amount higher than the Treasury bill rate. Let's look at a simple example, A and B have $200. A puts his money in fixed deposit at Bank X at a rate of 11% and B puts his money in Treasury Bills at the same bank at 23%. Who will gain more? To look clearly at how much you are losing whilst Bank X gains, let's say Bank X puts A's $200 in a treasury bill right after he puts it in their fixed deposit. Bank X will make a free profit of 12% (23%-11%) and pay off the 11% when it matures. So next time you want to invest in any of these assets, look carefully at both rates.