Category: technology


Types of Investment Risks

October 18, 2018

technology

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There are basically two categories of financial risk: The first is referred to as Systematic Risk.

Systematic risk influences a large number of investments across a wide spectrum. The financial crisis of 2008 would be a good example. Virtually, every asset was impacted adversely. This type of risk is almost impossible to protect against. In other words, sometimes lightning strikes.

The second is referred to as Unsystematic Risk, also commonly called “Specific Risk.”

This is the type of risk that impacts a smaller number of investments across a narrow spectrum. An example of this would be a highly regarded company using dubious financial practices (think Enron). Proper diversification is the key to providing protection from this type of risk.

Now let’s explain in more detail the specific types of Unsystematic Risk that exist in the world of investing.

Market Risk

This is the type of risk that you may be most familiar with. It is simply the normal fluctuations in the price of an investment. It is most apparent in stock-related investments.

Simply put, it is the risk that an investment will decline in value, due to market forces. This is also sometimes referred to as volatility, which is really the measure of market risk. These movements in markets are what provide the ability for an investor to make money.

Credit Risk

This is also referred to as default risk. This occurs when a person or entity (company/government agency, etc.) is unable to pay what they owe on their debt. It can be either the principal or the interest. Corporate bonds tend to have a higher risk of defaulting but tend to pay higher rates of return in an attempt to compensate. Government bonds tend to have lower default rates but pay a lower rate of return. If a bond is considered (by a rating agency) to have a relatively low likelihood of risk of default, then it is referred to as investment grade. Conversely, If a bond is considered (by a rating agency) to have a relatively high likelihood of default, then it is referred to as a junk bond. This is somewhat of a misnomer, since “junk bonds” can be a solid addition to an investment portfolio and can mitigate other types of risk.

Country Risk

This refers to the risk that is inherent when a country cannot meet its financial commitments (think Greece). When a country defaults on its obligations, the impact is often that of a cascading nature. That means not only will the bonds of the country be affected but also other financial assets within the country, such as the overall stock market. In addition, other countries or companies that do business with the defaulting company can also be impacted.

Foreign-Exchange Risk

Investing in foreign countries provides many advantages, especially in terms of diversification. When you invest in assets or debt of foreign countries, note that the currency exchange rates can change the price of the asset or debt. So, even though the asset increases in value when you exchange it for your home currency, you could suffer a loss. The converse is also true: the asset could go down, but when you transfer it into your home currency, you could also realize a gain.

Interest Rate Risk

This refers to the risk when a change in interest rates affects the value of an asset or debt instrument. Typically, the risk applies to bonds in a more direct fashion than it does to stocks. However, stocks, especially preferred, convertible and high dividend ones, can also be affected. With all things being equal, as interest rates increase, the value of the bond will decrease.

Political Risk

This refers to the risk that occurs when the policies of a country change, especially if it happens in a random manner. For example, if a company is selling in country ABC and that country radically changes its tax laws and becomes business unfriendly, companies that do business in that country can be adversely affected.

Key Takeaways

1) Risk cannot be avoided and needs to be understood.

2) Through proper planning and execution, you can mitigate risk and profit from it.

3) Your goal is to minimize risk and maximize rewards.

4) Even though the market rewards risk-taking, that does not imply that just because an investment is high-risk it will be high-reward. It always has been and always will be a trade off.

5) Review all your investments to make sure you understand what type of risks you have.

Types of Investment Risks

October 18, 2018

technology

Comments Off on Types of Investment Risks


There are basically two categories of financial risk: The first is referred to as Systematic Risk.

Systematic risk influences a large number of investments across a wide spectrum. The financial crisis of 2008 would be a good example. Virtually, every asset was impacted adversely. This type of risk is almost impossible to protect against. In other words, sometimes lightning strikes.

The second is referred to as Unsystematic Risk, also commonly called “Specific Risk.”

This is the type of risk that impacts a smaller number of investments across a narrow spectrum. An example of this would be a highly regarded company using dubious financial practices (think Enron). Proper diversification is the key to providing protection from this type of risk.

Now let’s explain in more detail the specific types of Unsystematic Risk that exist in the world of investing.

Market Risk

This is the type of risk that you may be most familiar with. It is simply the normal fluctuations in the price of an investment. It is most apparent in stock-related investments.

