If you want your money to grow faster than the rate of inflation over the
long-term, and you don’t mind a bit of a roller-coaster ride from time to time
in your investments’ values, ownership investments are for you. Ownership
investments are those investments where you own a piece of some company or
other asset (such as stock, real estate, or a small business) that has the ability
to generate revenue and, potentially, profits.
If you want to build wealth, observing how the world’s richest have built
their wealth is enlightening. Not surprisingly, the champions of wealth
around the globe gained their fortunes largely through owning a piece (or all)
of a successful company that they (or others) built. Take the case of Steve
Jobs, co-founder and chief executive officer of Apple Inc. Apple makes computers, portable digital music players (such as the iPod and all its variations),
mobile communication devices (specifically, the iPhone), and software,
among other products.
long-term, and you don’t mind a bit of a roller-coaster ride from time to time
in your investments’ values, ownership investments are for you. Ownership
investments are those investments where you own a piece of some company or
other asset (such as stock, real estate, or a small business) that has the ability
to generate revenue and, potentially, profits.
If you want to build wealth, observing how the world’s richest have built
their wealth is enlightening. Not surprisingly, the champions of wealth
around the globe gained their fortunes largely through owning a piece (or all)
of a successful company that they (or others) built. Take the case of Steve
Jobs, co-founder and chief executive officer of Apple Inc. Apple makes computers, portable digital music players (such as the iPod and all its variations),
mobile communication devices (specifically, the iPhone), and software,
among other products.
Every time I, or millions of other people, buy an iPad, iPod, iPhone, and so on,
Apple makes more money (so long as they price their products properly and
manage their expenses). As an owner of more than 5 million shares of stock,
each of which is valued at about $300 per share, Jobs makes more money as
increasing sales and profits drive up the stock’s price, which was less than
$10 per share as recently as 2004.
In addition to owning their own businesses, many well-to-do people have
built their nest eggs by investing in real estate and the stock market. With
softening housing prices in many regions in the late 2000s, some folks newer
to the real estate world incorrectly believe that real estate is a loser, not a
long-term winner. Likewise, the stock market goes through down periods but
does well over the long-term.
Apple makes more money (so long as they price their products properly and
manage their expenses). As an owner of more than 5 million shares of stock,
each of which is valued at about $300 per share, Jobs makes more money as
increasing sales and profits drive up the stock’s price, which was less than
$10 per share as recently as 2004.
In addition to owning their own businesses, many well-to-do people have
built their nest eggs by investing in real estate and the stock market. With
softening housing prices in many regions in the late 2000s, some folks newer
to the real estate world incorrectly believe that real estate is a loser, not a
long-term winner. Likewise, the stock market goes through down periods but
does well over the long-term.
And of course, some people come into wealth the old-fashioned way — they
inherit it. Even if your parents are among the rare wealthy ones and you
expect them to pass on big bucks to you, you need to know how to invest
that money intelligently.
If you understand and are comfortable with the risks and take sensible steps
to diversify (you don’t put all your investment eggs in the same basket),
ownership investments are the key to building wealth. For most folks to
accomplish typical longer-term financial goals, such as retiring, the money
that they save and invest needs to grow at a healthy clip. If you dump all your
money in bank accounts that pay little if any interest, you’re likely to fall short
of your goals.
Not everyone needs to make his money grow, of course. Suppose that you
inherit a significant sum and/or maintain a restrained standard of living and
work your whole life simply because you enjoy doing so. In this situation,
you may not need to take the risks involved with a potentially faster-growth
investment. You may be more comfortable with safer investments, such as
paying off your mortgage faster than necessary.
inherit it. Even if your parents are among the rare wealthy ones and you
expect them to pass on big bucks to you, you need to know how to invest
that money intelligently.
If you understand and are comfortable with the risks and take sensible steps
to diversify (you don’t put all your investment eggs in the same basket),
ownership investments are the key to building wealth. For most folks to
accomplish typical longer-term financial goals, such as retiring, the money
that they save and invest needs to grow at a healthy clip. If you dump all your
money in bank accounts that pay little if any interest, you’re likely to fall short
of your goals.
Not everyone needs to make his money grow, of course. Suppose that you
inherit a significant sum and/or maintain a restrained standard of living and
work your whole life simply because you enjoy doing so. In this situation,
you may not need to take the risks involved with a potentially faster-growth
investment. You may be more comfortable with safer investments, such as
paying off your mortgage faster than necessary.
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