Young People - A.I (Part3)

What kind of investment should one do?

Do you just buy yourself a dream car?

Should you just invest everything you have? 

Part 3 of Young people articles tackles the allocation of investments(A.I).

ALLOCATION OF INVESTMENTS (A.I)

This is the far most important activity that investors must undertake before committing their monies.

When one is into investment, be it shares or running business, the main purpose is to get returns that is suppose to uplift that individual economically. In A.I one has to strike a balance between risks and rewards. '' Don't put all your eggs in one basket.'' As an investor one should take a moment and ponder on priorities in his/her life. This is simply achieved by counter-checking with a working budget (complete and functional one).

There are three categories of Investment Allocation :

1. Fixed Income Investments

2. Varying Income Investments

3. No Income Investments

   

• Fixed Income Investments

These are types of A.I that deliver predictable returns, no matter the economic situation. This type of investment has the highest security and can be used to facilitate the basic needs of an investor comfortably.

An investor makes allocation for this kind of investment so as to get constant returns(to cater for house, education, food, cloths etc). With such A.I one is safe and sure of the basics needs are always covered. A 'trouble-free' investor will be able to develop more, economically.

Minimum of 60% of the total investment.

Examples : Bonds and debentures, insurance, even a home.

• Varying Income Investments

These are types of A.I that can give you good returns, no returns and even a loss. This type of investment has little if not no security at all and thus cannot be depended upon to cater for crucial needs. Investors use this kind of investment to try their luck, experiment or even just to achieve a certain goal that isn't economically.

This kind of A.I is 50-50 one can gain a great deal of even lose a great deal hence the allocation should be moderate.

Maximum of 30% of the total investment. 

 Examples: Starting a business, trading in shares, currency trading etc

• No Income Investments

This category of A.I that delivers nothing in returns and neither does it improve the economic situation of the investor. They are usually carried out to improve the social status of the investor or to fulfill a dream.

Maximum of 10% of the total investment.

Examples: Buying a second car/home, changing T.v. Set, remodeling the house etc.

Conclusion

''There are only two words that will always lead you to success. Those words are YES and NO. Undoubtedly, you’ve mastered saying YES. So start practicing saying NO. Your goals depend on it!''

Jack Canfield