$ What Is Investing?- investment clubs training talking points zambia

 

To invest is to acquire an asset (something that has value that will produce income or appreciate in value and when liquidated, will realize more than was spent in acquiring it). 

Investing is the commitment of money or capital to purchase assets in order to gain profitable returns in form of interest, income, or appreciation of the value of the instrument. To invest is related to saving or deferring consumption, BUT with the aim of that money so saved and not consumed being used to bring more money. Robert Kiyosaki taught, ‘to invest is to mind my own business.’

I need to start investing today. I need to start investing now. I will remind myself, ‘Anytime is time for investment. Time for investment is anytime. Time for investment is now.’

Investment clubs are formed by people who want to invest. ‘The social responsibility of business is to increase its profits’ so said Milton Friedman, the great economist and Nobel Laureate. He repeated, ‘The business of business is business.’  The purpose of clubs is to make money, not welfare. An investment club is a business. We must make money, otherwise, the members reading our annual report might say,

‘I see we have become a non-profit organisation.’

Investing will be most rewarding when businesslike. It is not just a hobby but an actual business venture where I will be working together with other people on investing our money. An Investment club is formed by people in the business of investment; people who want to make money. The clubs provide venues for training and education of members in the ways of the business world. Club members help each other out, and so they enjoy more security in their investments.

Some investments that members engage in include purchase of land with intention to sell at a profit, shares, rental property, businesses etc.  Investment clubs are run in a democratic fashion.  Members, as a collective, elect their officers.  They also vote on stocks, bonds or securities that they want to purchase, how many they want to buy, whether or not they want to sell, whether or not the interest rate is conducive to a comfortable amount of growth. 

There should be an understanding established of what amount of the profits that are realized from investments are going to be held and which amount is going to be reinvested immediately back into the stock market.  Investment clubs are dedicated for those who are looking for a secondary income or for those, who want to get FINANCIAL FREEDOM and FINANCIAL INDEPENDENCE.

€       Investing Is Not Gambling

Investing is not gambling. Gambling is putting money at risk by betting on an uncertain outcome with the hope that I might win money. True investing does not happen without some action on my part. A ‘real’ investor does not simply throw his or her money at any random investment; to be a real investor I must perform thorough analysis and commit capital only when there is a reasonable expectation of profit. Yes, there still is risk, and there are no guarantees, but investing is more than simply hoping Lady Luck is on my side. Investing is not a get-rich-quick scheme.

 

 

$       Why Bother Investing?

 

€       Investing Makes Me Rich

People invest because they want to increase their personal freedom, sense of security and ability to afford the things they want in life.

When people invest, they spare money to offset the effect of inflation on idle cash as well as to benefit from an additional source of income and capital appreciation. Everybody wants more money. The only way to be rich is to invest and have assets. King Solomon knew it several millennia ago when he wrote, ‘the rich man’s strength is in his city’. The rich man’s city is his assets. The rich do not work for money.

An asset is any item, of value, usually purchased, or equivalently a deposit is made in a bank, in hopes of getting a future return or interest from it. An asset is expected to give returns without any work on the asset.

Riches protect the rich from pestilence of poverty. All rich people have assets. Whether they inherited it, married into it, won it, borrowed it, created it, or (God forbid) stole it, they all have assets.  Assets leverage time and effort, so that money comes passively, even when the investor is not working.

€       Investing Makes My Money Work For Me!

The rich work to build assets that will make money work for them. I need to invest. I need financial foundation. And without financial foundation, I will be poor, broke and miserable. Investing is the science of money making money. As Benjamin Franklin rightly noted,

‘Money makes Money, and the Money that Money makes, makes more Money.’

Investing is about making my money work for me. Investing means putting my money to work for me. Essentially, it is a different way to think about how to make money. Growing up, most of us were taught that we can earn an income only by getting a job and working. And that is exactly what most of us do; but there is one big problem with this: if we want more money, we have to work more hours using more effort. However, there is a limit to how many hours a day we can work, not to mention the fact that having a bunch of money is no fun if we do not have the leisure time to enjoy it.

 

€       Investing Leverages Time and Effort

Since we cannot create a duplicate of ourselves to increase our working time and effort; we need to send an extension of ourselves - my money (and hence time and effort) - to work for us. This is called investing, ‘putting our money to work for us’. ’That way, while we are putting in hours for our employers, or even mowing our lawn, sleeping, reading the paper or socializing with friends, we are becoming rich because our money is making more money for us elsewhere. Quite simply, making my money work for me maximizes my earning potential whether or not I receive a raise, decide to work overtime or look for a higher-paying job.  This leverages my time and effort, giving me more hours and effort I would have had alone.

€       Taking Control of My Finances

Taking control of my personal finances will take work, and, yes, there will be a learning curve. But the rewards will far outweigh the required effort. Contrary to popular belief, I do not have to allow banks, bosses or investment professionals to push my money in directions that I do not understand. After all, no one is in a better position than I am to know what is best for me and my money.

Investing is one of the major 'missing pieces' in many financial education programs. I am taught about saving but not about investing in assets that will produce passive income for me. Saving to purchase an item he really wants is not as difficult as it may seem at first if I use a system, and it feels great when I do reach my savings goals. I will always have money for continued education. I am less likely to develop the habit of feeling guilty for spending my own money; an emotion many adults suffer from.

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ZANAICA is promoted and hosted by Twende, an on-demand platform and Zambia’s first superapp, that also offers motorcycles (bodabodas) and tricycles (tuktuks), on lease to own, hire purchase model. Twende promotes investment clubs as an initiative to promote savings and investment culture in Zambia. To get free investment club training, do not hesitate to contact us on facebook at https://wa.me/+254103242604, or https://chat.whatsapp.com/HNosGG0OmdWHvXnFHVSLoh or email us at zanaica@twende.store or visit Twende offices at Manda Hill, Plot 271/C.

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