As long as you have assets to invest, the answer is: “immediately !”
When it comes to investing, there are three key factors, as I see it:
- Only invest what you can afford;
- Give yourself a method to invest;
- Follow that method or, in other words, be disciplined.
More on these factors in due course..
It is very important to realize that if you are after short-term gains, you will probably be disappointed by the actual returns of your investments, where they are governed by self-made strategies or they follow professional advice. I always like to consider investing my assets as a long term exercise: rather than worrying about the next 10, 100 or 1.000 days, I think about the next 10.000 days, which is about a 30-year time span.
One of the most powerful advantages of being a long-term investor is the effect of compounding , something that we will talk about more in detail soon: the longer you reap the benefits of your investments and re-invest them in a strategic as well as disciplined way, the more compounding amplifies your total returns. Precisely for this reason, there is no advantage in deferring the investment of your assets.
Now that we have talked about why, how and when to invest, I look forward to my next post in which I will provide some advice on some of options out there for investing your cash.
There are several ways to invest responsibly but first we have to define what it is that we are investing. You are probably thinking of your savings, which is obviously correct, but there are other assets to invest besides cash. Let´s go through some of them.
If you own a property, its value will fluctuate over the years. While it is common and generally sensible to own the house you live in, if you can afford buying one that is, it may some time make more sense not to own and to rent instead, as the capital that you would otherwise lock in the property may be put to work in other assets, whether they be stocks, bonds, and so on, and generate a greater return compared to the capital appreciation, if any, of that property.
I find that people I meet often don´t think about it but their time is also a valuable asset. Why would someone otherwise decide to stop working for a period of time to pay for and spend a lot of months to do an MBA instead of working ? Most of them are investing their time, and tuition fee, in the hope of earning a higher salary upon completion of their MBA. Similarly one may decide to purchase some holidays from their employer to invest their time in another more valuable activity..
In this blog we will look at several examples of the ways in which you can invest your assets, whether they be tangible or intangible, in the coming weeks. And in doing so, I will provide practical examples of how to do it as well as discuss the associated ethical, environmental and social implications.
When it comes to this topic there are no easy answers so I can only promise advice to consider for your journey and it will be up to you to decide what is right for you and your loved ones.
All the best !
There are many investment sites and newsletters out there and most seem to focus on promising you to make you money with little to no focus on how your investments impact the world we live in.
Any action we take, actually even not taking any action, affects our world. You can choose not to think about the consequences of your actions and stick your head in the sand, so to speak, or you can choose to be aware and act responsibly. If you feel this is true for your life, then you may agree with me that it should apply to your investments too.
The reason it does apply to your investments too is that if for example you decide to purchase the stock a company, you are actually become part-owner of that company. With shareholding come responsibilities which you need to aware of. Say for the sake of argument that you owned a property which you rented out to a third party: would you be concerned if that third party behaved illegally in your property ? Or that the use of your property affected the environment ?
Now, clearly owning a small portion of a large company does not make us relevant enough to meaningfully impact on its governance of its policies – but that´s why I believe it is important to pick companies (or in general investment ideas) which, to the best of our knowledge, have a similar ethical, social and environmental behavior as that with which we choose to conduct our life.
Stay tuned for the next blog !