Simply put, it is the risk that an investment will decline in value, due to market forces. This is also sometimes referred to as volatility, which is really the measure of market risk. These movements in markets are what provide the ability for an investor to make money.

Credit Risk

This is also referred to as default risk. This occurs when a person or entity (company/government agency, etc.) is unable to pay what they owe on their debt. It can be either the principal or the interest. Corporate bonds tend to have a higher risk of defaulting but tend to pay higher rates of return in an attempt to compensate. Government bonds tend to have lower default rates but pay a lower rate of return. If a bond is considered (by a rating agency) to have a relatively low likelihood of risk of default, then it is referred to as investment grade. Conversely, If a bond is considered (by a rating agency) to have a relatively high likelihood of default, then it is referred to as a junk bond. This is somewhat of a misnomer, since “junk bonds” can be a solid addition to an investment portfolio and can mitigate other types of risk.

Country Risk

This refers to the risk that is inherent when a country cannot meet its financial commitments (think Greece). When a country defaults on its obligations, the impact is often that of a cascading nature. That means not only will the bonds of the country be affected but also other financial assets within the country, such as the overall stock market. In addition, other countries or companies that do business with the defaulting company can also be impacted.

Foreign-Exchange Risk

Investing in foreign countries provides many advantages, especially in terms of diversification. When you invest in assets or debt of foreign countries, note that the currency exchange rates can change the price of the asset or debt. So, even though the asset increases in value when you exchange it for your home currency, you could suffer a loss. The converse is also true: the asset could go down, but when you transfer it into your home currency, you could also realize a gain.

Interest Rate Risk

This refers to the risk when a change in interest rates affects the value of an asset or debt instrument. Typically, the risk applies to bonds in a more direct fashion than it does to stocks. However, stocks, especially preferred, convertible and high dividend ones, can also be affected. With all things being equal, as interest rates increase, the value of the bond will decrease.

Political Risk

This refers to the risk that occurs when the policies of a country change, especially if it happens in a random manner. For example, if a company is selling in country ABC and that country radically changes its tax laws and becomes business unfriendly, companies that do business in that country can be adversely affected.

Key Takeaways

1) Risk cannot be avoided and needs to be understood.

2) Through proper planning and execution, you can mitigate risk and profit from it.

3) Your goal is to minimize risk and maximize rewards.

4) Even though the market rewards risk-taking, that does not imply that just because an investment is high-risk it will be high-reward. It always has been and always will be a trade off.

5) Review all your investments to make sure you understand what type of risks you have.

Tips For Selecting the Best Investment Company

October 18, 2018

technology

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In terms of making the best investment, most individuals do not know exactly where to start. Bear in mind that investing is a fierce industry. Those who are not fully aware of what they are doing might end up losing their hard-earned money. And it is for this reason that most investors would want to get help from a reputable investment company.

3 Important Factors

If you start looking for an investment company, you must determine the 3 essential factors. First, you need to clearly identify your goals. These experts cannot actually help you if you do not have a clear goal. Second, new investment must perform some research regarding the background as well as the reputation of the company they want to work with. You have to make sure that it has an excellent track record and has received optimistic reviews from other investors. And third, you need to know that kind of relationships you want with the investment firm. Determining these factors will greatly help you in boosting your chances for success.

Choosing Your Goals – Your goals will have a huge impact as to what investment firm to work with. Most people today invest with 3 goals in their minds – to increase their wealth using minimal start-up funds possible, to reduce their chances for risk or loss, and to hire experts who can capitalize on all of the great opportunities accessible to them. It is actually okay for you to have different goals; however, those goals must be clearly laid out in a list prior to choosing an expert to work with.

Perform Research – Due to the fact that most people do not invest, they do not actually know how to perform research in an investment company. Well, there are also 3 things to consider – marketing materials, public trading records, and financial statements. All of these elements will yield a larger picture of how well an investment company is doing. It is important for you to look into how the company was performing in the past 5 years. Also, observe how the group performed while the market was both down and up. These pieces of information will help you properly evaluate your options.

Consider The Brokers – Few brokers are well-known in most markets. New investors like you must familiarize yourself with the career paths of the top performing brokers. Be reminded that it is normal for brokers to change companies from time to time. You must know how the companies were performing when such brokers worked with them. Moreover, you must also be aware of how the companies performed after they have left.

