The following is a great exercise that enables you to think like an investor. And its fun, too!
Everything in life is investing: You use a set of resources in order to obtain something, which value is greater than the sum of those resources. Be it “investing” in its classical meaning or anything else created in life.
For example, your work. Is it investing? Of course! You invest one of the most important resources, your time, in order to obtain a return, a paycheck at the end of the month. This investment can be a good one, if you feel that the payment is OK for the time you have invested, or not. It can also be a risky investment, if you work without any contract or commission-based.
Other example, you buy an mp3 player. Is it an investment? Hell yeah! You spend one of your resources, money, to obtain a result: ability to play music for thousands of hours of entertainment. You would not buy this gadget, if the subjective value you put on its usage was below the price you have to pay, right? It can be a good investment, if you are happy with the player, and it can be a risky one: when its quality is not as good as expected or it goes broken very soon.
There are thousands of examples. Can you think of any?



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December 7th, 2006 at 5:33 am
[...] As stated in my last post about facets of investing that “everything is investing”, what is then financial freedom? [...]