Basically, you must have a clear financial objectives, before choosing the type of investment. Tom Martin Charles Ifle, mentor coach, who also practitioners of hypnotherapy, say, before making a decision to invest, should consider the mature and calculated risk.
In practice, 99 percent of the people, still confused determine financial goals. In addition, the tendency of novice investors is easily tempted by money game products, which promises advantage. Another reason, which makes a person easy to be tempted is also due to the bandwagon of friends, who bought a similar product.
“In theory, everyone knows and understands the principles of investing. But in reality, a different practice with theory. It has to do with emotion. The ability of the brain are not properly trained, will result in losses when making decisions. And a lot of people, making mistakes over and over and not learn from their mistakes, “Tom explained, in his book, Big Brain Big Money.
Well, to answer your confusion to choose, where to invest, Tom gives the picture. Should recognize the ratio between capital invested in shares or in business, before deciding on options.
Consideration factors, picking stocks or businesses, among them by comparing the measuring instrument, accuracy, price changes and the reasons, ownership, and risk. Here’s a simple comparison, the version of Tom:
To measure the investment in your shares, only to look at the share price. While the accuracy value of investment in these capital markets, tend to be accurate but often times the wrong prediction. Price changes, occur every second on stock investments, due to the ever-changing offer price. Ownership of stocks, on average for 11 months. Investment risk is a decrease while, at the stock price tends to fluctuate.
To measure the capital, already invested in the business, look at the total value of your assets. The accuracy of the business, depending on the accuracy of prediction of these business owners. Price changes on business, not so volatile as stocks. Price changed 2-3 times a year on business investment. Price change depends strongly on the value of turnover, generated business owners. Business can be run until a few generations, depending on management capabilities for business owners. Talking of risk, there could be a decline, which must be from an asset to your business.
How has your experience? What investment would you choose, if granted stock options or business?