Investment Principles

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Investment Principles by Mind Map: Investment Principles

1. “Any fool can make something complicated. It takes a genius to make it simple.” - Woody Guthrie

1.1. As I write this I have to first acknowledge that I am personally not a genius; however, the information compiled today is sourced from the most respected geniuses in their fields.

1.2. The principles presented are based on the concept of meritocracy.

1.3. With information overload from all channels and mediums it becomes increasingly important that you seek out and follow advice from those with a vested interest in your success who have credibility,fruit on the tree, or merit in the particular area you want results in.

1.4. Our philosophy is that the best way to get anything you want in life is to find someone who has the results you want and then simply copy what they did to get it.

1.5. In the information age the quantity of information is not so much important as the quality of information.

2. Goal

2.1. Define the fundamental principles of personal investing

2.1.1. The Goal is to work for money, then put money to work for you, so that you can buy back your time

2.1.1.1. Time is the most valuable resource we have

2.1.1.1.1. Non-Renewable Asset

2.1.1.1.2. We don't know how much of it we have

2.1.1.1.3. What is your purpose?

2.1.1.1.4. Never forget your reason for money... it's a tool that gives you freedom and choices to focus on your purpose.

2.1.1.2. You must buy back your time by leveraging systems that create residual income

2.1.1.2.1. Robert Kiyosaki Cash flow quadrant

2.1.1.2.2. Franchising

2.1.1.3. Time is the most valuable resource we have

2.1.2. Economics 101 = Supply and Demand

2.1.2.1. What creates demand which diminishes supply and increases value of remaining?

2.1.2.1.1. Look for products and services that

2.2. Categorize investments into groups based on risk, so that every level of investor, from those just beginning to build their portfolio to the sophisticated investor, will have a principle based framework to guide their diversification journey.

2.3. Provide clarity on how to balance risk vs. reward and when to increase risk based on the foundation levels of your investment portfolio.

2.4. Leave you with specific actions steps you can take today to secure, protect and increase your wealth.

2.4.1. Make a list of your most precious relationships

2.4.1.1. Call them and tell them you love them

2.4.1.2. Ask them how they are doing

2.4.1.3. Listen to them

2.4.2. Define an area in your life that you want better results

2.4.2.1. Information = Thinking

2.4.2.1.1. Thinking = Action

2.4.2.2. Modeling

2.4.2.2.1. Find a mentor or author who has the results that you want

2.4.3. Make a list of your survival needs

2.4.3.1. Make sure you have adequate supplies in case of emergency (Rotate supplies to maintain freshness)

2.4.3.1.1. Food

2.4.3.1.2. Water

2.4.3.1.3. Shelter

2.4.3.1.4. Medical

2.4.3.1.5. Liquid Cash equivalent to minimum 3-6 months of current lifestyle expenses

2.4.3.1.6. Insurance protection

2.4.4. Use your own wants and goals as motivators to get leverage on yourself.

2.4.4.1. This will help you do the things you know you need to do to hit your goals even when you don't feel like doing them.

2.4.5. Convert your extra paper currency into tangible assets that grow in value in order to protect your savings from devaluation that happens as a result of inflation.

2.4.6. Buy Land

2.4.6.1. Start with pre-developed land that grows in value without management responsibilities

2.4.6.2. If you have the time and expertise consider rental properties to create another income stream

2.4.6.2.1. Keep in mind that these are an active investment or business that requires your time and attention in order to be profitable, so be cautions about how much of your precious time you want to invest into this type of business.

2.4.7. If you have maximized each of the previous investment categories and you have cash flow from your current investments that covers your cost of living and you own multiple properties in multiple countries then you may consider gambling in the stock market.

2.4.7.1. This is a fun way to explore and learn about different business models, but don't use money that you are attached too or need for any other purpose.

2.4.8. If you have a passion for progress and technology you may consider investing into a start up company or technology that you view as solving a major world problem.

2.4.8.1. The statistics tell us that most start-ups fail, but some create world changing products and services that eventually get majority market adoption creating wealth for many people involved. Make sure that you are using surplus money and that you are more interested in the particular market need that your investment solves rather than the potential ROI

2.4.9. If you love statistics and the history of economics you may consider currency trading. This industry moves very quickly and has variables that are well outside of your control, so use surplus money that you can afford to lose entirely.