In Chapter 7, I learned more about the nature of investing. Previously, I did not know much about the subject or what steps someone takes to become a good investor. At the end of chapter, Wheelan gives a few points of investment advice, although he promises to leave the more complex investment explanations to other sources.
The first piece of advice Wheelan gives is to save. If one saves his money, he can be the one to command rent from others. However, if he spends more money than he earns, he has to rent from others. Wheelan also explains risk and says, "Riskier investments must offer a higher expected return in order to attract capital. Those who take part in these investments are being paid more for the dangerous nature of the endeavor and therefore it may appear worth the risk. Wheelan also advises a diverse portfolio of investments so that if one plummets, all money is not lost. The final suggestion made by the author is to invest for the long run. He states that, "The odds are stacked in your favor if you are patient and willing to endure the occasional setback."If one quits he investment at the first downfall, he will never see the benefits.
This chapter introduced me to a new way of thinking about investing, which I did not know very much about before. I was not aware of these simple guidelines that make sense and seem very essential for success.
No comments:
Post a Comment