In the next few postings we will look at investment strategies for our time. Today we start by defining investments. Read on
Definition Investment-using current resources to create long term wealth that ensures revenue growth, and/or capital growth. By virtue of this definition everyone can start investing because you use current resources meaning something already in your hand. It maybe a skill, an idea, some income or whatever. The Bible says God gives seed to the sower. If you seek God he will show you the seed in your hand that you can start investing. By this definition investment focuses on long term wealth growth. In other words its based on invreasing your networth. Networth is the net value you have if you deduct from your total assets the liabilities or borrowings or debt. This is the true value of your wealth. Again from this definition investing should result in either increased income streams and value as well as the appreciation or growth of the total value of the underlying asset.
ØThe initial amount = capital. The resultant profit = growth.
Another definition for investing is simply making your money make more money before you consume it. In other words your primary source of income should be made to produce more money before you use it. Put differently your primary source of income gives you seed to invest and not bread to eat. The challenge is that may people eat their seed and so cannot grow their wealth. Investing thus requires foregoing present consumption for higher expected future benefit.
Tomorrow we look at the reasons why you should be an investor.