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evaluate investment opportunities

Evaluate Investment Opportunities – the right way

Whether we are in business, or are investors, or simply looking for ways to get ahead and be better off, we need to have a process  to evaluate investment opportunities and decide which is right for us.

Despite the encouragement to be “action takers” in many sales pitches, there is a certain amount of consideration to be given to any proposal.

In fact, most of us know that it is common wisdom to take some time to “think about it” but the trap here is consequential INACTION.

Instead of “thinking about it” we need to actively EVALUATE  it.

If we don’t have a formula for how to evaluate Investment opportunities, then the “thinking” is usually done by our subconscious mind, which throws all kinds of fears and objections to us, in order to keep us “safe” and right where we are.  And then time goes by, and everyday life gets in the way, and the opportunity fades into obscurity and passes us by.

The best way to evaluate investment opportunities is to give ourself a definite timeframe in which we are going to complete this evaluation.   And after that it’s a definite YES or NO, based on sound reasoning.

 

Evaluate Investment Opportunities in 5 Simple Steps.

 

1.    How badly do I want what this opportunity is promising me?

A lot of opportunities are manufactured specifically to excite the greed gland. (We all have one – some are more well developed than others!!)
What is the exact projected outcome of the opportunity?

KEY QUESTION:
Do I want this outcome more than I want to keep my money in the bank, or time and energy at my disposal.

2.    How do I feel about this opportunity?

Everyone processes information differently,  however feelings should always be given some attention.

If we’re sublimely excited – we need to force ourselves to do the following steps, and put on our logic and rational hats.    A high level of excitement usually means our greed gland has been activated and that we are NOT thinking rationally, and may overlook other important factors.

If we’re feeling a vague sense of uneasiness, even though the opportunity looks ok, we need to take a closer look at what the thoughts and beliefs are that are producing that feeling.

What are we afraid of?

We need to be very honest with ourselves about this.

Our subconscious mind uses fear to protect us, and keep us safe, which usually means keeping us right where we are now. Because of this, we need to investigate our fears, and see if they are well founded or not.  (Most of the time they are not. Its our safety mechanism at work.)

Do we need to take notice of our fears, or face them and go on anyway?

Do we have a philosophical objection to an element of the opportunity?

If so – we need to name it, and write it down.  This objection will be founded on a belief, or value that we believe to be true.  We need to take a moment to question whether that belief or value is still working for us, or whether it needs to be challenged.

Here’s an example:  Tom considers a wealth creation package and discovers he has a philosophical objection to wealth creation.  He believes that the rich get richer, and the poor get poorer, and that’s not right.

Tom needs to ask himself:
•    Do I really believe this to be true?
•    How does believing this serve me?
•    How does believing this NOT serve me?
•    How would believing an alternative to this serve me?
•    Can I find an alternative to this belief that seems right and correct and serves me?

KEY QUESTION:

After evaluating my feelings about this opportunity, have I eliminated everything that would prevent me from saying YES to this opportunity?

3.    Is there hard evidence that it will get me to where I want to be?

Does it actually promise the outcome we want?   And if so, is there solid evidence that it has done this for others before me?

Many opportunities are forward looking, and don’t have reliable evidence.  This means the risk of not achieving the promised outcome is higher than it would be if there was evidence.  This is not to say they are shonky.  They are just unproven, and carry a certain degree of risk of not achieving stated outcomes.

It is very important to understand the difference between investment and speculation.  Investment carries a much higher probability of reaching the projected result, because it’s been done before, or the indicators for success have been shown to work before, and they are present now.   Speculation is absolute positive thinking and guesswork – basing lots of hope on an outcome that could possibly happen if enough planets happen to line up at the right time.

KEY QUESTION:
Has this opportunity produced the stated results for others before me?

 

4.    What loss am I risking?

What could I lose if I say yes?   Is there any way to minimize this risk to my satisfaction?

What could I lose if I say no?   Am I happy to sustain this loss?

KEY QUESTION:
Am I comfortable with what I might possibly lose, to achieve the promised gain by saying YES to this opportunity?

5.    Will the process and the outcome be consistent with my values?

Can I picture myself engaging in this opportunity, and doing what is required with a light heart, or a heavy heart?   (If it seems heavy – that is probably because there is a values clash.)

** Important Note:  Opportunity Engagement often requires us to CHANGE some of our values, in order for us to be successful.  So if we identify a possible values clash, we need to ask ourselves whether we are prepared to make a change to our values hierarchy.

For example, if our relaxation time in the evenings is really important to us now, and we are considering actively getting involved in investing in direct shares, we know that it will take extra time at the computer, researching and monitoring, and it is our relaxation time that will be affected.   Are we prepared to place a higher value on growing our net worth, than relaxing?   If we ARE prepared to change our values hierarchy, to enable us to do what it takes, then this will create that lightness of heart.

KEY QUESTION:
Is taking this opportunity, and engaging in it going to be consistent with my (adjusted) lifestyle values?

Summary of the Key Questions, and their correct answers, in order to say YES to the opportunity.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Do I want this outcome more than I want to keep my money in the bank, or time and energy at my disposal. Yes
After evaluating my feelings about this opportunity, have I eliminated everything that would  prevent me from saying YES to this opportunity?Yes
Has this opportunity produced the stated results for others before me?Yes
Am I comfortable with what I might possibly lose, to achieve the promised gain by saying YES to this opportunity?Yes
Is taking this opportunity, and engaging in it going to be consistent with my (adjusted) lifestyle values?Yes

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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