What Investing Is and Why It Is the Key to a Stable Financial Future

An Acceler8now.com Investing Education Resource July, 2007

Just in case 'investing' sounds more like a catch-phrase without a clear-cut meaning to you, let me lead you through a basic explanation of that powerful, life-defining word. See how I've put it? That's because I want that word to carry so much meaning with you and be one of the key pillars of your life. Almost on the same plane with salvation. If you understand the principles of investment and apply them wisely, you can be sure of a not-too-traumatic financial experience. That's being modest really, because at the other extreme, you could really get very wealthy. At least, you ought to be financially comfortable.

Investing is Sowing
We use the word 'invest' ordinarily to symbolise a sacrifice made for a benefit. That's why you invest in study to gain knowledge and advance your life. You invest energy and time in the production of a craft so you could sell it for money. That's why you toil in the farming season, in the expectation of food at harvest-time. In each case, you make a sacrifice and you expect a reward, an improvement in your situation. You simply sow, so you can reap. That's how investment works. It is however used here in the context of financial investment which deals with investing in financial assets or securities. These securities include stocks, bonds, mutual funds, bank CDs, treasury bills, savings accounts, etc. The same feature of immediate sacrifice still applies: each time you have to invest, you certainly deny yourself of some immediate pleasure of a good or service you could spend money on and have immediate fun. Or even a really important benefit. This sacrifice or self-denial is possible because you expect a future benefit: more money at the end of the day. You are saying in effect that you can deny yourself now, so that you can have money resources to enjoy more tomorrow.

Investing deals necessarily with the future. When you invest, you are staking on benefits that will come tomorrow. This clearly introduces an element of risk, since you can never be absolutely sure of the future. That's equally why you need to learn lessons in investing, so you can close down the gaps that can cause losses. Or learn how to cope with them and still come out successful. So, investing time and effort to read the notes you have here (you see 'investing' in action again!) is a sacrifice that should pay back. It should help you get into the business more clear-headed and better prepared for the challenges that are part of the game.

Investing is a Powerful Key to Financial Fortune
Wanting to invest, for a start, forces you to save. You cannot invest unless you set aside some resources for this purpose. If you think saving will happen naturally, on its own, forget it! You will burn every kobo and possibly end up a pauper. You need to compel saving. The reason it is so is that there is always overwhelming pressure from all the important and not-so-important needs and demands that present themselves everyday. You will hardly have 'spare' money because you cant' meet even the pressing needs. Because they are current, their influence is domineering. That's why savings will tend to take a back seat, unremembered. Now, this is not good for you. That's why another domineering force needs to be injected into your life. Investing and the beneficial results it yields can be nurtured to the level that it becomes so powerful a force as to easily displace unprofitable spending. That's what you need: push investing to the fore, let it gain enough space and let your spending recede more and more to the background (where investing was). In effect, pay yourself first, putting money into what best serves your ultimate interest, before attending to these other needs as much as you can still accomodate.

Investing Creates Any Army of Income-Earners
That's the beautiful part. You could choose to work alone: earn money, spend money, work the more to earn more, spend the more and remain in a vicious cycle of toil and want. What's more, it could get to where you can't work anymore because your strength has failed you: old age, illness, accident, etc. That simply spells 'no income' and furthermore 'hunger and starvation'. What if you endured a bit now and concentrated more on building a powerful army of income-earners that will work for you, most-likely, for life? That's what happens when you invest. You put your money to work to earn more money for you. Every naira you invest, all things being equal, will earn multiples of naira and those multiples will further join your work-force, earning more naira - on and on, that way. Life couldn't be better. It gets to a point where you possibly work for fun, because you have deployed enough 'hands' to work for you. Wouldn't that be a wonderful experience for you?

Okay, I know you will think it sounds too rosy to be true. But that's the mistake people who don't understand the workings of this process will always make, to their peril. Everything written here could happen to you, depending on the dimension of action you take. You can choose to liberate yourself today and take a more purposeful approach that will make life more meaningful and less traumatic! If you choose to do so, then go ahead to read the other materials in here because you need preparation for this important and highly rewarding mission.