The myth about the one best investment
Question: If you were to pick the best investment, which would it be? Asked at “Ask a Friend, Ask Efren” free service at www.personalfinance.ph and Facebook.
Answer: I had recently taken a fancy to buying a mirrorless digital camera. These are cameras that are not the simple point and shoot, like the instamatic cameras of yesteryears but are also one step down from the professional digital single lens reflex (SLR) cameras.
The advantage with mirrorless digital cameras is that the absence of a mirror allows them to be small and handy, especially if what you want is a better than cellphone camera quality to capture memories during a vacation trip.
Many mirrorless digital cameras also allow for easy transfer of pictures through Wi-Fi or Bluetooth so that sharing can also be faster. And some of the more advanced ones are even capable of capturing 4K videos.
So, I did my research on which mirrorless digital camera would be the best. Well, guess what, even within just this one category there were many models to choose from. But then I came upon this one review that seemed objective enough as it recommended several brands. It also did not recommend the best mirrorless digital camera, just the one that is suited for your needs.
The same goes with investing. There is no one best worldly investment, no one size fits all. Investments are after all, mere tools. Your investment can be determined by the potential return it needs to make. Just look at the wealth formula in MS Excel, rate=(nper,pmt,pv,fv).
The formula means that the rate of return that will determine the investment that is suitable for you is a function of the years you have to grow your investment (nper or number of periods), the periodic amounts you can add to your investments (pmt or payment), the starting funds you can invest with (pv or present value) and the amount that you will need to fund a future goal (fv or future value).
And it doesn’t stop there. If by chance the return you need to make is too rich for financial securities or too risky for you, then you will need to temper the variables in the wealth formula to lower the return you need to make that is commensurate to the risk you want to take.
But if you want to know that one investment that is suited for all and that beats all other worldly investments, it is the investment in Faith. It is only this investment that has absolutely no potential for losses. It is the only investment that provides guaranteed infinite returns for this life and beyond.
(Efren Ll. Cruz is a Registered Financial Planner of RFP® Philippines and a seasoned investment manager. He can be reached at (0917) 505-0709 and at firstname.lastname@example.org. To know more about personal finance, please visit www.personalfinance.ph. To become a true financial planner, attend our 21/2-day training in the Visayas and Mindanao. Details are available at www.personalfinance.ph/fptraining.html.)
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