The Keys to GREAT Investment

The keys to GREAT investment

By Taylor Johnston

Investing follows the same principles and tenants regardless of place in the world, time in history, or medium of investing. It could be college students investing in their future through education. It could be a father investing in their child through time. It could be a businessman investing in a company or idea to help it actualize profit. Regardless of the time, place, or medium there is a common thread to all successful investing, which is made up of key principles and qualities. Let’s dive in and discover them.

1. Purpose: The purpose of investment must be fully known by both the investor and investee. The reason something exists must be understood and easily communicated.

2. Profit: The single most important measure of existing value. How much and how consistent is an investment's profit.

3. People: incentivized operators on growth paths are always essential to operate an entity or to be the customer of the entity.

4. Relevancy: The investment must be in value. A computer in ancient Egypt, was irrelevant thus not valuable. But in the modern era it is of utmost value. In essence, there must be a customer created in the proper place and time to be relevant.

5. Faith: Every investment in anything is placing faith in something that does not exist currently with the hope and expectation it will come to be in the future. The risk is not blind, it is calculated with reason, but it’s not assured so it requires faith.

6. Value-add: All investments should have opportunities for value to be added or increased in the future.

7. Risk measure: All investment is associated with some level or measure of risk. If the placement of value is in hopes that it grows, then it currently is not at that point, meaning there are certainly many possibilities that it would never occur, thus the risk.

8. Compound Appreciation: The 8th wonder of the world is compound interest. All investments should have some future schedule of appreciation or growth. Great investments will compound that appreciation over time.