The job of an investment broker is to recommend certain products. The products they recommend depends on the company they work for (or have arrangements with). Whatever broker you go to, they'll recommend products which will earn them commissions - and some products earn higher commissions than others. It stands to reason that the broker will recommend products which will earn them higher commissions - after all they have bills to pay as well as you - unless you broker is independently wealthy...
It is important to realize this when you go to a broker for advice about where to invest your money. You're better off educating yourself about your options and making decisions based on the outcome of your own research. If you then decide to go to a broker to implement what you have decided after researching - well that's your prerogative. I argue that once you've conducted your own research, you're better placed to make decisions regarding where your money is invested than a broker. After all - I'd much rather control my own money than hand over the power to make those important decisions to someone else.
Investment brokers:
* Often don't need any qualifications to work as an investment broker beyond limited company training.
* Receive company training which is limited in that the broker is trained to recommend certain products.
* Are well versed in products which are unlikely to earn you a decent income, and the brokerage firm have a vested interest in recommending.
* Aren't typically independently wealthy - if you want to be wealthy I wouldn't recommend putting your investments in the hands of someone who isn't wealthy themselves.
* Are looking for the best way to make themselves money - and that doesn't necessarily correspond to your financial interests.
Sure, investment brokers provide a service - they allow people to invest their money without the hassle of learning how to do it themselves. I say it's time that we educated ourselves, and made the conscious effort to teach ourselves about finance and investment - it's an area of knowledge largely ignored in our schools but taught to the rich, by the rich. There are plenty of tools out there which can make obtaining this knowledge so easy - make use of them. These are often provided by wealthy people who wish to share the knowledge they have gained and implemented in order to place them in the comfortable position they find themselves today.
Isn't a wealthy person the best person to get financial advice from? Can a broker who works for a salary deliver you a source of wealth from your investments? If that were true, wouldn't the broker be wealthy themselves? Before you decide to place your investments in the hands of a broker, ask them if they are independently wealthy.
The Biblical Principles of Investing
The Word of God is THE authority on every subject of life. It should guide your natural life as well as your spiritual. Have you ever lost money by trying to catch a rising stock or some get-rich-quick scheme? Investing by its very nature involves taking some risk. However, even in investing the Bible lays out principles which can help you make better decisions.
Investing is not strictly limited to the stock market either. Some people invest in business ventures or start their own business. Others invest in real estate, commodities, currencies, etc. Regardless of your chosen investment vehicle, the Biblical principles of investing applies to each.
It's interesting that the Bible advocates investing your money rather than just keeping it "under your mattress". Jesus criticized the servant who buried the single talent that was entrusted to him, while praising those servants that earned good returns on their investments (Luke 19). It seems that learning to make good investment decisions is key part of becoming a wise steward.
So rather than just listening to what the investing guru's on Wall Street have to say or reading the latest investing book, let's look at some of the principles that the Bible lays out for investing:
Diversification
Cast thy bread upon the waters: for thou shalt find it after many days. Give a portion to seven, and also to eight; for thou knowest not what evil shall be upon the earth. Ecc. 11:1-2
It is never a good idea to invest all your money in a single venture. Living under the curse, no investment is a sure thing. Therefore, it is better to diversify your investments so that if one does poorly the losses you take on that investment will be offset by your gains on your other investments.
Invest in a business or product you understand
Through wisdom is an house builded; and by understanding it is established: And by knowledge shall the chambers be filled with all precious and pleasant riches. Prov. 24:3-4
Whether its choosing a stock to invest in or a business to start, choose one that you understand the products, how it makes money, etc. In the late 1990's, many people were investing in stocks without even knowing what they did or how they would ever be able to make money. As a result they had no way of understanding how the business itself was doing and recognizing that the wheels were coming off the wagon.
Investing is not Speculating
Wealth gotten by vanity shall be diminished: but he that gathereth by labour shall increase. Prov. 13:11
Any wealth you gain from gambling, whether it be in the stock market or at the casino soon will vanish. If you choose to invest your money without having any solid rationale for doing so, then you are not investing - you are speculating. Of course even speculators hit gold occasionally, but the odds are you will lose big following that strategy.
Don't get greedy
Take heed, and beware of covetousness: for a man's life consisteth not in the abundance of the things which he possesseth. Luke 12:15
Investing can be a part of your life, but it should not be your life. If you live and breathe your money and everyone can tell how your portfolio is performing by your daily attitude swings, then you need to reassess your priorities. Money can be a defense and should be built up in preparation for the future, but obtaining wealth should never be your only purpose in life.
