Being an hub investor requires lots of financial education. It takes the mind of an entrepreneur and understanding how profits and loss affect businesses.
Firstly, I would like to model an investor like Warren Buffett because of his years of experience in investing.
This is because a huge part of his fortune comes through various investment schemes.
Well, just before who proceed to the incredibly qualities of an hub investor.
Let’s share a basic overview of investing and who investors are.
Who Is An Investor?
According to Investopedia, an investor is a person or an entity (such as a firm or mutual fund) who commits his capital into a business with expectations to receive financial returns.
They are known to spot businesses with capacity for growth and always prefer to come in at the early stage.
They believe on passive income and look out for businesses with high profit return margins in a few years to come.
However, investors rely on different financial instruments to earn returns.
Also, they set financial objectives like building retirement savings, funding college educations, or merely accumulating additional wealth over time.
They understand the power of compound interest and use it to their favor.
So, what makes up an hub investor, let us find out.
1. Hub Investors Take Calculated Risks, Other Investors Say; Don’t Take Risk:
Risk management is one of the most important investing skills needed to be a good hub investor.
Every business carries it own risk, It could be risk in production management, manufacturing or conveying goods from one place to another.
Also, it takes good risk assessment strategies to spot small businesses that will be good to invest in.
Remember that a common research shows that most newly startup businesses fail within their first 3 years of operation.
People who know how to take risk will always win no matter the cost.
One of the greatest risk you can ever take is not taking any risk at all.Facebook Founder & CEO, Mark Zuckerberg
2. Most Investors Diversifies, The Hub Investors Focuses On A Goal:
Almost everybody talks about putting money in several businesses all in the name of diversification.
What most people fail to understand is that investing in diverse areas might not be the way out as you are still liable to lose all your money.
Most average investors diversify because of the fears of failure hoping that if one doesn’t work, the others will do.
Well, this sounds like a 50/50 business right, oh yes it is.
Now, can you imagine what it will look like if they loose it all.
Whereas, hub investors are highly focused people.
They aren’t willing to diversify unnecessarily without taking a full grip on one investment.
They are investors that lay hold on a project and smash it out diligently till they get what they want.
There is no point spending money everywhere and lose it all to inadequate management.
3. Hub Investors Uses Debts To Their Favor, An Average Investor Tries To Avoid Debts:
Smart investors are those who know how to work with OPM (other peoples money).
These are investors who use debt to invest because they understand how tax laws works.
They leverage on debts to make money.
The banks reward them with low interest rates for borrowing money.
Also, the government reward these type of investors for creating jobs by lowering their taxes to almost zero percentage.
Also read: 10 Freedom Debt Relief Plan For Loan Takers.
4. Normal Investors Try To Reduce Expenses, Hub Investors Use Expenses To Get Richer:
A business that employs 1,000 employees will have little expenses compared to a business with 10,000 employees.
However, a business with 10,000 employees will generate more revenues compared to a 1,000 workforce business.
Why should I say this? Okay let me explain further below.
Let Us Take A Little Analysis On Production Below.
Let’s also assume it takes 100 men to produce 1,000 cartons of milk.
Therefore, using the same conditions above, it will take 1000 men to produce 10,000 cartons of milk.
Similarly, it will take 10000 to produce 100,000.
Now, Look at the ratio above, 1000 men to 10000 milk and 10000 men to 100000.
If the business owners understand how to reduce production cost and increase workers efficiency, more workforce means more profits to the business.
Hence, on a long run, more money.
These are some of the technical analysis hub investors consider when investing in a business.
They are ready to carry the expenses that yields more profits.
5. An Average Investor Has A Job, Hub Investors Create Employment For Others:
An average investor is someone who works with an organization or a firm and earns a decent pay.
Average investors invest so as not to squander their money.
On the other hand, hub investors are job creators, they create avenues for employment.
These are people who carry unusual vision to do exploit.
The ability to create jobs makes them an entrepreneur and a unique investor.
Also read: 8 Killer Truth You Must Know Before Quitting Your Job.
6. Normal Investors Work Hard, An Hub Investor Works Smart To Make Money:
There is a normal believe among people that working hard is the deal.
Well, this is true but not completely true.
If all you need to do is to work hard then everyone will be a millionaire or even a billionaire by now.
Hub investors work smart, they seek for the easiest ways to do the most difficult things.
They make plans, set business agendas and take steps to accomplish them.
It is true that most people want to sit back and watch their money work for them simply because they want to become investors.
However, over 75% end up becoming bad investors because they put money in wrong businesses.
Hence, they run in losses that drain them off financially.
On the other hand, good investors succeed by applying some unique investing strategies.
They use financial instruments to analyze their winning potentials.
Others secure themselves by investing in stocks, bonds, mutual funds, commodities, derivatives and real estates businesses.
Note that investors are not traders, hence they plan for long term agendas and build their portfolios in businesses.
In conclusion, I will say good investors are driven by success, growth and the passion to do exploits.
What do you have to say about being an investor, drop your thoughts at the comment section.
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