Alternative Investment Opportunities Available In The Market

October 18, 2018

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Traditional ways of investing would be going to shares, bonds, mainstream property, cash, and other traditional asset classes. But there are more unusual, yet highly rewarding opportunities called Alternative investment, usually embarked on by smart investors because of the risks involved in it.

Here are alternative investment ideas ranked from safest to riskiest, that are available in market:

1. Structured products

This is basically a contract with a financial institution to pay you a defined return at a defined time depending on the performance of the stock market. It’s the safest of all the other alternative investments. The only way you could lose money is when the stock market is performing catastrophically badly.

2. Bridging finance

These are short-term loans used by property buyers who are expecting to get a mortgage from the bank but cannot wait for the approval. For private investors, you can invest in funds that pool bridging loans, in order to spread the risk across several borrowers. The loan is secured against the property.

3. Peer-to-peer lending

Investors meet with individuals or businesses who want to borrow money. Borrowers can get lower rates than they would be charged by a bank, while lenders can earn more money on their savings than they could from a cash account. It can be quite risky for the investors because the individual or the small business might default or become bankrupt.

4. Forestry

Returns from investing in woodland come from any increase in the value of the land and the trees on it, and any income produced by felling trees for timber. But increase in the value of the land is only good if you can also sell the forest. There are some excellent tax breaks in the market, with no income or capital gains tax to pay and exemption from inheritance tax if you hold your investment for two years.

5. Buy-to-let property

The property will form a large part of your overall wealth. You need to have at least 25% of the value of the property to use as a deposit, plus extra to cover any refurbishments and legal fees. Investors will likely face competition from professional landlords and may have to deal with rogue tenants and maintenance issues.

6. Stamps

Rare stamps will have value as long as there are stamp collectors. The most valuable can fetch six- or even seven-figure sums. Stamp values can keep on going higher, and you can search for offers for private investors.

7. Coins

Rare coins are best bought through a reputable auction house, which will provide a money-back guarantee should the coin turn out to be a forgery. As with stamps, the value is underpinned by the popularity of coin collecting as a hobby.

8. Winery

The traditional way to invest is through established wine merchants. You must have knowledge on fine wine and their exact records. More recently, wine funds have been launched which offer an alternative way to access the market. Some of these qualify for the Enterprise Investment Scheme (EIS).

9. Business Angels

When you become an angel, you invest in smaller companies that are not quoted on the stock market. Typically, you won’t see any return until the business is sold or floats on the stock market. It could take years, and you could either lose all your invested money, or reap triple returns.

10. Equity crowdfunding

This is very similar to business angels, but managed wholly online. Investors can either deal directly with the company and get your name on the shares, or let the crowdfunding website deal on behalf of hundreds or thousands of investors. However, if the business you invested in does well, a bigger investor may buy it.

11. Diamonds

Gemstone-grade diamonds have increased nearly tenfold in value since the 1960s. The diamond price is much less volatile than the price of gold. But it may be difficult to access for investors because diamonds are valued subjectively by experts.

12. Carbon credits

A carbon credit is essentially a permit to release one tonne of carbon dioxide into the atmosphere. Companies that exceed their allowances are supposed to buy more credits, according to global cooperation. Private investors have been targeted by firms trying to sell them carbon credits. This is a highly specialist market and best left to professional traders.

13. Land banking

Land banking companies take a piece of land, parcel it up and sell it off to investors; hoping that once the land is earmarked for development, it will soar in value. However, there is often no development and investors are left holding a useless piece of land either in the market or overseas. A lot of land banking schemes have been stopped by the Financial Conduct Authority (FCA).

Exit Strategies for Investors of Startup Businesses

October 18, 2018

technology

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Of all parts of the investment process, the exit strategy is undeniably the favorite of angel investors and entrepreneurs. The exit strategy is when a venture capitalist or entrepreneur intends to cash in on an investment.

There are different forms of exit strategies that investors and entrepreneurs to plan out in order to get that return of investment.

