Types of Investors: Which One Are You?
An investor can basically be defined as a person who
allocates capital/money with the expectation of a future financial return –
usually a profit.
With the capital, the investor can put the money in real
estate, a commodity, debt securities or any other system, like the Online
Digital Airtime Distribution system at the First and Fast Communication System.
There are three major types of investors. Knowing which one
you fall under will help you know the consequences of your investment type and
decide if an opportunity available is worth investing in or not.
At the end of this article, you should be able to know the
kind of investor you are, and the benefits that come with it.
Pre-Investor
This is basically a
person who is not investing in anything. Pre-investors don’t have any financial
consciousness or awareness. They don’t think of investing at all and have
little or no investment to show for.
Most of the
pre-investors live on a hand-to-mouth-basis. Once they get their salary, they
spent it all, hoping their financial situation will be better in their next payday. When they earn more, they spent more – to them, lifestyle is important
than their future financial security.
Passive Investor
This is the most
common starting point for many people who think of securing their financial
future – they are individuals who graduate from being pre-investors.
It is estimated that a
majority of investors – actually over 90 per cent fall under this category.
Also Read: Understanding the Five Levels of Investors
A passive investor is
an individual who looks at his financial planning like; own home and save 10
per cent of his/her earnings. It is a strategy that will help guarantee your
financial security – if you start early.
Being a passive investor works best for people with families, jobs or entrepreneurs most of who
depend on other people’s expertise for their investment strategy.
Active Investor
The foundation of an
active investor is built on the strategies of a passive investor. Active
investors handle their wealth like a business.
A major difference between
an active and passive investor is that active investors depend on two sources
of return in one investment: receive market-based passive returns and also gain
value-added return stream based on skill.
One major advantage of
being an active investor is that you make money regardless of market conditions
or direction – and losses are minimal in periods of adversity – this ensures
increased returns and a low risk to an investment.
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We are here in case you have a quality question or questions before getting started.
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Joshua Cheloti
Joshua Cheloti is a digital journalist and an experienced content creator with demonstrated writing skills on a variety of topics ranging from digital investments, business and technology.
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