Hay together!
By choosing to read this post you have done a step into financially benefits. Firstly, you have already thought about how you can multiply money and secondly you decided to do something for it!
It is important that you maintain this decision until the end (is there an end? :P)
Since if you read all this and then do nothing, nothing will change and furthermore you won't be successfull.
YOU! have to initiate the steps. YOU! have to make other decisions, because YOU! are the only one who is responsible for your prosperity! Everybody wants to raise their finances, however, many only talk about it. They don't act. Just a few strain to inform themselves and use the won knowledge to move on.
You just really have to want it and not only dream about it.
Fulfill your dreams and wishes!
So once again: And notice it! To reach something, you must act and not only dream about it!
What you need
- A financecalculator
You need a finance calculator to provide the predictions.
Therefore you go on www.google.com and type in „finance calculator download“.
Then you can download the calculator. We will talk about the calculations later. Don't worry, it is pretty simple.
You demand an exemption order at the bank that manages your shares. The bank will send it by e-mail to you.
The exemption order causes, that you save taxes up to a capital profit of ~ 800$, provided that you are single.
Up to 1600$€, if you are married (depends on your country).
Depot at a bank
A depot manages your shares. Most banks will create a bankdepot for their customers.
Besides, you can see company datas, charts, etc. You are also able to practise the strategy with shares there because you can create so-called pattern depots. At financial sites you'll find data (basic data), you will need them for the calculation.
To do so, you need to type in the name of the share which data you need.
Let's get it on
Now you have everything you need, now the hunt for high yields can begin!
1.)
First of all you judge the enterprise in which you want to invest, subjectively.
The share / the enterprise has to have a strong brand.
You consider which brands you have met in your life over and over again (e.g., "Coca Cola").
Coca Cola owns some sort of a monopoly. Everybody drinks Coca Cola and you are able to buy it everywhere.
In a store, restaurant, café, cinema, supermarket,grocery, etc.
It has always been drunk with pleasure,it is still been drunk with pleasure
and there will probably be no change in the future!
2.)
Does the enterprise show high obligations? It is already a good sign if not.
Are the profits of the company higher than the debts? Pay attention that this does apply.
3.)
Does the enterprise invest its capital into business they know about? (research at Google)
4.)
Does the enterprise raise their income per share sustained?
Exp.: Year: 2012 2013 2014 2015 2016 2017
Increase per share: 1$ 1,3$ 1,9$ 2,2$ 2,6$ 3$
Sustained means, that the profit per share increases every year at a high amount of money.
You can work out the compound interest for the term you want to hold the shares with the finance calculator if
You have read the neccessary steps further below. The growth in the example above is suitable for us.
5.)
Were share repurchase made? (Google research)
6.)
How does the company capital yield look like? Was it exeptionally high during the last years?
15% should be a good amount.
7.)
Does the enterprise need much money to renew their arrangements? Does it have high costs at
development & research? If the answer is "no" it looks good.
8.)
Can the enterprise freely determine about their prices? For example, Mc Donalds is able to do this.
Earlier the cheeseburger was less expensive than nowadays. However it becomes more and more expensive,
it is bought as often as earlier.
After you have processed the points, you are now able to separate the companies that will
work from those which won't.
CALCULATIONS
First of all you have to determine the increase per share of the last 5 years. That's how you do it:
You have to look for your share or company and search the "basic analysis".
Then take the increase per share from 5 years ago (if today is 2017 you need the data from year 2012) and
paste it into the field "start capital" of the calculator.
Next you do the same with the value that is given 5 years later (2017 in this case).
This value needs to be pasted into the field named "end capital".
As requested size you choose "Interest rate". And you put the "term" on 5 years. In the end you click on calculate.
Now you have the interest rate. For the next step you take the increase per share from 2017 and paste it into
"start capital".
After that you change the requested size to "end capital" then click on "calculate".
Now you have calculated a 5 year forecast of the increase per share from your company.
Now you take the CPRs (course profit relation) of the last 5 years and add
this together, then divide the result by 5 (you calculated with 5 years). Now you have the
average value of the CPRs. You multiply the value by the forecasted profit increase per share (here: from 2022)
and you will get the course of the share (here: in the year 2022.)
To be on the save side you need to take a low CPR!
YIELDS
Now we getto the last step:
Type in the current course of the share intoe the field "start capital" and the course from the
forecast into the field "end capital".
As requested size you take "interest rate"and set the term to 5 years.
Now just click on calculate once more.
That is the yield you will probably get. Stick to all these steps.
Last words
The earlier you start, the faster it will grow!
The compound interest effect is such a strong power of making money like no other!
Let's say, you deposit 100,000$ with an interest rate of 20% and wait 30 years.
Then your final capital would be astonishing 23,737,631.38$!
A GIANT increase. And just with compound interest and time! Without work or effort.
Last but not least, one more example to demonstrate the power of the compound interest
and how important it is to start very early!
We compare two investors. Both are 19 years old and have an interest rate of 10%.
Investor 1 pays, from the 19th year for 7 years, yearly 2000$ to his bankaccount.
At the age of 26 he will have 20,871.78$ on his account.
Investor 2 pays, from his 26th year for 39 years, yearly 2000$ to his bankaccount.
At the age of 65 he owns 973,703.62$.
And now the astonishing part: Investor 1 who has deposited for 7 years (but 7 years earlier!),
owns nearly the same amount of money at the age of 65 years! There are 930,641.05$!
This example should make clear to you how important it is to start as soon as possible!
You may not surrender. Since then you have already lost!
warning: this information is a theoretical model, don't use it if you are not absolutely sure. Use it for test runs, for example without real money.
Have a nice day and enjoy every weather :)!