1. Initial Public Offer

For startup businesses, an exit strategy could be the Initial Public Offer (IPO) wherein a part of the business is sold to the public in the form of shares. This way, entrepreneurs are reimbursing investors within their own startup. Aside from that, the business gets more access to liquidity for investors and more chances to acquire other companies.

2. Mergers and Acquisitions

Startups can do well with exercising the option to merge with another company if problems with cash flow or liquidity arise. With mergers and acquisitions, the new business stays afloat and provides security among investors.

3. Private Offerings

Another exit strategy is to conduct a private offering of the business’ shares to individuals or a select group of investors to raise funds, which is more cost effective because brokers are not required. This can be done with crowd funding websites and real estate. The private offering is not registered with Companies House, and are exempt from required reporting arrangements and allows for existing shareholders to be bought out in a new fundraiser round.

4. Cash Cow

Cash cows are firms that can command a high market share in an industry dominated by low growth. They are able to sustain enough capital to stay afloat and have increased profits over the years to pay dividends to investors and shareholders by cashing in on their products.

5. Regulation A+

Regulation A+ is similar to IPO. The business owner can put your startup company on an exchange after qualifying. The entrepreneur can benefit from raising money and conforming to particular stipulations laid down by the Companies House without having to publish accounts publicly or file other mandatory paper works that would be required of an IPO.

6. Venture Capital

A good way to secure investors is to keep the cash rolling into the startup. Often, a venture capitalist would invest large sums of money into businesses and startups that are deemed worthy of note. Although this takes time for the investment to mature, it is able to provide a steady source of cash to create more investments, expand development, and attract other wealthy investors who see the potential for high returns in the future. More real estate crowd funding companies are going into venture capital.

Importance Of Investment Diversification

October 18, 2018

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“It is best not to put all of one’s eggs into one basket!” This is most likely a statement that you may have heard many times throughout your life and when it comes to investing, this statement is a reality. Diversifying one’s investments is the main factor in making a success when it comes to investing. All of the people who have made great returns from their monies have been seen to develop investment portfolios that operate in different market sectors and we advise that you should do the same too!

Developing a varied investment portfolio might include purchasing various shares and stocks that come from companies that operate in different business sectors. Methods used to achieve the desired objective may consist of buying government bonds, putting funds in money market accounts or maybe even into property i.e. buy to lets, houses of multiple occupancy [HMOs] and also the standard buying and renting out homes. The key is to invest in different market sectors.

Over time all of the data shows that those who savvy investors who take the time to develop investment portfolios that are well diversified on average experience more stable & consistent returns on their investments this is when compared to those investors who happen to put their monies in one investment vehicle. By investing in those companies that operate in different market sectors [industrial, retail, consumer, business to business etc, etc] will mean that your risk factor is lower too.

For example if you have invested all of your money in one company and that company’s shares goes down, you will lose some, a lot or all worst case all of your funds. Looking at this from another perspective if you happen to have invested in say shares from ten different companies and nine are doing well while one plunges averages say that you will still make some money or your losses will be minimized..

A good investment diversification portfolio will include a number of fundamentals e.g. they will include stocks & shares, bonds, property and of course cash!! It may take time to develop a fully diversified investment portfolio. Depending on how much you have to invest at the outset you may have to start small say only investing in cash and then go onto invest in maybe property over times.

This methodology may prove to be fine – however if you can split the investments that you make at the start – it will be a fact that your risk of losing your money will be much lower and as time passes you will see increasingly more attractive returns from your monies.

The finance experts also say that you should spread your investment monies evenly among your chosen investments targets. Put another way – if you happen to start with an investment fund of £100000 & invest £25000 in stocks and shares, £25000 in property, £25000 in bonds & then decide to invest the other £25000 in a savings account that pays a decent amount of interest.

This is the foundation to building a long term diversified investment portfolio and we see property to be one of the most tried to tested methods for delivering outstanding returns on ones investment funds.

The Investment School of Rock

October 18, 2018

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After more than three months, the market is basically flat for 2016. Oil has taken traders on a painful roller-coaster ride. And the only investment that seems to be shining still is gold with its gain of more than 15% this year.

Ask any smart investment adviser and they will all use one important word: diversification.

You don’t put all your eggs in one basket if you want to have some eggs for later.

