Principles Of The Psychology Of Wealth And Investments

Most of our decisions in life are motivated by whether they give us pleasure or pain. The pleasure versus pain principle can be transforming or destructive to our wellbeing depending on our understanding of how we allow it to affect our decision making. Once we understand this principle, (that is our constant avoidance of pain and our desire for pleasure) and how it works we can make choices that will transform our lives for the better.

Discipline and willpower are the only tools most of us were introduced to in the schoolroom to assist us in the creation of our lives and fulfillment of our dreams. I argue that once we understand the pleasure/pain principle we realise why we make the choices we do we – and therefore become free to create the futures of our dreams.

  • Humans operate with a stronger desire to avoid pain than to gain pleasure. Therefore our desire to create wealth and have financial abundance is limited by our fear of experiencing pain should we falter on our path to a lucrative future.
  • We associate activities such as saving and investing our money with pain because we are denying ourselves the instant gratification of what makes us feel good. Reframing our picture of pain to spending money can help us transform our futures! Denying some immediate material pleasures such as a new car, and instead investing in the stock market will ultimately cause us pleasure.
  • We associate the steps of wealth creation such as using the equity in our homes to create a more secure financial future with pain because of our fear of potential failure. This fear of failure (pain) stops us even trying. Our constant avoidance of pain makes things harder for us in the long run, and we do not live our lives to the fullest. These lost opportunities could have given us the ultimate pleasure of financial freedom and success in the longer term if our fear of pain had not shackled us in non-action.
  • We associate work with pain. Most of us are in 9-5 jobs and slaves to our mortgage and struggling to pay our bills yet we continue to do this as we think we are avoiding the pain of risk. We think that by diligently working at our jobs we have security.

We are able to change what we link pain and pleasure to and therefore re-frame our perspectives, such as linking pleasure with saving money and pain with spending money, enabling a more lucrative and independent life ahead. You can take actions to create the results you want for your future and that of your family it is all about deciding to have different emotions (pain or pleasure) about your actions like spending or saving.

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Private Equity and Investment

The source of funding of any project has great importance. This is so as no business deal or venture is possible without finance. Private equity investments are one such source of finance. These funds have assumed great importance and statistics prove that private sources finance new ventures at a gigantic rate, that is almost 25 times more than finances from other sources. Thus private finance givers have turned into excellent investors for new projects.

Private equity investors are investors who have a high net worth and asset value and have liquid cash available. These investors are the back bone of private equity investments. Last year 300,000 firms and enterprises were launched in the USA and nearly one seventh of this lot was financed by these equity investments.

Private equity investors have made a mark in the financial field and they have had a tremendous impact in the entrepreneurial market. It is estimated that that these investors fund anything in a range from $20 – $60 billion annually.

Private investors with money to spare generally keep their money and investments in non-public companies. Thus a equity investor will most likely make an investment for 3 to 7 years, in contrast to venture capitalists who invest in companies at the inception stage or launch and also for much shorter periods

Private equity firms will follow some parameters while making an investment,that will include a strong management team and the company’s ability to bring in profit. They will also look at the growth potential of the company and whether an investor’s capital is safe as well as good return on his capital.He will also look at the exit clauses in case the equity investor wants to get his investment out.

Thus Private equity is never in loss making companies. Private investors are there to get a good return on the money they have invested and as such they will track the profit graph of any company they invest in. The private equity investor will look for agreements that give him a share of the profit generated at the time of exit. This will be an important clause for him as he can use the profit to invest in some other company.

From 2007 onwards the private equity financiers did take a nose dive as the economic scenario had become bleak,but at the turn of the present year the investors are back and have funds to spare as recession is on the way out.

Learning Personal Finance With Investment Clubs

If you are someone who would like to know more about investing, joining or starting an investment club can be a rewarding and educational experience. Many people feel more comfortable about learning about investing with other average folks when compared with talking to an “expert”.

Is it a good fit for you?

If you have been putting off learning about investing and setting any money aside, the discipline of a club could be ideal. Many people join a club to have a group that they can talk to about investing and apply what they learn to their own portfolios. If you have $20-$50 a month to set aside and invest through a club, you might find membership is for you.

Even experienced investors use a club to gain information about stocks that they do not have the time to research. Many hands make light work. All members benefit from the work of other members. Work? Yes you need to contribute more that cash. Don’t think that you can take a free ride. The pooled account may not be significant when compared to your 401(k) but everyone has a stake and needs to commit.

How Do These Things Start?

Groups of friends, neighbors or co-workers start talking about investing and find that a starting an investment club is the next step. Setting up a club takes some work but the National Association of Investors Corporation (NAIC) has all the information you need to get started.

