Investment Central - Welcome

How do you build wealth to ensure your future financial security? Invest. Investing is unarguably one of the best ways to achieve wealth-building success and financial independence. The reason is simple: investing opens you to opportunities to leverage your income to rapidly expand your earning capacity and grow more wealth. That's why every wealthy person will invariably speak of successful investments that helped him get rich. If you don't invest, your financial growth will be limited.

The multiplier effect of putting each kobo you can to work for you and generate 'off-spring' is the magic to financial success. That replicated growth is what readily drives up your financial capacity. That process of putting part of your income into your prosperity work-team is the investment. That power of duplication, when properly harnessed, easily has the potential to grow you steadily and progressively into a financially strong future. This is instructive: Mr Warren Buffett, acclaimed investment guru, earned his way up into the global top league (second-richest in 2006 by Forbes rating), just by investing. It simply shows the possibilities.

What do investors invest in? Mainly financial assets. They invest in stocks, for instance. Stock investing remains a popular approach to wealth-building, notwithstanding the fluctuations and cycles the stock market experiences. Stocks hold a lot of potentials for huge returns, because of the possibility of staggering capital appreciation, though the potential for loss is also as high. Investors who buy stocks are taking a stake in the companies that own the stocks. By buying the shares (stocks) of a company, an investor become a part-owner of that company, in a position to share in its fortunes in proportion to him investment. In effect, stock investing is one short-cut, and a clever approach, if you like, to owning good companies.

Investors also buy bonds. Bonds provide balance to the investment portfolio because they boast different features and characteristics from stocks. Bonds represent acknowledgement of the indebtedness of the issuing institution. In effect, investors who buy bonds lend money to the issuer, usually a company or the government at Federal, State or local level. Bonds consequently guarantee a fixed income, paid at intervals and a repayment of principal at maturity.

Investors also buy treasury securities and money market funds. These are short-term investment outlets that bring a measure of liquidity into an investment portfolio. Treasury bills, for instance, can be very short-tenored. So are bank deposits.

An investor may also choose the vehicle of managed funds (mutual funds) to pursue his investment objectives. He may, for instance, put part of his investment portfolio into mutual funds, managed by fund managers, while investing a part directly. That possibly allows him compare his personal results with the performance of the fund managers to see where to lean more. Besides, investing in managed funds has its attractions, which is why mutual funds command some attention.

Property investment is also a potentially profitable option. Real estate investment has made its mark as a major source of wealth, over the ages. The reason is basically that shelter is a key requirement of human life and property remains in sustained demand for residential or business purposes. Making money in property will remain a strong potential, even though the property market may experience swings like the stock market. Those looking for a rounded investment portfolio will always consider a stake in the real estate market.

Yet, investors also invest directly in business. This requires conceiving, developing, initiating and building a business(es). Business-building is tough, but is known to offer a great potential for wealth-building. If your business proves widely successful, you not only make a lot of money, but generate the cash flow to diversify into other investment assets.

These investment channels are not mutually exclusive. They are often blended into one basket or investment portfolio. The process of selecting what to investment in and in what proportion, called asset allocation, is part of the basic process an investor has to manage properly.

As you see, investing has dimensions and getting to understand these and how they work is the first step to getting a foothold into this life-changing endeavour. Easily get up to speed on this by tapping into the huge and growing resource base provided here, just for your benefit.