In this post I would like to focus on general questions that you have to answer yourself, before making a bet or investment. In this stage it should be understood why to invest? and Where does money come from?
Maybe go out to the city, sit down, look around you and relax. Drink a coffee or tea.
These are the questions:
- Where are you?
- Are you in the workforce?
- Do you have a bank account?
- Do you have debt?
- What do you buy and use every day?
- What does everyone else buy? (=What is useful / has value)
- What do rich people buy?
- Do these products and the companies of these products have competition?
- Can you buy shares in these companies?
- How much are these shares?
- What is a low / high price for a share?
- Is a dividend payed? How high?
- Does the company make a profit?
- What are the other financial numbers?
- Is the management smart or dumb?
- Does it matter if they are dumb?
- Is there a value, a future value and a future of the company in general?
The final question is the one-million-dollar question.
Press the “buy” button or not?
Well, the decision is up to you, but I hope I could give you some hints 🙂
If a lot of questions, which I have written here, can be answered in favor of an investment, then the risk is much lower than blindly doing something you heard of or worse – you read somewhere on the internet.
Thinking about an investment doesn’t cost as much as buying the wrong share or the right share just at the wrong time.