Investor

Wikipedia, the free, on-line encyclopedia, defines an investor as "any party that makes an investment."

Check this article out and follow the "See also." The article goes on to say,

The term has taken on a specific meaning in finance to describe the particular types of people and companies that regularly purchase equity or debt securities for financial gain in exchange for funding an expanding company. Less frequently, the term is applied to parties who purchase real estate, currency, commodity derivatives, personal property, or other assets.

The term implies that a party purchases and holds assets in hopes of achieving capital gain or cash flow, not as a profession or for short-term income.

Here is an overlapping, non-exclusive list of investor types:

>Individual investors (including trusts on behalf of individuals, and umbrella companies formed for two or more to pool investment funds)

>Collectors of art, antiques, and other things of value

>Angel investors, either individually or in groups

>Venture capital funds, which serve as investment collectives on behalf of individuals, companies, pension plans, insurance reserves, or other funds.

>Investment banks

>Businesses that make investments, either directly or via a captive fund

>Investment trusts, including real estate investment trusts

>Mutual funds, hedge funds, and other funds, ownership of which may or may not be publicly traded (these funds typically pool money raised from their owner-subscribers to invest in securities)

>Sovereign wealth funds

Also, investors might be classified according to their styles. In this respect, an important distinctive investor psychology trait is risk attitude.

Too many people when they start out want money first. There are many problems with this approach, not the least important being that they start out with a negative on their bottom line. It's much better to take the long, hard way, of working your way into a business. Start small, keep expenses to a minimum, develop cash flow, then use that cash flow to fund the growth of your business.

What do you think about this? Anything grab you? Post a comment.

Entrepreneurship is the life's blood of my professional activities. For entrepreneurial real estate go to www.yourstopforrealestate.com/blog and for entrepreneurial writing go to www.kearneymusicschoolmurders.blogspot/com.

Leverage

From Wikipedia, the free, on-line encyclopedia:

Leverage (or gearing) is borrowing money to supplement existing funds for investment in such a way that the potential positive or negative outcome is magnified and/or enhanced. It generally refers to using borrowed funds, or debt, so as to attempt to increase the returns to equity. Deleveraging is the action of reducing borrowings.

So if I borrow $500, sign on with a lead generation company for $20 a month, and sell a home from a lead I got from there which nets me a $7,500 commission, I've leveraged that $500 pretty effectively.

The problem enters in when you borrow too much and you don't get any result from it. Then, your stuck paying off the loan with nothing to show for it. That's why we have to evaluate clearly the investments we make and make only cost-effective ones.

What do you think? I'd like to know. Post a comment. And read the entire Wikipedia article.

Entrepreneurship informs all my professional activities. For entrepreneurial real estate, go to www.yourstopforrealestate.com/blog and for entrepreneurial writing www.kearneymusicschoolmurders.blogspot.com.