How to know to invest in the right business?

If you know yourself that you are ready to invest, you should start right away because time wait for no one. Also, there is never a right time to start to do something. For me personally, anytime is the right time ..... most important is not the time, is yourself..... are you ready?

We have talked about "Investing In Yourself first" and if you have done that, learn all you can and continue to learn, you are on the right track. Of course, nobody can be perfect in investing, sometimes the experienced and the experts make mistakes too. Just make sure that you learn from

According to the book "The New Buffettology", the 4 areas in which Warren Buffet discovers companies with hidden wealth are 1) businesses that have a repetitive consumer need with products that wear out fast or are used up quickly and have brand appeal 2) the advertising business 3) businesses that provide repetitive services that people and businesses are consistently in need of 4) products that most people have to buy at some time in their life.

These 4 areas are very closely related to consumer demand and expenditure. In summary, they are a business simple to understood, with good managment, attractive prices and has long term prospects.

The above guidelines will show you these mistakes and grow with them. Always stay positive."How to invest in the right business"? There are many avenues for investing but what categories are for you.... you have to decide that base on your disposables and your risk levels. Lets analyze the options we have .......

• invest in one business by oneself, be an entrepreneur
  
• joint venture with some friends or business associates
  
• join a reputable direct selling company; multi-level marketing
• invest in the stock market
• invest in property
  
• invest in mutual fund
  
• invest in Fixed Deposit

invest in one business by oneself, be an entrepreneur
joint venture with some friends or business associates
There are lots of successful businesses out there for you to emulate but for a business to be worth your money and effort, you must be able to leverage your time, money and location. Also, the ROI must be quick and the income you are going to derive from this business must be able to beat inflation. Not to mention the facts that you have to know the business you are going into and for option2, you need to be in business with trustworthy people.

I always believe that "there is never a free lunch" so do not expect to throw in your money and your partners will work their butts out to earn a steady income for you.

join a reputable direct selling company; multi-level marketing
Lets look at option3, direct selling. This option is good if you really have very little capital to start with because in this case, you leverage human power by multi-level. Ensure that you join a reputable company with proven track records. Another point to note is that the products you are selling are repetitive consumable products. If you are successful in this line of business, the compounding factor works.

invest in the stock market
Buying stock are like buying businesses, you have to know how to buy into the right business for the long term returns. If you are a working person and are buying into stock on a part time basis, go for the good fundamental stocks, one that give you good dividend returns. The value of the company is dependent on the present value of its future cashflow, a business that you buy must be simple and have predictable future cashflow. A company with a turnover of RM500mil a year is considered one of the key players in the market.

Sometimes companies with new technologies look like a good opportunity to earn quick and big bucks but I would rather advise that it is safer to rule out this great opportunities if you do not understand how these businesses generate their cashflow. Avoid going with emotion when investing in stock. Used the head not the heart.

invest in property
Buying houses and shoplots are a good investment but this require some capital. If its a new property sometimes you can get good deals with the property developers who has tie-in with the banks for a zero-cost deal, meaning they (bank and developer) will absorb the legal fees and other related costs. Buying a property is a permanent deal, your cash are tied in for long term. It will take time to liquidate, therefore it is important that you do your homework before venturing into this type of investment. Ensure that your property is in demand for rental or sales with a good return. It is not easy, but if you are intending to rent out your property, to be worthwhile you need to get around 8 to 10 percent return per annum.


invest in mutual fund
Investing in trust or mutual funds is similar to buying stocks....the only difference is it removes the emotional strain from you because you are employing some investing expert to study the stocks and make the decision on what company is best to invest in. Other advantages are you get to diversify, you can start invest as little as RM1000 and your money are being compounded.

invest in Fixed Deposit
Fixed deposits is good for "parking" your fund for temporary measures, for the "just in case" scenario. Meanwhile, your money is earning money for you.