Patience
Rest in the LORD, and wait patiently for him: fret not thyself because of him who prospereth in his way. Psalms 37:7
Any wealth you accumulate should not be measured against what your friends have, but rather it should recognized as what God has given to you. You should never brag about your investment returns nor worry about others who do brag. If you're following the principles of the Bible, God will bless you on His own time schedule.
No overnight millionaires
Labour not to be rich: cease from thine own wisdom. Wilt thou set thine eyes upon that which is not? for riches certainly make themselves wings; they fly away as an eagle toward heaven. Prov. 23:4-5
There are many exotic investment vehicles that have been created because of the greediness of man. They offer a pathway to great riches in a short amount of time, but they also offer the chance for great poverty. You should never enter into any type of investment that could cause you to lose more than you originally invest. Investing via leverage or margin thinking you're going to strike it rich quick is a sure way to end up losing much more than you originally bargained for.
Invest only what you can afford
There is a sore evil which I have seen under the sun, namely, riches kept for the owners thereof to their hurt. But those riches perish by evil travail: and he begetteth a son, and there is nothing in his hand. Ecc. 5:13-14
It's very sad that so many of the people who buy lottery tickets can hardly afford to live from paycheck to paycheck. Money that should be used to provide for their family's well-being is thrown away chasing dreams of great riches. Before you put money in any type of investment you should first be able to adequately provide for your families needs and even have some money set aside for emergencies in case you need it. Your investments are for your future, not for your emergencies.
Prepare for Economic downtimes
A prudent man foreseeth the evil, and hideth himself; but the simple pass on, and are punished. Prov. 27:12
Due to the curse, cycles of economic prosperity don't continue forever. It would be nice if they did, but unfortunately you must plan for when the economy, stock market, business environment, etc. turns south. This is what made Joseph such a valuable steward to Pharaoh, he was able to create wealth in both the bull and the bear markets of Egypt.
The Bible provides guidance even on how to execute your investment strategy. While the investment principles of the Bible are helpful, the desire for riches should never be the guiding principle of your life. "Seek ye first the kingdom of God . . . and all these things shall be added unto you". (Matthew 6:33)
Investing is not strictly limited to the stock market either. Some people invest in business ventures or start their own business. Others invest in real estate, commodities, currencies, etc. Regardless of your chosen investment vehicle, the Biblical principles of investing applies to each.
It's interesting that the Bible advocates investing your money rather than just keeping it "under your mattress". Jesus criticized the servant who buried the single talent that was entrusted to him, while praising those servants that earned good returns on their investments (Luke 19). It seems that learning to make good investment decisions is key part of becoming a wise steward.
So rather than just listening to what the investing guru's on Wall Street have to say or reading the latest investing book, let's look at some of the principles that the Bible lays out for investing:
Diversification
Cast thy bread upon the waters: for thou shalt find it after many days. Give a portion to seven, and also to eight; for thou knowest not what evil shall be upon the earth. Ecc. 11:1-2
It is never a good idea to invest all your money in a single venture. Living under the curse, no investment is a sure thing. Therefore, it is better to diversify your investments so that if one does poorly the losses you take on that investment will be offset by your gains on your other investments.
Invest in a business or product you understand
Through wisdom is an house builded; and by understanding it is established: And by knowledge shall the chambers be filled with all precious and pleasant riches. Prov. 24:3-4
Whether its choosing a stock to invest in or a business to start, choose one that you understand the products, how it makes money, etc. In the late 1990's, many people were investing in stocks without even knowing what they did or how they would ever be able to make money. As a result they had no way of understanding how the business itself was doing and recognizing that the wheels were coming off the wagon.
Investing is not Speculating
Wealth gotten by vanity shall be diminished: but he that gathereth by labour shall increase. Prov. 13:11
Any wealth you gain from gambling, whether it be in the stock market or at the casino soon will vanish. If you choose to invest your money without having any solid rationale for doing so, then you are not investing - you are speculating. Of course even speculators hit gold occasionally, but the odds are you will lose big following that strategy.
Don't get greedy
Take heed, and beware of covetousness: for a man's life consisteth not in the abundance of the things which he possesseth. Luke 12:15
Investing can be a part of your life, but it should not be your life. If you live and breathe your money and everyone can tell how your portfolio is performing by your daily attitude swings, then you need to reassess your priorities. Money can be a defense and should be built up in preparation for the future, but obtaining wealth should never be your only purpose in life.
