5 principles of investment
1 – “Cast thy bread upon the waters: for thou shalt find it after many days.
2 – Give a portion to seven, and also to eight; for thou knowest not what evil shall be upon the earth.
3 – If the clouds be full of rain, they empty themselves upon the earth: and if the tree fall toward the south, or toward the north, in the place where the tree falleth, there it shall be.
4 – He that observeth the wind shall not sow; and he that regardeth the clouds shall not reap.
5 – As thou knowest not what is the way of the spirit, nor how the bones do grow in the womb of her that is with child: even so thou knowest not the works of God who maketh all.
6 – In the morning sow thy seed, and in the evening withhold not thine hand: for thou knowest not whether shall prosper, either this or that, or whether they both shall be alike good.” (Ecclesiastes chapter 11 verses 1 to 6)
- INCOME:
“Whatever your hand finds to do, do it with all your might, for in the grave, where you are going, there is neither working nor planning nor knowledge nor wisdom. (Ecclesiastes chapter 9 verses 10 NIV)
Everyone is expected to have something he or she is doing to acquire money in return. Everyone is created to solves a particular problem, in solving that particular problem money flows in. Each individual needs to develop skills, services, or products that he or she can exchange for money. One of the ways to set financial goals for the future and to become financial free is to first of all get a source of income.
Income is the money one gets for rendering or providing labour, producing a good or service over a specific period of time. Yet, this must be back up on purpose. Back up on purpose, demands that one should have a goal attached to that. With this, one will not spend the whole money he or she gets for providing a service without providing room for savings.
- FRUGALITY:
“When goods increase, they are increased that eat them: and what good is there to the owners thereof, saving the beholding of them with their eyes?” (Ecclesiastes 5 verses 11 KJV)
Frugality is the ability and quality of one being careful with his or her spending. People have the tendency to increase their spending because their income have increased. To live a financial free life we must strive to stir up the right character that will constantly help us to resist the urge to spend money excessively just because they are in our possession. We should avoid living below our means.
- SAVINGS:
6 – “Go to the ant, thou sluggard; consider her ways, and be wise:
7 – Which having no guide, overseer, or ruler,
8 – Provideth her meat in the summer, and gathereth her food in the harvest.” (Proverbs chapter 6 verses 6 to 8)
“In the house of the wise are stores of choice food and oil, but a foolish man devours all he has. (Proverbs chapter 21 verses 20 NIV)
We are never expected to spend everything we earned. Part of what one earns should go into handling some responsibility while part of it should go into savings for the future purpose. One of the ways to financial freedom is never to spend all the money one makes, there should be some to save as capital waiting for investment opportunities.
Savings refers to the money that a person has left over after they subtract out their consumer spending from their disposable income over a given time period. Savings, therefore, represents a net surplus of funds for an individual or household after all expenses and obligations have been paid.
- INVESTMENT:
“Wealth [not earned but] won in haste or unjustly or from the production of things for vain or detrimental use [such riches] will dwindle away, but he who gathers little by little will increase [his riches]. (Proverbs chapter 13 verses 11 AMP)
There some kind of commitment in investment for the future benefits. We need to make some enquiries to have enough knowledge and financial literacy to be able decode the good investment from bad ones.
- DIVERSIFICATION:
“Give a portion to seven, and also to eight; for thou knowest not what evil shall be upon the earth.” (Ecclesiastes 11 verses 2)
We need to come to the knowledge that investments come with risks. Nothing good comes easy. One must strive with all enthusiasm to reduce the risk of investment at its minimal and as well maximize the rewards. One needs to pay attention on diversification in investment.
