By Babajide Komolafe
To make more money, you must not only save, you must also invest. A lot of people know this and hence seek various ways to invest their money.
However, many have lost money due to bad investment decisions, some due to greed, but most due to lack of knowledge.
For example, it was reported that about 600,000 people lost $800 million to the collapsed Crypto Bridge Exchange (CBEX).
A huge number of people lose money to bad investments because they do not know what to consider before putting their money in any investment offer.
You should always consider the following factors before you invest your money in any investment offer from any organisation. I called them the six ‘R’s of safe investment.
Return
The first, of course, is the return. This could be the interest rate or an increase in the money you are putting into the investment.
To ensure good return on your investment, you must consider the inflation rate. The return should be higher than the inflation rate, which is currently 22.97 per cent or close to it. You must also consider returns offered by alternative investment offers.
However, you must recognise that investment offers, aimed at defrauding people, usually come with high returns. They offer an interest rate that is far above what is currently obtained in the country. Sometimes, fraudulent investments promise huge increases in the money invested in a relatively short time. For example, the collapsed CBEX offered 100% returns in 30 days!
Interest rates currently range between 15 and 30 per cent in the economy. So you should view with suspicion any investment that offers interest rates or returns far above this range.
Reputation
The second major factor you need to consider is the reputation of the organisation or people behind the investment offer.
It takes time, resources and work to build a good reputation especially when it comes to offering investment services. So, people and organisations with reputation will seldom want to do anything that will destroy their hard-earned reputation.
The following questions will help you to ascertain the reputation of the people or organisation behind any investment offer.
How long has the organisation been in business? Who are the owners and top management of the organisation? What is their history? How popular, accepted and respected is the organisation and its services? What are people saying about the organisation? You can get reliable answers to these questions by doing diligent internet search on the organisation.
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