Patience
Rest in the LORD, and wait patiently for him: fret not thyself because of him who prospereth in his way. Psalms 37:7
Any wealth you accumulate should not be measured against what your friends have, but rather it should recognized as what God has given to you. You should never brag about your investment returns nor worry about others who do brag. If you're following the principles of the Bible, God will bless you on His own time schedule.
No overnight millionaires
Labour not to be rich: cease from thine own wisdom. Wilt thou set thine eyes upon that which is not? for riches certainly make themselves wings; they fly away as an eagle toward heaven. Prov. 23:4-5
There are many exotic investment vehicles that have been created because of the greediness of man. They offer a pathway to great riches in a short amount of time, but they also offer the chance for great poverty. You should never enter into any type of investment that could cause you to lose more than you originally invest. Investing via leverage or margin thinking you're going to strike it rich quick is a sure way to end up losing much more than you originally bargained for.
Invest only what you can afford
There is a sore evil which I have seen under the sun, namely, riches kept for the owners thereof to their hurt. But those riches perish by evil travail: and he begetteth a son, and there is nothing in his hand. Ecc. 5:13-14
It's very sad that so many of the people who buy lottery tickets can hardly afford to live from paycheck to paycheck. Money that should be used to provide for their family's well-being is thrown away chasing dreams of great riches. Before you put money in any type of investment you should first be able to adequately provide for your families needs and even have some money set aside for emergencies in case you need it. Your investments are for your future, not for your emergencies.
Prepare for Economic downtimes
A prudent man foreseeth the evil, and hideth himself; but the simple pass on, and are punished. Prov. 27:12
Due to the curse, cycles of economic prosperity don't continue forever. It would be nice if they did, but unfortunately you must plan for when the economy, stock market, business environment, etc. turns south. This is what made Joseph such a valuable steward to Pharaoh, he was able to create wealth in both the bull and the bear markets of Egypt.
The Bible provides guidance even on how to execute your investment strategy. While the investment principles of the Bible are helpful, the desire for riches should never be the guiding principle of your life. "Seek ye first the kingdom of God . . . and all these things shall be added unto you". (Matthew 6:33)
Why Oil Prices Will Continue to Rise - and How to Invest in Oil
It seems like oil prices are going ever higher. This is having a dramatic affect to everyone. The result is that the average person is worse off when oil prices rise. The gasoline we use to power our cars costs more, the food we buy at the supermarket costs more (because it is transported by road), holidays cost more (thanks to the increased fuel costs of airlines). It seem that rising oil prices bring nothing but extra costs o the average person.
Why oil prices will continue to rise
It is estimated that we have now used just over half of the worlds natural oil supplies. As with all natural resources there is only a finite amount of the stuff in the ground. On top of this the worlds rate of oil consumption is at its highest and shows no sign of slowing.
Naturally oil companies focus their effort on drilling oil from large accessible fields as it costs them less to extract the oil from the ground. As the oil fields currently in production begin to dry up oil companies are forced to begin drilling smaller, less accessible oil fields which are more expensive to extract from. This factor alone will push oil prices higher in the future.
The recent surge in oil consumption has been a direct result of the recent industrialisation of large economies in the east, mainly India and China. Both of these countries have booming populations and economies. Neither show any sign of slowing their rate of growth, let alone shrinking. As a result in the foreseeable future their requirements for oil will continue to grow.
How to profit from Oil price rises
The answer is simple. To invest in oil related companies or in more direct forms of oil investments such as Oil Exchange Traded Funds (ETFs) that aim to provide the same returns as crude oil.
So with oil prices set to rise even further it makes sense for the smart investor to make sure that they have invested in future oil price rises.
Why oil prices will continue to rise
It is estimated that we have now used just over half of the worlds natural oil supplies. As with all natural resources there is only a finite amount of the stuff in the ground. On top of this the worlds rate of oil consumption is at its highest and shows no sign of slowing.
Naturally oil companies focus their effort on drilling oil from large accessible fields as it costs them less to extract the oil from the ground. As the oil fields currently in production begin to dry up oil companies are forced to begin drilling smaller, less accessible oil fields which are more expensive to extract from. This factor alone will push oil prices higher in the future.
The recent surge in oil consumption has been a direct result of the recent industrialisation of large economies in the east, mainly India and China. Both of these countries have booming populations and economies. Neither show any sign of slowing their rate of growth, let alone shrinking. As a result in the foreseeable future their requirements for oil will continue to grow.
