Laws of Riches Part V

Grow your wealth

I have always believed that in this modern age, to make money you need two things; one is money, and the other is time. Rich people don't look at money as money....they look at it like a seed that would sprout and grow to a tree that produces more seeds and hence more trees.The trick is the WAY you grow these trees.

Everyone understands how putting all your money in a bank is a dumb idea as inflation devalues your money right under your very nose.Enough said.

LAW FIVE : START INVESTING

After setting aside reserves for emergency, money then should be invested. There are many different kinds of vehicles that could grow your money for example,

1) Bonds
2) Unit trusts or ILPs
3) Stocks
4) Commodoties
5) Property
6) Currency
7) Business

Which investment vehicles you choose depends on the your level of appetite for risk and affordability. However even before you invest please understand what you doing,make an effort to learn as it is your money. What your investments can do for you in the long run is that they can generate returns which can greatly improve your financial position. Here is how....

Lets say for example you have invested $1000. Say your return on investment is 10%. You have made $100.Great! Now imagine you have $100,000 invested. Your return is still the same 10%. Now how much have you got? $10,000! This is called the compounding effect. AlbertEinstein called compound interest "the greatest mathematical discovery of all time".