How to make money
These rules, known as Casson’s “12 Rules for Success,” help people who earn capital not lose it.
1. You need to invest only in what you understand.
Do not experience any illusions that any business in which you invested money will bring profit.
2. You can not invest money under pressure.
You were persuaded, you were deceived, they pressed you. No, it’s you who allowed yourself to be persuaded, deceived, pressed. Although it was immediately clear that if you are pressed and you are inwardly resisting, then it is not your interests that are upheld. In the world there are a lot of scammers who use this method.
3. Money must be made on property, not on plans.
Property, according to Casson, is of inherent value. The property exists real today and will be real tomorrow. It can always be turned into money: sell, mortgage, lease.
4. Money must be invested in what can then be sold.
And so that the purchase does not become a “dead weight”, it must be remembered that your attitude to the subject of purchase may soon change, and you will want to get rid of it. The higher the uniqueness of the item you bought, the more difficult it will be to sell it later. An ordinary thing is always easier to sell.
5. Take your profit.
In business, the most important thing is profit. If you regret tomorrow that you did not sell something today, then you have missed the profit.
6. Listen to your banker.
Financial affairs are a very tangled ball of thread, which no one can untangle to the end. But there are people, for example, bankers who have been involved in this business all their lives and therefore know more about it than you. Trust them.
7. You need to buy at a time of lowering prices, and sell at the time of raising.
Everything seems to be clear here.
8. Keep money in circulation all the time.
The most important rule of finance is that only the movement of capital makes a profit. In order to increase the size of capital without resorting to loans, you just need to increase the speed of its turnover. We must learn to sell. This is better than paying interest.
9. Borrow as much as you can invest in the business.
A businessman must have the courage to take credit. At the same time, of course, you have to take risks. But without risk, you can only save what is, but not multiply. Just money will not make a profit. Money multiplied by brains. One must think how to use capital and what kind of capital is needed.
10. Borrow for development, not for boasting.
Many firms went bankrupt precisely because they could not distinguish one from the other. Development is associated with increased sales, and boasting with the desire to splurge.
11. Never lend.
It brings neither profit nor gratitude. On the contrary, the opportunity to make a profit is missed.
12. Bet on the industry and observe price fluctuations.
It is clear in advance that this rule will not be for everyone. It means the following. All industries are experiencing ups and downs in their development. If you buy the shares of the best enterprises of the worst industry in a period of falling prices, then you can expect good profits in the future.