I woke up yesterday morning with a lot of adrenalin pumped in my veins. It’s one of those nightmare feelings, but it wasn’t really a nightmare. It’s one of those feelings I’ve had before, for similar reasons, but it was really shocking that, this part of my life would replay itself again so terrifyingly.
I had a dream that I was back in school. It was as if I had been on break all the while, and now I was back to school and had no clue which courses I had registered for, I hadn’t been reading and exams were ahead. In that dream, I could see clearly the faces of some of my old classmates, I asked one of them (Ope Onifade) if I could be his reading partner, to at least figure out where the courses started and what I was expected to know. I saw one of my classmates sleeping (Sile Babayeju of course with Folusho, his Met and Mat friend) and asked him why he was sleeping, he told me that it was Saturday and he was prepared for the exams. I had no notes, no textbooks, not even sure what we were supposed to prepare for. I ran into a lecture hall, couldn’t make sense of what was being thought, I ran out. By this time, my brain was racing fast to catch up with my blood circulation. I had made an investment that will keep me awake at night.
I told a former school mate about this dream, and he reminded me that wasn’t that close to what I did in school? It wasn’t that bad. People that knew me can bear witness here. 😉
In making investments, there are a few long lasting tips to put in mind. Different people have different risk limits, these depend on their age, their stage and their wage. Didn’t mean to rhyme like that believe me, it just happened 🙂
1. Don’t invest what will keep you awake overnight or what will stress you while waiting. How you measure high risk is how you feel between putting your money in there and taking it out. You don’t need to make your life stressful because of the prospects of high returns. Follow your heart, but use your head. A good acid test for any investment is “can I sleep at night?”
2. Start Early! This is in two ways. Start at an early age, and once you have analyzed it and you are comfortable with it, start early. Einstein is reported to have said that compound interest is the greatest invention of man. The more the years you have to play with the more the wealth you can create.
3. Invest in companies that you know. Companies that you have grown to know are still alive because they are being well managed, when the chips are down, who you gave your money to is the management of the company you invested in. Can you trust them with your money?
4. Buy and sell when you are young, buy and hold when you are old. When you are young, you are agile and fast, you can act quickly at the slightest prompting, when it begins to plummet sell, when it’s at the lowest buy. When you are older, just buy and hold, the highs and the lows even out.
5. 10% of what you have is yours to save. If you eat all you earn you are a fool. Sorry, but I mean it. 10% of what you earn ought to be your seed, your seeds have potentials to reproduce for you, and it’s not a matter of the size of the seed, it’s a matter of it’s quality. No matter how small your income is, your seed has potentials like a mustard seed, to grow bigger than the mango seeds. It doesn’t matter if you work with a high paying company or a small paying one, what matters is your discipline in saving your seed.
6. Diversify. Balance your risks. Don’t put all your eggs in one basket, except you are the one guarding the basket. Balance your risks. The balancing of your risk is also a function of your age. Younger? You should have a higher risk propensity, know when you are growing though; signs of growth are permanent relationships, children, mortgage, e.t.c.
7. Be cautious of high yield investments. If an investment promises much more than the market delivers, research it. Talk to the head of the organization, find out why they are not using the banks, find out what they are into. Ask around, make sure they have produced results and are young. Smell it to see if it smells like ponzi, don’t bother to taste it.
There are tons of investment tips in books all over, read them, understand the dynamics of the country you operate in. Someone once said if you are interested in a topic, you should have read books about that topic amounting to a number equal to your age. Are you serious about investing? Then read far and wide.
I wish you all the best as GFS goes live today! Here