Looking to get rich next year? Unfortunately nobody becomes rich overnight.
Those “overnight successes” we see are normally the results of years and years of hard and deliberate work. The good news is that when it comes to building wealth there are no secrets.The same set of principles will work for absolutely everyone! If you’re willing to put in the work and make the sacrifices one fine day you can be sure of making your dream come true.
Would like to share few Tips or Suggestions to become rich not overnight but over years.
Avoid Speculation
Distinguish between investments and speculation. It is advisable to avoid speculation. If you decide to speculate, Benjamin Graham tells us to speculate only with a separate small portion of your capital. Don’t risk money you can’t afford to lose. When you’re investing for the long term don’t speculate!
Private Equity Funds are for High Net Worth Individuals Only
Private Equity Funds invest in under-performing companies or Start-up companies that have the potential for high growth. They work with the company’s management and make strategic decisions to improve the company’s performance. If the company turnarounds and does well, the Funds exit by selling their stake at a premium and you make huge profit. But if the company fails or does not improve, you may lose your capital. Risk your money only if you can afford to lose it.
Look at the Quality of a Company’s Management
You can tell a lot about a company by looking at the team who manages it. Its better to buy the company that have high qualities for management such as integrity, conservative accounting, accessibility and good long-term outlook, openness to change, excellent financial controls, and good personnel policies. We must place great emphasis on looking at the quality of a company’s management. Keep this in mind when you’re choosing your investments.
Don’t Buy Illiquid Shares
Trading Liquidity, a ratio of the average daily trading volume and the shares outstanding, indicates demand and supply of the stock. While blue chips shares have generally high trading liquidity, shares of companies with small capital or small free float has low liquidity. You may not find buyers or correct price when you need to sell them. Try to avoid illiquid shares even your best friend suggest you to do so.
Invest In Companies With New Products And Services
A good way to pick winning investments is to be on the look for companies that are leaders in their field. Identify the companies which are developing new products or discovered new markets. Before new competitors enter into the market, the company may establish its dominance and the value of your investment will grow. Keep your eyes open for investments like these.
Will share some more in my next blogs, till then…
Happy Investing!
R♥Vi
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