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Diversify Diversify Diversify your investments

Diversify Diversify Diversify

Written by R. A. Stewart

“Put your money in several places-many places, in fact-because you never know what kind of bad luck you are going to have in this world.”-Ecclesiastes 11:2

The number one rule when investing your money is to diversify. That is to invest your money in several places. To invest money in one place is called “Placing all of your eggs in the one basket”. This is also known as speculating. 

During the 2007/08 Global Financial crisis there were people who lost their entire life savings when the company which they invested their money with went into receivership. The companies concerned were offering high interest rates to investors. 

There are sometimes stories floating around of people who made a fortune on the share market by investing in one company. That is all very well when it comes off, but such investors will try the same thing again and again and again and give up their gains plus a lot more.

Greed is what gets the better of some people. If you are going to speculate then do it with discretionary spending money. This is money you may have normally spent on entertainment, your hobbies, eating out, gambling, and the like.

Your retirement fund should not be used for one of your get rich quick schemes such as playing with the crypto market. That should be done separately.

Diversification is more than just spreading your portfolio among different companies, it is investing in different platforms. Investing your life savings in sharesies or robinhood is not diverse even if you were investing in a range of companies. You just don’t know what will happen to these platforms in the future.

The same thing applies when investing in crypto-currency. Don’t invest all of your bitcoin with one bitcoin exchange but spread it around among several to reduce your risk. But remember, Bitcoin is volatile so only play the crypto market with discretionary spending money.

Invest in different types of industries such as power companies, banks, insurance companies, farming, etc. 

In order to grow your wealth it is necessary to take calculated risks, not reckless ones. Share market investors have the option of investing in individual companies or managed funds which are a form of diversified investment. In this age it is possible for investors to deposit money into an online share market platform and purchase shares into individual companies for a minimum amount. This enables the ordinary man or woman in the street to get involved in the markets.

Hands-on investing will not only help you to grow your wealth but it also increases your financial literacy. With plenty of experience behind you there will be fewer mistakes as a result of better decision making.

Always remember that whenever there is a chance of a capital gain there is a chance for a capital loss. Your retirement fund balance may be down as it will be from time to time due to the volatility of the share market but that does not mean that you have lost money. It is the nature of the ups and downs of the markets, Get used to it!

You don’t have to be rich to invest but you have to invest to get rich so what are you waiting for?

About this article

This article is not financial advice and may not be applicable to your personal circumstances therefore discretion is advised. You may use this article as content for your blog or ebook.

Read my other articles on www.robertastewart.com

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Leaving an inheritance

Written by R. A, Stewart

“A good man leaves an inheritance for his children’s children.”-Proverbs 13:22

My great grandfather Robert Stewart started a brewery in 1905. This proved successful that by the time he died in 1932 just short of his ninetieth birthday he was a wealthy man in comparison to the average person. He also owned quite a bit of land when he died.

My grandfather Archie, Robert’s youngest son inherited the brewery and some land. Archie by the time he died in 1967 left land to my father, Doug some 250 acres. At some point he must have gifted him the land years prior to his passing. He also left my father cash when he died.

Going down another generation. 

My brother and I have possession of the land once owned by Granddad Archie. Talk about leaving an inheritance to your children’s children.

Robert, my great grandfather and Archie were good with their money in that they lived a modest lifestyle. Did not try to keep up with the Joneses and generally lived within their means.

The generations after the 1970s are ruled by greed and selfishness. The common use of credit cards is an example of this. 

The flashy advertising on TV taps into all of this by feeding into the narrative “You can have whatever you want and you can have it now.” 

It is the fear of missing out which the loan sharks are tapping into.

I have heard some bad money attitudes from people over the years and the most common is “You cannot take it all with you.”

This may be so but then why do these people go to work to earn money? People who spend all of the discretionary money with no thought for the future have no vision.

At some point in the future people will need money for medical expenses, dental expenses, new cars, retirement, and so on. The person with vision will set up their finances in such a way that they will have this money ready when the time comes.

“Men who have lots of money are selfish” is another one I have heard. If this is true then the men in our family who left large sums of money to their descendants must be selfish.

Only a gold digger would think like that and I will leave it at that.

“You have to spend your money on something.” is another comment I have heard. 

I am unaware of a law which says that you have to spend it. This kind of attitude will eventually lead to poverty at some point because there will come a time when your level of income will drop due to health or retirement. Making provision for your later years requires vision and maturity. It is the responsible thing to do.

Living within your means is a timeless principle. It was applicable to my great grandparents and it is still applicable today. The only difference is that in today’s society there is more pressure on people to part with their money and unless you learn to exercise self control and learn to discern then money will easily part ways with you. There is no magic formula, it is just a matter of applying the three basic rules of money management.

The three basics of personal finance are:

  1. Live within your means
  2. Save
  3. Invest

Once you have mastered the three rules then you will be better off than people who never look beyond the next pay day and just spend everything they make.

About this article

This article is of the opinion of the writer and is not financial advice. It may not be applicable to your personal circumstances, therefore discretion is advised. You may use this article as content for your website/blog or ebook.

Read my other articles on www.robertastewart.com