Where are you in INVESTMENT DIAGRAM?

Each of us has time. But not everyone of us has knowledge and money. The three constitutes what is called the INVESTMENT DIAGRAM. 

TIME

Every investment needs time to grow. Whether it’s few minutes or hours in the stock market or several years when it comes to maturity of insurance products, there is always the element of time. That is why it is always advisable for us to start early as the power of compounding will be at our advantage. 

Money

Money is the result of our hard work in our jobs. It is always at your disposal. You can either spend it or save it. As I told in my previous article, your spending habits will determine whether you will be poor, middle class or rich person in the future.

Knowledge

Knowledge is important in every investment. In fact, it’s what separates the rich and the wealthy. When you are equipped with the right knowledge on your investments, you’re not susceptible to get-rich-quick scheme which commonly disguises as an investment where in fact, it’s a scam or fraud.

THE INVESTMENT DIAGRAM

The Investment Diagram is a Venn Diagram where its components are TIME, MONEY, and KNOWLEDGE. Let's see which set do you belong in this diagram.

PEOPLE WITH TIME AND MONEY

People who have time and money but without knowledge are investors susceptible to become victims of scams. They are the easy prey of people promising good returns for their money. As the old adage says, ‘if it’s too good to be true, it probably is.’ 

PEOPLE WITH TIME AND KNOWLEDGE

People who have time and knowledge but without money are merely savers. They need to build their savings first before they can invest. A good way to build savings as I mentioned in one of my previous posts is to use the equation, INCOME less SAVINGS equals EXPENSES. That is, save first before you spend. Pay yourself first. As Warren Buffet said: “Do not save what is left after spending but spend what is left after saving. 

PEOPLE WITH MONEY AND KNOWLEDGE

Some of us belong to this group as we become busy with other matters whether it be in our jobs or business. If you belong to this group of investors, then it’s best for you to hire someone to invest for you or have your money invested in pooled funds like mutual funds or trust funds. These funds are handled by professional fund managers who are experts in their own field. They will do the investment for you. 

PEOPLE WITH TIME, MONEY, AND KNOWLEDGE

People with time, money and knowledge are the luckiest. They have enough time to ride the volatility of their investments, the money to invest, and the knowledge about the investment they’re putting their money in.

WHERE ARE YOU IN THE INVESTMENT DIAGRAM?

Comment your answers below.