The problem is that many investment gurus fail to tell you about some of the key options you have for preserving and steadily growing your wealth, protected from the market turmoil. (And there is still some significant turmoil on the horizon for stocks.) It’s more than just stocks and bonds. I’m even looking beyond having some exposure to precious metals.

There is one key asset that is uncorrelated to the stock market and has shown steady growth even during the Great Recession that too few investors have in their portfolios…

Collectibles such as rare coins, stamps, wine, art and comics have shown steady growth in value regardless of what’s happening in the stock market. But they are too often overlooked among investors as too complicated when it comes to using them to protect and growth their wealth. That’s why we’ve launched a service to provide valuable insight into the different aspects of the collectibles market.

Collectible Guitars

Today, I am chatting with Ted Bauman, a passionate collector with a long-standing interest in off-the-grid investments. Like many collectors, though, he has an area of chief interest – guitars.

Jocelynn: Why did you start collecting guitars?

Ted: Most collectors are either investors or players. I’m a player. In other words, I’m always on the lookout for guitars that I think will allow me to express myself in a particular way. I’ve basically narrowed my needs down to four types: Fender Telecasters, Fender Stratocasters, Gibson semi-hollow bodies and solid-body humbucker guitars. Each has its own use. The “twangy” Telecasters are primarily for classic music like blues, early rock ‘n’ roll and country. The Strats are ideal for funkier things that require a lot of tonal variation, whilst the hollow-bodies and humbucker guitars are for general use.

Only once I’m satisfied with the playability and tone of a guitar do I then start to worry about vintage, provenance, etc.

But investment collectors may look at it the other way around. They may focus on guitars that aren’t in very good condition but come from a specific year, have a rare characteristic such as an odd color or were once owned by someone famous. From there, they would make specific buying decisions within those parameters based on playability.

Jocelynn: How did you pull your collection together? Was there something you were looking for in each item?

Ted: Well, I collected most of my current guitars in South Africa when I lived there, so it was extremely hit-or-miss since the market is so small. There might be only a few dozen of a particular type of guitar in the entire country, so if I saw one for sale, I had to act quickly. That’s how I acquired the cream of my collection, my 1980 Gibson ES-335 – just saw it hanging there one day in a local music store and bought it on the spot (on installments, which they offered to professional players in those days). It is one of the first 200 of this model ever produced, as shown by the serial number and date stamp inside the body. That makes it a collector’s item.

On the other hand, in the early 2000s I started to spend more time visiting the U.S., and I bought my blonde Telecaster on such a trip. This particular guitar isn’t rare now, but it is of remarkably high quality, and I expect it to appreciate in value as the years go by. It’s one of my main playing guitars.

When it comes to Stratocasters, which I used to play exclusively but now use only occasionally, I’ve been through a whole series of them. I would play one until I found a better one, then buy the new one and sell the old one. I’m still doing that – I’m in the market for a Jeff Beck Signature Strat right now. I’m also in the market for a Paul Reed Smith Custom 24 – he was just getting started as a luthier in Annapolis when I was a kid in Maryland, where I used to visit his shop, and now he’s one of the world’s top makers! His band even played at my senior prom. The Custom 24 is considered one of the finest all-around performing guitars in the world, and Paul occasionally releases ones that are made of especially rare woods. I’m waiting for one of those.

Jocelynn: When it comes to nearly any collectible, there’s always a big concern around proper storage. How do you store them all?

Ted: I keep them in my office! I have wall hooks set up for each of them, and they hang there tempting me to stop working and play. I think that’s better for their necks – to hang from the headstock with gravity keeping the neck straight.

I have a dehumidifier in the office to keep the humidity stable, so they don’t warp. Sometimes I leave them in their cases for extended periods, especially if I’m gigging a lot.

Jocelynn: It’s important for a collector to have an exit strategy. What do you do when you want to sell your guitars?

Ted: I’m not a pure investor, so I tend to sell them to fellow musicians. I have occasionally sold them on eBay – actually you can do quite well there since you reach a global market and buyers in foreign lands are often desperate to acquire a specific guitar.

I once sold a Stratocaster to a guy in Latvia for a pretty good price. It was an early 1990s Strat Plus, a model made for only a few years, but considered a very high-quality performing guitar. I doubled my investment on that one. The sale took about a week to complete.

Jocelynn: Do you have any advice if I’m looking to start my own collection?

