Give Your Money a Good Home
You work hard for your money and you don’t want it to go to waste. Unfortunately most people view their money as if it were just some renewable resource that automatically gets replenished on the next paycheck. Having that mentality is incredibly dangerous because nobody knows what tomorrow brings. Setting your personal budget is crucial for your own financial success. Make sure a portion of your budget has an area for investments.
Consider your cash as a precious asset that can actually work for you and grow with your smart decisions. The biggest mistake that most people make is having someone else do the research for them. With your own money, should always come your own research. If you are investing in a company that’s publicly traded consider the following list to help you make a smart investment.
Find out what the business is about
- KNOW what your money is going into. Research the operations of the company and learn just what they are doing.
Learn who runs the business
- You don’t want to invest in a company where the CEO or any person with position in power has had a shady background or a laundry list of scams. It’s paramount to make sure that the people in charge are legitimate. I wouldn’t put my money in a financial firm where the CEO was a former convict that was convicted of fraud.
How much is the company worth?
- Compare the company to others within the sector to see where they stand with their competition. It’s also a great idea to see just how fast they got there and how they’ve been growing over the years. Using charts is a great way to analyze their growth.
How strong is the sector?
- Each company has a sector that they are part of. For example, there’s Oil, Real Estate, Marijuana (growing quickly as laws are changing), etc… Look for trends in the sector that shows promising growth. For instance, if Real Estate is doing terribly, there’s a good chance that businesses in that sector are going to struggle to report growth for the time that the sector is in bad shape.
Public relations relevance and frequency
- When companies release their PR’s, it’s their chance to let people take a further look into the company. They are showing you what plans they have to take their business to the next level or what they are doing with their company. See how long it’s been since the last three PR’s were submitted as well, you want to make sure that the company isn’t being shy with their information.
- Relevance is important too, when identifying a strong company. Some companies that are in one area will often try to branch out into other areas that have nothing to do with their main focus. Sometimes this a good thing, most of the time it isn’t. If you see a Real Estate company with a smaller market capital saying that they are going to fund a series of movies and start making sodas, you know the person running it has no idea what they are doing or they are only releasing PR’s to try to get their stock price to jump. Just be careful and do your research.
Do they pick up the phone?
- Publicly traded companies are supposed to have an Investor Relations department, where investors (you) can call, email or write to to find out what you need to know about the company. Call them, see if they pick up and ask them questions about some of the above topics. If they aren’t hesitant with answers and they pick up, that’s a great sign that they have their stuff together.
Take these tips into consideration when putting your money in the hands of a publicly traded company. Even if the company is not publicly traded and you are still looking to invest money into it, FIND OUT AS MUCH INFORMATION AS YOU CAN! You ALWAYS want to know more about where your money goes. You wouldn’t send your kid off to a school you knew nothing about, right? Same should go for your money. Research, research, research!
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