How Do They Work

Successful investment clubs focus on learning as well as investing. Guest speakers, like a local broker or investment analyst, may be invited from time to time. Most people join a club to explore new ideas and discuss investing issues. In the early sessions of a club’s life, education might be very introductory, covering how to read a balance sheet, an earnings report and the club’s financials. Soon the club might be learning new ways to value stocks or discussing a book about Warren Buffett.

Clubs Are Work: Why Not Try a Money-Free Club?

Many clubs have fallen by the wayside when members realize that the time involved is significant. Often the treasurer feels this first. Because of this, groups that want to get started but are a bit intimidated at the paperwork, try a “money-free” club.

Some money-free clubs will focus on education only. Others will set up fantasy portfolios on a web site and buy and sell and do all the work, but with no real money in.

Advantages

o No monthly contributions.
o No need for a treasurer.
o No accounts to keep and taxes to pay.
o Great for people who are hesitant to commit to a regular club.

Disadvantages

o People often lose their discipline if they’re not bound together by pooled money.
o Often people take a money-free club less seriously.
o It’s less fun and exciting for some people, if there’s no real money involved.

Finding Finance and Insurance Careers in the Automotive Industry

Interested in finance and insurance (F&I)? Love cars? Looking for a way to merge the two into a long-lasting and fulfilling career in the automotive industry? It’s time to consider a career in auto sales and F&I management. Now is a great time to invest in F&I training, which can provide everything you need to succeed in this career. That means you will acquire excellent leadership and communication skills and have the expertise required to handle the financial and legal aspects of a sales transaction.

Automotive Business Manager programs are designed to teach the skills required to oversee the financial and legal aspects of the automotive industry. Students in these automotive training programs are trained in finance and lease options, sale of after-market products and the use of specialized software.

Becoming an F&I manager means you will be in the center of the action. It also means you will have a direct impact on profitability and be rewarded accordingly. Need another reason to invest in F&I manager? Job Futures 2000 predicts that more than one-third of all jobs created in Canada will require a skilled trade designation or a college diploma.

What about the extensive restructuring of the automotive industry? There has been a lot of change, but the automotive industry remains one of the world’s largest and most important business sectors. Moreover, a surge in demand is expected as consumers make purchases that would normally have been made in the last two years and additional demand is created by increases in population, new consumer offerings and improved manufacturing technology. Employment prospects for automotive sales and F&I management are good for the following reasons:

  • A growing shortage of well trained individuals to fill sales occupations
  • Service Canada predicts there will be strong demand for qualified candidates in Sales and Service, Business, Finance and Administration “because this sector will account for more than 45% of all retirements over the next five years.”
  • Significant worldwide growth within the automotive industry

You know what happens when demand for a specific job goes up. Salaries also go up. That’s exactly what is happening for F&I Professionals. Key elements of F&I training programs can include the following areas of study:

  • Business Manager’s Role in the Dealership
  • Financial Institutions and Their Requirements
  • Getting the Contracts Purchased
  • Credit Reporting Overview
  • Understanding Credit Scores and Risks
  • Reading Credit Reports
  • Prequalification Using Credit Reports
  • Cash Conversions
  • Bank Conversions
  • Use a Customer-Friendly, Aggressive F&I Process
  • Qualify Your Customer, Use The Right Words
  • Product Knowledge
  • Effective Selling Techniques
  • Menu Selling Leasing Skills and Techniques

Prosper Through Low Cost Business Financing And Commercial Loans

If you are in a business and want to expend it or you want to buy some property for commercial use, the suitable way to borrow money for the purpose is to opt for business financing and commercial loans. Business financing means you are borrowing for investing in your business. You may borrow business finance for the purpose of starting a new business or for expending the established one. Commercial loans are usually taken for buying a property for its commercial use. For instant through commercial loans you can buy a hotel, pub, health centre, shop etc. Through business loans you are able to pay for raw materials or you can buy office furniture and so on.

Usually lower interest rate is the main concern of every business person when he takes a loan. The lower interest rate on business financing and commercial loans is guaranteed when you have pledged your valuable property such as home or your business or a commercial property as collateral. On securing the property as collateral, lenders surely offer a lower interest rate on secured business financing and commercial loans. However one should note that the value of home usually increases as time passes by while value of a commercial property or business may decrease. So interest rate also depends on the type of property placed as collateral. Another advantage of secured business financing and commercial loans is that you can avail greater amount of loan as per your requirements. Also the loan amount can be repaid in larger duration, allowing paying back the loan in easy installments.

However, if you require smaller amount, you can opt for unsecured business financing and commercial loans that are approved without collateral. But you should be having a good credit history and must be having sound income from business or commercial property. Lender will approve smaller loan at a higher interest rate and the loan shall have to be returned in shorter duration.

In both secured and unsecured business financing and commercial loans, you are required to produce documents related to your business and commercial interests. So keep all the documents ready before applying to a lender. Bad credit business people also are eligible for applying if they satisfy the lender about timely return of the loan through a convincing repayment plan.