Ted: Decide what you’re in it for. If you want to make money as an investor, then focus on collectibles, especially older vintage instruments, such as late-1950s Gibson Les Pauls and Fender Teles and Strats. But be aware that it is a buy-and-hold market, so you have to be able to hang on to a guitar for a while until it appreciates.

On the other hand, if you’re a player-collector, like me, play as many versions of a particular guitar as you can before you buy one so you can be sure to get the one you really want. Either way, I strongly recommend working with a good dealer.

Know Your Options

Protecting your assets can feel like an uphill battle if you don’t know what all your options are. Collectibles are a great avenue for storing and growing your wealth, and you don’t have to be as involved in the collection as Ted to reap the benefits.

3 Investment Options To Top Up Your State Pension

October 18, 2018

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We all dream of having a beautiful life when we get old. Unfortunately, the state pensions aren’t enough. While this is the case it doesn’t mean that you can’t have more money at your disposal when you retire. To help you out, here are some of the ways in which you can top up your state pension:

Invest in stocks

A stock is a share of ownership of a company. When you own a share of a company you have a right of claiming company assets and earnings. The more the stocks you have, the more the ownership of a company you have. Stocks are attractive as ways of investing for retirement as they are long term. You also get to receive dividends at the end of a financial year.

While they are attractive, they also come with their fair share of risks especially if the company collapses or the shares lose value. To protect your money you need to research a lot before you invest in a certain company. There are plenty of technicalities involved with the buying and selling of stocks; therefore, to have an easy time find a reputable stock broker to handle your money. The blocker will guide you on the best company to invest in and any other intricacies involved.

It’s often said that you shouldn’t put all of your eggs in one basket; therefore, it’s wise that you spread your investment in different companies.

Try out bonds

A bond is a debt security. Bonds are attractive in that they carry a low risk compared to shares. When you buy a bond, you will be lending money to a federal agency, municipality, government or corporate entity. Upon investing in a bond you receive an interest during the life of the bond. Once the bond matures, you receive back your money.

Just like when buying shares, you need to take your time to research about them. Closely read a prospectus and gather as much information as you should.

Put your money in Real estate

The real estate sector is stable thus a great place to invest for the future. There are many ways of investing in the real estate. You can buy property for development or buy land and leave it idle for its price to rise. The trick to buying property is investing in areas that are growing fast thus your property’s value also rises fast.

Conclusion

These are some of the ways of topping up your pension. If you have the money, you should consider investing in all of the different ways for a comfortable future life.

What Is an Investment?

October 18, 2018

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One of the reasons many people fail, even very woefully, in the game of investing is that they play it without understanding the rules that regulate it. It is an obvious truth that you cannot win a game if you violate its rules. However, you must know the rules before you will be able to avoid violating them. Another reason people fail in investing is that they play the game without understanding what it is all about. This is why it is important to unmask the meaning of the term, ‘investment’. What is an investment? An investment is an income-generating valuable. It is very important that you take note of every word in the definition because they are important in understanding the real meaning of investment.

From the definition above, there are two key features of an investment. Every possession, belonging or property (of yours) must satisfy both conditions before it can qualify to become (or be called) an investment. Otherwise, it will be something other than an investment. The first feature of an investment is that it is a valuable – something that is very useful or important. Hence, any possession, belonging or property (of yours) that has no value is not, and cannot be, an investment. By the standard of this definition, a worthless, useless or insignificant possession, belonging or property is not an investment. Every investment has value that can be quantified monetarily. In other words, every investment has a monetary worth.

The second feature of an investment is that, in addition to being a valuable, it must be income-generating. This means that it must be able to make money for the owner, or at least, help the owner in the money-making process. Every investment has wealth-creating capacity, obligation, responsibility and function. This is an inalienable feature of an investment. Any possession, belonging or property that cannot generate income for the owner, or at least help the owner in generating income, is not, and cannot be, an investment, irrespective of how valuable or precious it may be. In addition, any belonging that cannot play any of these financial roles is not an investment, irrespective of how expensive or costly it may be.

