Investment Rule Number 1 (ROI)

In Investment Rule Number 1 we learnt to look for  the return or money that we will be paid from our investment.
Ideally that will be paid to us via our bank account upfront on the very 1st Day (R.0.I.). That’s our reward so we can spend the money now or save it to reinvest again next month. If we were paid at the end of the month or year and the return is a higher interest paid than the bank then that is also O.K. The point is Investment Rule Number 1:  You must Know your Return on your Investment upfront DAY 1 (R.O.I.) from the very first day is the ideal way. No if’s and No butts.

 

Investment Rule Number 2 Risk.

How much risk am I prepared to take to earn this money. Remember the higher the return the higher the risk. Now if I went to the casino tonight and placed $100.00 on the card table and thinking I will get back $125.00, who is taking the risk?  I happen to know the casino staff need to be paid and the free drinks (someone pays for them to) and the casino also has 
to make a profit then you’ll see I’m taking the risk big time. Not only the extra $25.00 but I could loose my $100.00 as well.
I am not prepared to loose every thing just to make $25.00. That is my risk profile. It’s also Gambling. Investment Rule Number 2:  You must know your RISK Profile on your investment upfront DAY 1.

Investment Rule Number 3: 

Recession-Proof. I use to own a very big Kenworth truck(Prime Mover) and subcontracting to a large freight company.
A lot of the freight was food and drinks(Water, wine and cool  drinks etc). When times are tuff or a country is in a recession, money is hard to borrow and food is expensive. Investments can also suffer from these condition. We aim to continue to invest  with our risk profile as our guide. Investing in or with companies that are not caught up in the recession condition. People will always need to eat and drink no matter how costly it may be and when you know what the needs are then you know that this area may be a  safe place to invest short/medium term. What are we looking for, Cash flow. Cash is good, cash is cool and cash is King.
Remember Investment Rule Number 3:  It must be Recession-Proof. The ability to generate CashFlow.

Investment Rule Number 4: :  You must be able to Redeploy your Investment.
You must be in control of your Investment. If the share market crashes or interest rates increase wildly be prepared.
Sometimes you need to take action, make changes, adjust or sell. You do what ever you need to do to protect your position.
With a financial education you understand and know how to control your investment. Assign to a new position.
Rule 4 is You must be in control of your investment. My rule 4:  You must be able to Redeploy your Investment.

Investment Rule Number 5: Roaming anywhere
The last “R” Rule. You must be able to generate CashFlow on your Investment anywhere in the world.
Meaning if I own and operate a business sometimes I can’t just take off for a short trip or holiday. I’m locked in or a prisoner to my own business. Most people have a “iphone” and as long as you have a signal and internet connection
you can do business. Check your positions if in the share market, redeploy etc etc. When you leave for holidays your phone company has roaming rates, meaning you are wandering around the world. 
Now my last Rule Number 5: You must be able to generate CashFlow on your Investment Roaming anywhere in the world

 

3R's at School and 5 R's of investing
3R's at School and 5 R's of investing