Investing well

Isaac Nana Opoku

Continuous availability of financial resources, especially cash is key to the survival of every business, including yours. George S. Clason, in his book, “The Richest Man In Babylon” notes that money is plentiful for those who understand the simple laws that govern its acquisition. One such law is what I call the law of safe investment.

As a business, you must open yourself for investment and not any kind of investment but a safe investment. In the lines that follow, I present to you, among others, some five simple but crucial principles for safe investment.

  1. Decide on your investment objective

There are many reasons why a business may invest. While some invest to increase wealth for their owners, others invest mainly to improve their operational capacity. Knowing your objective will guide the efforts and resources to commit and also where to commit such efforts and resources.

  1. Make a list of firms to invest with

An investment will always be done in a particular asset and these assets are managed by firms. It is crucial to make a list of firms to invest with and more so investigate to find out how reliable they can be. Seek professional advice and endeavor to do a good assessment.

  1. Consider risk tolerance

Risk tolerance has to do with the degree to which you would be perturbed should you lose your investment. Whereas some will not be perturbed at all, others cannot stand losing their investment. Deciding on your risk tolerance informs the assets into which you can invest. A high-risk tolerant firm can invest in risky investments but risk-averse firms will usually consider investments with little or no risks.

  1. Consider diversification

In diversification, you spread your investment across a wide range of assets with different risk levels to reduce your chances of losing all your investment. Irrespective of your risk tolerance, it is vital to diversify your investment.

  1. Monitoring and follow-up

After undertaking all due diligence and being satisfied to commit your resources into an asset with a particular firm, you must from time to time monitor the progress of your investment. This will enable you to decide whether to discontinue the investment, reduce it or put in more financial resources.

Remember that money makes possible the enjoyment of the best the earth affords – George S. Clason.

1 Comment

  1. Paul Ayertey
    September 10, 2019

    Very much in agreement with point 4. 'Consider diversification'. This indeed seeks to minimize the magnitude of risk if a single investment portfolio should fail.
    That is a great piece, Built Accounting Services. Thanks for the introduction of this blog. Trust we can update our knowledge via this site.

    Many Thanks.

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.

More great articles


Why Profitability Is Key to Assessing Your Business Growth

Why Profitability Is Key to Assessing Your Business Growth Every emerging organisation be it small, medium or large has certain…

Read Story

How cash works in business

For all organizations be it multinationals, small and medium-sized enterprises, or not-for-profits, money is needed in order to be sustainable,…

Read Story
outsource bookkeeping and accounting

When Should You Outsource Your Bookkeeping And Accounting ?

Immediately you leave your comfort zone and launch your business, it might feel like the engine of your brand-new car…

Read Story

Never miss a minute

Get regular dose of finance, tax and accounting insights delivered directly to your inbox

Book an appointment for transition support