There is another feature of an investment that is very closely related to the second feature described above which you should be very mindful of. This will also help you realise if a valuable is an investment or not. An investment that does not generate money in the strict sense, or help in generating income, saves money. Such an investment saves the owner from some expenses he would have been making in its absence, though it may lack the capacity to attract some money to the pocket of the investor. By so doing, the investment generates money for the owner, though not in the strict sense. In other words, the investment still performs a wealth-creating function for the owner/investor.

As a rule, every valuable, in addition to being something that is very useful and important, must have the capacity to generate income for the owner, or save money for him, before it can qualify to be called an investment. It is very important to emphasize the second feature of an investment (i.e. an investment as being income-generating). The reason for this claim is that most people consider only the first feature in their judgments on what constitutes an investment. They understand an investment simply as a valuable, even if the valuable is income-devouring. Such a misconception usually has serious long-term financial consequences. Such people often make costly financial mistakes that cost them fortunes in life.

Perhaps, one of the causes of this misconception is that it is acceptable in the academic world. In financial studies in conventional educational institutions and academic publications, investments – otherwise called assets – refer to valuables or properties. This is why business organisations regard all their valuables and properties as their assets, even if they do not generate any income for them. This notion of investment is unacceptable among financially literate people because it is not only incorrect, but also misleading and deceptive. This is why some organisations ignorantly consider their liabilities as their assets. This is also why some people also consider their liabilities as their assets/investments.

It is a pity that many people, especially financially ignorant people, consider valuables that consume their incomes, but do not generate any income for them, as investments. Such people record their income-consuming valuables on the list of their investments. People who do so are financial illiterates. This is why they have no future in their finances. What financially literate people describe as income-consuming valuables are considered as investments by financial illiterates. This shows a difference in perception, reasoning and mindset between financially literate people and financially illiterate and ignorant people. This is why financially literate people have future in their finances while financial illiterates do not.

From the definition above, the first thing you should consider in investing is, “How valuable is what you want to acquire with your money as an investment?” The higher the value, all things being equal, the better the investment (though the higher the cost of the acquisition will likely be). The second factor is, “How much can it generate for you?” If it is a valuable but non income-generating, then it is not (and cannot be) an investment, needless to say that it cannot be income-generating if it is not a valuable. Hence, if you cannot answer both questions in the affirmative, then what you are doing cannot be investing and what you are acquiring cannot be an investment. At best, you may be acquiring a liability.

How to Take Good Beach Photos

October 18, 2018

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When you play at the beach, you must want to take some good pictures to keep the happy moments. When the sexy bikini is showing your charming figure, the wide beach hat is highlighting your elegant temperament and the sunglasses is featuring your mysterious smile, you are happy like a baby. But most importantly, you are having fun with your loved family or friends. So undoubtedly, you want to keep such beautiful memories in mind for a longer time. There is another easy way: taking wonderful pictures. However, not everyone is good at making all kinds of nice poses in front of the camera. Don’t worry, this article will suggest some very simple but really nice poses to you.

Recommendation 1: You can ask your traveling companion who is holding the camera to capture your turning around moment with a big smile and looking straight at the camera. Capturing the exactly turning moment is the key to make this pose successful, which requires privity between you and the photographer.

Recommendation 2: Back facing the camera, you can fondle your hair with your left hand and take your large brim hat with the right hand. Your should face towards the direction of the wind at beach, so your hair and brim hat will sway like dancing along with the wind. What a beautiful moment that would be!

Recommendation 3: When the sunshine become soft at dusk, you can capture the scene when the sun is sitting in the horizon of the sea. Stand on your toes and ask your partner to squat, with the sunset ornament your body, you would become part of the beautiful sight.

Recommendation 4: You can make a good use of the sands. Sands can be the easiest tool for taking beach photos. Actually it can be very useful for many poses. Today I recommend you this simple one: just fiddle up the sands and shoot the exact moment when they are spreading down, PS with a nostalgic grounding color, your eyes won’t want to leave such a picture in the photo albums.

Recommendation 5: You can also lie down at the beach to let your companion take the photo from your head side. With both of your hands at the wide brim beach hat and kneels stay higher than your head, you can make a lovely photo pose. The hat is better being white, the same color with the clouds, or blue, the same color with the sky and the sea.

All in all, a nice wide brim hat is a good helper to take beautiful beach photos. Welcome to see such hats of new designs in Newchic. They are my inspirations of this articles.