Invest in What You Know

Almost every book I've ever read advises you to invest in what you know. I've found this to be some of the best advice when decided where to put your money. In all of our lives we are surrounded by terrific sources of inside information. In my case, I work for a major restaurant chain. Every day I work, I see what goes on there. I see the products that sell the best and the ones that don't sell well. I have access to the packaging the products are delivered in, so I've been able to determine which companies the best selling products originate from. Then I'm able to look up the information on each company and determine their profitability and decide on the ones I think would make the best investments. Since our restaurant is part of a national chain, I know that all the other restaurants are ordering the exact same products. From this type of inside information, which is perfectly legal, I've been able to make some terrific investments in 4 great companies and have my eye on 2 more that I'm waiting to purchase stakes in as soon as the price is right. Another example of a type of inside information that is available to everyone would be the people you do business with personally. Who do you write checks to every month? Are they a publicly traded company? I've found it a lot easier to part with my money when paying the phone bill or the electric bill when I know that every quarter they are going to give me some of my money back in the form of dividend payments. A few more things to think about, where do you shop? Where do you go out to eat? Have you looked in to the stocks of the companies you frequent the most. Chances are very good that your not the only one going to these places over and over again. Take the time to look up their stocks. You'd be surprised how many of these companies may be way more profitable than you might think. Maybe they're not the ones you hear about in the news all the time, but then again, by the time they're in the news, they're usually over priced and ready to drop. Best to find these gems before they hit the news. I really love the idea that when I leave my job, even though they have no retirement program, I'll be making money off of them for years to come through the stock dividends I receive from the companies they do business with. So instead of trying to keep up with the latest trends or to try and figure out how the latest tech companies are going to make money, invest in the companies who make the products and deliver the services that you use on a regular basis. You already know how they make their money.