About investments: from the poor rich man to the elderly billionaire
Every one of us dreams of having a passive income. To have money without doing anything, what could be more wonderful?
One type of passive income - it is an investment, when invested money brings a steady income.
Where did investing come from, and what interesting investment-related cases have happened in the financial world?
A historical tour.
Surprising as it may be, investing predates the full-fledged financial markets. As evidenced by the findings of archaeologists, the investment of material funds for their growth took place before our era.
Man very quickly came to realize that simply keeping money does not make anyone rich. One of the topics in the educational system of the ancient Babylonians was precisely the management of finances and their profitable investment.
However, the word "investor" itself has not always had the meaning that we put into it. For example, in the Middle Ages, investors were called managers of the estates of feudal lords, and investment meant land lease. It was only with the advent of banks that the word "investor" gradually began to take on its usual meaning.
The most interesting cases in investing
Dutch Tulips
In the 17th century, tulip bulbs began to be brought to Holland from Turkey. The fashion for tulips grew to such an extent that such bulbs were sold and bought everywhere, and for just one bulb of certain varieties one could buy quite a decent house. It even went so far as to sell tulip bulbs on futures.
Everyone knows how the story ended - a huge financial bubble emerged, which plunged Holland into a powerful economic crisis. By the way, many people compare bitcoin investments to the tulip mania in Holland.
Poor Rich Man
Kurt Degerman was homeless for 30 years, living a miserable existence. Like most homeless people, he collected tin cans and bottles.
After Degerman died, everyone was surprised to learn that with the proceeds from the sale of cans and bottles, he bought shares in Swedish companies, which brought him a profit of 12 million Swedish kronor.
It is noteworthy that Degerman did not use a single crown of his income during his lifetime, but bequeathed it entirely to his relative, who was not squeamish about visiting the homeless man.
Mark Twain's Mistake
One day, the famous scientist and inventor Alexander Bell, who invented the telephone and defined the further development of the telecommunications industry in the United States, turned to his friend, the no less famous writer Mark Twain. The scientist needed money for the technical realization of the telephone device he had developed. Mark Twain refused his friend, calling the idea of the telephone nonsense.
So the successful writer turned out to be a worthless investor - this investment, which would now be called a venture capital investment, would have earned Twain a profit of hundreds, if not thousands of percent.
Great compound interest
In long-term investing, compound interest is very often used. Special formulas are used to calculate them, but in simple terms, this is when interest is added to the amount of the deposit or investment and, subsequently, interest is also accrued on it.
Despite its apparent simplicity, compound interest has fascinated the most eminent people. Albert Einstein considered compound interest to be humanity's greatest mathematical discovery. Rothschild called it the eighth wonder of the world, and Warren Buffett considers it a necessary part of any long-term investment strategy.
Warren Buffett is the king of investors
American Warren Buffett is considered the world's largest investor. Having started his financial career at the age of 11 with $100, the 88-year-old Buffett now has a fortune of more than $77 billion.
Despite owning such an astronomical sum of money, Buffett has a modesty that many people could use. He loves to eat fast food, lives in an ordinary house and does charity work. Warren Buffett holds a peculiar record in this field - he donated 37 billion dollars to five different foundations.
To become an investor nowadays, it is not necessary to possess exorbitant sums of money. It is enough to have a small initial capital and a firm desire to receive a passive income. The main thing is not to stand still, because the longest way starts with a single step.
You will also be interested in
What PAMM services should NOT be trusted? 5 PAMMs I don't invest in
Why are ruble deposits more profitable than foreign currency deposits?