Introduction
Generally, every personal business requires a capital for startup. This capital are regarded as investment, no matter the amount a person has at first. The world at large is a business arena, where people leave their homes to their various place of work. The activities that happens daily at place of work, can be solely determined by the number of years, effort applied, and the investment that are put in place.
Importance Of Investment
A business tends to grow when their are investment in place. It is generally said that "we use money to find money", so the profit a business organisation expects in return should be determined by the amount of input(investment). I will give an example with a business firm in sport today.
Newcastle United is a football club in the English Premier League. They where performing poorly, till the Club was sold to an Arab Business man as at last season(year). With the coming in of the New owner, Newcastle has become one of the toughest team in England. After spending money to bring in quality players and good coaching staffs, they are now competing with other big clubs. Amazingly they even qualified for next season champions league.
From the brief example above, we can easily deduce that their are two(2) major types of investment, They include TIME and MONEY. This two types of investment works perfectly when they are applied together. Spending money alone, might not be enough, but with your time and attention, you could accumulate very fast.
Investing What You Can Afford To Lose
This is the context, where you are free to invest what you truly have. Your investment are not necessary meant for any other thing. investing what you can afford to lose in this context simply means, inputting your capabilities into something that might likely yield profit. You should know that borrowing money for investment isn't wise, that is a dumb idea.
Reasons Why We should Invest What We Can Afford To Lose
It is advisable to invest what you can afford to lose, or the consequence might hit you hard. The following reasons are...
• To avoid psychological trauma when your investment plan fails.
• To avoid lose of borrowed funds you can't pay for.
• It teaches new ways of making investment after suffering loses
• The little profits would make you want to invest more
• It teaches us how to grow business from scratch.
Managing Your Profits
In every investment, there is always a reward, which can be either positive or negative. But we are more concerned with the positive reward(profit). There are some investment plan that tends to yield large profit, so investors most times gets carried away with the huge amount. It is expected of us to draw a proper plan of what our reward should be used for, and making sure that we include another investment option in the new plan.
In Conclusion
I don't think you will find a rich person that has not made an investment long time ago. It is either they invest their time, or money, or both. Investment that tends to yield no profit requires proper planning. It is advisable to risk what you can afford to lose.
I am not a financial advisor, but the content here might be of help to anyone.
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