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Fee-only
Financial
Planning

The GOLD Company does not sell any products and is compensated ONLY from the company's clients. No commissions are taken on any products.

I sincerely enjoy meeting people and getting to know them. The Gold Company strives to return calls promptly and takes a genuine interest in your needs. I work hard to personalize a plan that best fits your needs, budget and future.

The Money Prof

Friday, May 1 2015

Building Financial Wealth with Investments

Personal financial wealth means having enough net worth to have the funds necessary to meet your desired goals. Let's face reality. Someone with $2,000,000 in net worth (calculated by taking one's assets minus all debt) is probably in better financial condition than someone with $200,000. Of course, everything is relative. Most of us will not inherit fortunes of money while we are in our younger years or if ever. Becoming educated and getting a good job is the most important route to building financial wealth.

I often tell students in my personal finance classes, that saving and investing, beginning as early as possible, is an excellent way to building financial wealth. All the monies that are spent on non-appreciating expenses and assets, result in great opportunity costs towards saving and investing.

The goal of investing is to make money. That means to make a profit or to have a positive investment return. There are really only two types of profits that one can make: income returns and capital gains. Income can come in the form of interest or dividends. Capital gains occur if assets appreciate in value.

Take any investment. For example, buying stocks. The investment objective of buying most equities (stocks) is capital gains. Many stocks also pay dividends. Bonds, on the other hand are purchased primarily for income (interest). Capital gains can be realized if bonds are sold for a higher price than the cost basis.

Another investment may be real estate. On rental income properties, Income is derived from rents and other income generating sources. As rents increase, the value of the properties will increase, resulting in capital gains. A primary residence is generally not considered a source of income. When the residence is sold, there is however, potential to realize good capital gains. Finally, let's take a look at what the profit incentive is to buy a business. Same thing: income/capital gains. The income is derived from the earnings of the business (revenues minus expenses) and as the business prospers, eventually it can be sold at a capital gain.

The wealth of the richest has been a function of their success with investments. So, think about this, start small, but do yourselves a big favor and get started investing now.

The GOLD COMPANY will help you achieve financial well being.

Offering the following services:
  • Investment Portfolio Assessment

  • Portfolio Development

  • Securities Portfolio Management

  • Retirement Planning

  • Insurance/Risk Management Review

  • College Planning

  • Real Estate

  • Estate Planning

  • Business Analysis

OFFICES IN MAINE AND FLORIDA

145 Newbury St.
Portland ME 04101
207-650-7884
moneyprof.oob@gmail.com
6427 Tiara Drive
Boynton Beach, FL 33437
561 894-8436
moneyprof.oob@gmail.com