In­vest­ment for the in­di­vid­ual and gov­ern­ment

Kuwait Times - - BUSINESS - By Khaled Al-Mutawa

What is In­vest­ment? In­vest­ment is vi­tal for cus­tomers, cor­po­ra­tions and even gov­ern­ments; it is a strat­egy of plan­ning to max­i­mize in­come. Most large cor­po­ra­tions re­fore­cast their in­vest­ment on a quar­terly ba­sis. Like con­sumers, gov­ern­ments also have to uti­lize and pay for the things they want or need. Hav­ing a bud­get or an in­vest­ment plan is es­sen­tial be­cause it can help peo­ple and gov­ern­ments achieve pros­per­ity.

When Forbes re­cently re­leased a list of the wealth­i­est peo­ple on the planet, their per­son­al­i­ties were care­fully stud­ied and the re­sults wrin­kled the eye­brows of many. The ma­jor­ity of the wealth­i­est peo­ple had one com­mon char­ac­ter­is­tic: They were all in­vestors and bud­get plan­ners. Tai Lopez, a men­tor of en­trepreneurs, points out that true money is cre­ated within the econ­omy if peo­ple start to see things from an in­vestor’s stand­point. The largest cat­e­gory of the 450 self-made bil­lion­aires in the world, were not in the sec­tors of the real es­tate, oil, me­dia, nor in the food in­dus­tries. Rather, what made 77 per­cent of the bil­lion­aires: in­vest­ments. On a na­tional level, even coun­tries with no nat­u­ral resources can man­age to ac­cu­mu­late wealth through in­vest­ment.

In­vest­ment in Kuwait

In­vest in the petroleum sec­tor: By re­mov­ing plas­tic bags from su­per­mar­kets, money can be saved for the de­vel­op­ment of Kuwait’s econ­omy. Plas­tic bags are made from crude oil and nat­u­ral gas - both non­re­new­able en­ergy sources, mean­ing they are in lim­ited sup­ply. Not to men­tion the pol­lu­tion cre­ated by plas­tic bags on land and sea. In many su­per­mar­kets around the world, shop­pers must bring their own reusable bags to cut down on un­nec­es­sary waste and pol­lu­tion of plas­tic bags. This ap­proach could have a real im­pact on Kuwait’s petroleum base and free up money and resources for in­vest­ment.

How in­vestors think? High in value but low in price: Av­enues Mall: Ac­cord­ing to Few Lessons for In­vestors and Man­agers, Pe­ter Bevelin high­lights that the value of some­thing does not de­ter­mine its price. Two of my friends and I went shop­ping the other day to the Av­enues mall. Ab­dul­rah­man, a good friend of mine, paid KD 150 for a Louis Vuit­ton wal­let. Yousif had a dif­fer­ent ap­proach. He went to H&M and bought a wal­let for only KD 15. When both of them laid their new wallets down on the ta­ble, I could hardly tell them apart. Both wallets were brown and a zip­per made them look sim­i­lar. When the value of two things are scan­dalously equiv­a­lent, but with dis­tinct prices, buy the one with the lower price even if you can af­ford the more ex­pen­sive. Brand names mean noth­ing once the value of two ob­jects is the same. This is in­vest­ment.

Buy­ing used stuff: Hawaly: The lat­est iPhone 6 was just re­leased from Ap­ple. But have you ever thought of buy­ing it used with 50 per­cent off? Why buy a brand new iPhone when you can buy a used one? Not only it is still in good qual­ity but you can save as much as 50 per­cent! You will find plenty of used iPhones, lap­tops, and prin­ters across Ibn Khal­don Street in Hawally. Buy­ing used stuff, such as used cars or other phones is a tech­nique in the hands of in­vestors.

The next time you ever think about buy­ing some­thing, think log­i­cally, think math­e­mat­i­cally, if the great­est math­e­ma­ti­cian was alive, he would have surely shook my hands for my in­ven­tion of this in­equal­ity: value > price not price < value. When­ever you go shop­ping re­mem­ber this prin­ci­ple: the price of the ob­ject must be lower than the value. This is the se­cret of in­vest­ment and bud­get plan­ning.

In­vest­ment and Bud­get plan­ning:

Hav­ing an in­vest­ment or a bud­get plan is very help­ful. With it you can es­ti­mate your in­come, your planned ex­penses, your planned sav­ings over a cer­tain pe­riod of time and even max­i­mize your in­come. A good record of sav­ing also helps peo­ple set pri­or­i­ties for spend­ing. To plan for your bud­get here are seven steps from the eco­nomic ex­perts of Glen­coe to help:

• Step 1: Set Your Financial Goals: What do I want to ac­com­plish in the next year? The next month? Are my goals re­al­is­tic and prac­ti­cal? An in­vest­ment plan can help you de­ter­mine which goals you can meet.

• Step 2: Ap­prox­i­mate Your In­come: In­clude all your sources of in­come. Start by record­ing your es­ti­mated in­come for the next month.

• Step 3:: In­vest for Un­ex­pected Ex­penses and Sav­ing: You have to plan for ex­penses such as food, rent and cloth­ing to sat­isfy your ba­sic needs. You must also plan for un­ex­pected med­i­cal vis­its or ac­ci­dents. Luck­ily, if you are a Kuwaiti cit­i­zen your gov­ern­ment pro­vides free health care. But you should plan for your ex­penses to in­clude rises in costs of cer­tain things, such as gaso­line.

• Step 4: Save for Fixed Ex­penses: Those in­clude ex­penses that are fixed and reg­u­larly paid such as rent, a car loan or in­sur­ance.

• Step 5: Bud­get for Vari­able Ex­penses: Some ex­penses change from time to time and can be con­trolled eas­ily. They in­clude eat­ing out, cer­tain goods, phones charges and en­ter­tain­ment. The amount of th­ese ex­pen­sive vary from month to month

• Step 6: Record what you spend: There are many great apps now avail­able to help record your bud­get. Know­ing where your money goes each month will help you learn to spend more wisely and save ac­cord­ingly.

• Step 7:: Re­view Spend­ing and Sav­ing Pat­terns: In­vest­ing is a con­tin­u­ous process there­fore, re­view your bud­get each month.

Al-Mutawa is a stu­dent at the Amer­i­can Univer­sity of Kuwait.

Newspapers in English

Newspapers from Kuwait

© PressReader. All rights reserved.