Ever wondered why some earn few thousands a year while others earn lacs and a few others crores. You may think it’s about hard work or how much more time they invest in their job. But we can assume that all are hardworking and are all motivated to work harder to prosper in life. We all have 24 hours to work. What’s the difference then? The answer is simple, the nature of the career. Here, I am going to share with you 5 reasons why investing as a career is the best line to follow.
1. Extremely Scalable – Every job that we do has its own limitation, as to its economic reward. For example if I have a shop for making and selling Samosas/ Pakoras, I need investment, manpower and then demand for my product. Given a certain amount of investment, manpower and demand I have a limitation as to how much I can make and sell. This means I cannot go beyond a certain capacity and therefore my earnings are also limited. If I am doing a job I cannot expect a salary beyond a certain point. Investing as a career, has virtually no limitation. The more you earn the more you can invest. In investing the money earns for you even while you are sleeping because the companies that you have invested in work 24 hours while they also expand their capacities on a continuous basis. Stock markets globally have a market capitalization of about $50 trillion. That is the size of investing opportunities.
2. Better Economies of Scale – In most of the careers in service/ manufacturing sectors you need inputs like manpower, materials, funds etc which have a cost involved. You have to increase the use of all these inputs in order to expand for growth. In other words to increase your income your variable costs also increase in more or less the same ratio which keeps your operative margins in a close range. Investing as a career offers the world’s best economies of scale. The advantage with investing as a career is that your energy and time involved is same irrespective of the size of your investment. The inputs of investing are few, a paper, pen, calculator, internet and knowledge of finance. Add to it, the most important, is your research.
3. Regular Cash Flows – To keep your business running, you need to keep rotating your money. At some point, individuals and businesses may go bankrupt, not because the business can’t create profits but because of cash crunch. That is not the case with investing as a career. You can invest/ disinvest any time, buyers and sellers are always available. Plus, investing as a career allows you to keep receiving cash and dividends from the companies.
4. Ease of Investment or Disinvestment – There are good and bad times in business. There is no easy way to exit out of a business or job. That is not the case with investing as a career. Here, the good moments are characterized by investing aggressively with additional funds. This way we can multiply our wealth. In bearish periods we can completely shift our investments into interest earnings based debt securities, completely avoiding risks of equities.
5. Freedom with time. For somebody to do well in a career you must have a lot of free time for yourself to ponder over your vision while everything is running smoothly. While the best CEOs work for your companies you have invested in. You can spend time searching for new avenues of investments to build a bright and a prosperous future.