How to profit from Oil price rises
The answer is simple. To invest in oil related companies or in more direct forms of oil investments such as Oil Exchange Traded Funds (ETFs) that aim to provide the same returns as crude oil.
So with oil prices set to rise even further it makes sense for the smart investor to make sure that they have invested in future oil price rises.
The Worst Advice You Can Give Your Kids About Investing
The worst advice you can give your kids is 'go to school, get good grades and look for a secure job. The world we live in now (and particularly the future our kids are heading into) is full of down-sizing, is top-heavy with retirees and pensioners that will mostly be relying on social security that our kids will be paying for.
Our kids graduate from law or medical school or even get at trade and start to earn the dollars. With their disposable incomes they spend up big, have fun and meet like-minded partners, start their families and the demand for cash increases, so they work harder. More kids come, incomes and taxes go up, the pay cheques are all but gone! The kids are getting older every day as time ticks away they start putting away for their kids college funds and saving for their retirement. In a nutshell they are acting out what mum and dad have taught them, caught in a trap of paying high tax, high interest to the bank for the mortgage and life is controlled largely by the company they are employed by. At around 35 they are now trapped for the rest of their working days.
It is a fact that most people have nothing saved and are relying on there being a pension plan around when they need it. This is a very risky way to organize your future and your finances. We need to be teaching kids the rules of money that the rich play by, not the rules the rest of the population follow. These are the rules that allow us not to pay huge sums of our income to tax and interest, the same rules that allow us to decide if we want to work for someone else or to be in charge of our own income generation.
Do you want to break the cycle? Do you want to know what you have to do differently not to be trapped by this cultural norm? I am going to share the secret with you that most people miss their whole lives.
NEW ADVICE YOUR KIDS NEED FOR A SUCCESSFUL FUTURE
Have you ever noticed there are a lot of accountants, lawyers, stockbrokers or real estate agents who aren't rich? They are taught the same things in school we all are and we take advice from these people because we do not know the same things that the very wealthy do. Education is the foundation of success, a different education, not just the scholarly education available to most of us but an education that includes finance and communication.
What happens when a company restructures? People lose their jobs, families suffer and unemployment is perpetuated...but what else happens? The company on the stock exchange usually increases its stock value. So the employees lose and the investors just add to their already lucrative bank accounts. It is pure and simple, you either win or lose.
Time to pick the winning side - here's how: get smart. It's that simple. Give yourself a financial education - read, listen, read, watch and learn every and any way you can. Take action now to break the cycle that has been perpetuated for so long.
Our kids graduate from law or medical school or even get at trade and start to earn the dollars. With their disposable incomes they spend up big, have fun and meet like-minded partners, start their families and the demand for cash increases, so they work harder. More kids come, incomes and taxes go up, the pay cheques are all but gone! The kids are getting older every day as time ticks away they start putting away for their kids college funds and saving for their retirement. In a nutshell they are acting out what mum and dad have taught them, caught in a trap of paying high tax, high interest to the bank for the mortgage and life is controlled largely by the company they are employed by. At around 35 they are now trapped for the rest of their working days.
It is a fact that most people have nothing saved and are relying on there being a pension plan around when they need it. This is a very risky way to organize your future and your finances. We need to be teaching kids the rules of money that the rich play by, not the rules the rest of the population follow. These are the rules that allow us not to pay huge sums of our income to tax and interest, the same rules that allow us to decide if we want to work for someone else or to be in charge of our own income generation.
Do you want to break the cycle? Do you want to know what you have to do differently not to be trapped by this cultural norm? I am going to share the secret with you that most people miss their whole lives.
NEW ADVICE YOUR KIDS NEED FOR A SUCCESSFUL FUTURE
Have you ever noticed there are a lot of accountants, lawyers, stockbrokers or real estate agents who aren't rich? They are taught the same things in school we all are and we take advice from these people because we do not know the same things that the very wealthy do. Education is the foundation of success, a different education, not just the scholarly education available to most of us but an education that includes finance and communication.
What happens when a company restructures? People lose their jobs, families suffer and unemployment is perpetuated...but what else happens? The company on the stock exchange usually increases its stock value. So the employees lose and the investors just add to their already lucrative bank accounts. It is pure and simple, you either win or lose.
Time to pick the winning side - here's how: get smart. It's that simple. Give yourself a financial education - read, listen, read, watch and learn every and any way you can. Take action now to break the cycle that has been perpetuated for so long.
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