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The Perfect Investment

We’d all love to find that perfect investment, the one that turns a modest outlay into a handsome profit. There is a stack of advice on offer for the potential investor, much of it, unfortunately, beyond the understanding of the average person whose financial expertise is often limited to the home budget and balancing the monthly bank statement. Unscrupulous wheelers and dealers play on this, presenting their get-rich-quick schemes in terms so simplified that anyone can comprehend them. Investment consultants warn us to see them first before parting with our cash, claiming they can steer us in the right direction. And the banks are always eager to make our money work for us in a safe, mutually beneficial way. Do we take notice of any, or none? Seeing these institutions and individuals on TV having their scams exposed would seem to suggest that investing in anything with anyone is for suckers.

That might be true if we jumped in blindly. But it doesn’t take a mathematical genius to figure out how many beans make five. It’s just a matter of taking time to fully explore an investment opportunity. If it suits the budget and appears to provide more at the end than the initial outlay, it might still be worth a closer look. The prospective investor just has to remember that nothing is for nothing. Then, the experience could be both exhilarating and profitable.

The most important fact about any investment is the risk. Be aware that, in most cases, you are giving your money to a complete stranger and expecting them to do the right thing by you. Before you hand over a single cent, open your eyes to the possibility of a rip-off. Do your research into the background of the person or institution you may be conducting business with. Are they well-known, a national icon, or a new boy on the block? Think about what attracted you to them – the presentation of their product, an endorsement by a familiar personality, maybe the encouragement of a friend who has already turned a profit. Did you receive a glossy prospectus in the mail outlining an offer you’d be a fool to refuse?

You’ll only be one if you take the bait unthinkingly. Consider the options and make a “safer-than-most” list. Continue to bear in mind that there is no such thing as sure-fire. Any investment is a gamble. If someone tells you different, especially if they claim to be an expert, ask why they’re bothering to advise you, a financial nobody, instead of laying back enjoying the millions they should have already made for themselves by being so money-making-marvellous! Whatever advice you take on board, or not, from whichever source, you must eventually make up your own mind and take responsibility for the outcome, win or lose.

There’s that thought again – LOSING! Seriously, if the prospect of loss horrifies you and you know you can’t afford it, don’t bet! Assuming, however, that you still think it might worth a go, how much do you put up – all of your nest-egg? Please don’t! Set some of it aside for that rainy day. It will certainly come if you don’t cater for it. This will diminish your potential stake somewhat, and there’s more to come. As with any investment, there are always the hidden extras involved – establishment fees, account-keeping fees, brokerage, Federal and State taxes which include those to be deducted from the profits, assuming you make any. Allow a contingency factor of at least 10% to 15% to cover unforeseen expenses.

Your total investment capital will now be considerably smaller. Because of this, some doors may already have closed and the resulting disappointment will tempt you to re-evaluate. Ignore it. Stick to your guns. Leave the rainy-day surety alone, and don’t cut back the contingency. Just look at the remaining opportunities within your range and pick the ones that are best for you and your circumstances. And if they seem hardly worth considering, leave your money in the bank until something affordable comes along that is.

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