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Ojijo’s Investments Club ManualOjijo         Is it not time I got my money working for me?
Ojijo’s Investment Clubs Manual!                                                                                          ...
Book Title:   Ojijo’s Investment Clubs Manual                                  Ojijo’s Investment Clubs Manual! Copyright ...
Ojijo’s Investment Clubs Manual!                                                                                          ...
Ojijo’s Investment Clubs Manual!                                                                                 Contents!...
Ojijo’s Investment Clubs Manual!WHAT IS AN INVESTMENT CLUB?                                                               ...
Ojijo’s Investment Clubs Manual!   investment club, we must find our dream and stand by it. ‘A man who stands for   nothin...
Ojijo’s Investment Clubs Manual!      ¥ The Goals & Objectives                                                            ...
Ojijo’s Investment Clubs Manual!   and goals. Members should keep in mind that the ultimate aim of an investment   club is...
Ojijo’s Investment Clubs Manual!   who appoint and oversee management of the corporation. While an investment   club could...
Ojijo’s Investment Clubs Manual!INVESTMENT CLUB INVESTS, IT IS A BUSINESS, NOT WELFARE CLUB                               ...
Ojijo’s Investment Clubs Manual!   investing is more than simply hoping Lady Luck is on my side. Investing is not a   get-...
Ojijo’s Investment Clubs Manual!        talents and skills; realize my potential; and achieve my dreams & aspirations     ...
Ojijo’s Investment Clubs Manual!        order to solve a problem or serve some purpose. Technology Assets can also        ...
Ojijo’s Investment Clubs Manual!   for money. The rich work to build assets that will make money work for them.   Riches p...
Ojijo’s Investment Clubs Manual!Investing is one of the major missing pieces in many financial education programs. I   am ...
Ojijo’s Investment Clubs Manual!                                              • What Is My Dream?                         ...
Ojijo’s Investment Clubs Manual!   my goals and to do’s, and this will rub onto other people around me as they see   the e...
Ojijo’s Investment Clubs Manual!Today, I will become a no-limit person! I believe in Mark Twain, ‘it matters not the  size...
Ojijo’s Investment Clubs Manual!To believe my dream, I will set realistic, believable goals. Goals I can believe in. My   ...
Ojijo’s Investment Clubs Manual!   when I have achieved it. And after describing my dream and defining my goal, I   will f...
Ojijo’s Investment Clubs Manual!   yesterday, my today would be pillared on nothingness; hopeless. ‘We are what we   repea...
Ojijo’s Investment Clubs Manual!Today, in achieving my goals, I will apply the Pareto Principle, invented by the  Italian ...
Ojijo’s Investment Clubs Manual!   or self-actualize. Fidel Castro captured this essence when he wrote that, ‘If   Mohamme...
Ojijo’s Investment Clubs Manual!   Napoleon Hill. A Luo proverb says, ‘Alone a youth runs fast, with an elder slow, but   ...
Ojijo’s Investment Clubs Manual!Budgeting helps to save: Budgeting is vital to any savings strategy. It helps me to  ident...
Ojijo’s Investment Clubs Manual!      financial goals. The primary aim of a budget planner is to ensure savings after the ...
Ojijo’s Investment Clubs Manual!                           • Principle 3: Saving-2-Invest!                                ...
Ojijo’s Investment Clubs Manual!                          • Principle 4: Long Term Investing!                             ...
Ojijo’s Investment Clubs Manual!   market is a long-term proposition, and I may only see my contribution increase in   val...
Ojijo’s Investment Clubs Manual!   emerging markets, and the appropriate amount of bonds. Diversification is the   closest...
Ojijo’s Investment Clubs Manual!    PORTFOLIO: A combination of different investment assets mixed and matched for the     ...
Ojijo's investments club manual
Ojijo's investments club manual
Ojijo's investments club manual
Ojijo's investments club manual
Ojijo's investments club manual
Ojijo's investments club manual
Ojijo's investments club manual
Ojijo's investments club manual
Ojijo's investments club manual
Ojijo's investments club manual
Ojijo's investments club manual
Ojijo's investments club manual
Ojijo's investments club manual
Ojijo's investments club manual
Ojijo's investments club manual
Ojijo's investments club manual
Ojijo's investments club manual
Ojijo's investments club manual
Ojijo's investments club manual
Ojijo's investments club manual
Ojijo's investments club manual
Ojijo's investments club manual
Ojijo's investments club manual
Ojijo's investments club manual
Ojijo's investments club manual
Ojijo's investments club manual
Ojijo's investments club manual
Ojijo's investments club manual
Ojijo's investments club manual
Ojijo's investments club manual
Ojijo's investments club manual
Ojijo's investments club manual
Ojijo's investments club manual
Ojijo's investments club manual
Ojijo's investments club manual
Ojijo's investments club manual
Ojijo's investments club manual
Ojijo's investments club manual
Ojijo's investments club manual
Ojijo's investments club manual
Ojijo's investments club manual
Ojijo's investments club manual
Ojijo's investments club manual
Ojijo's investments club manual
Ojijo's investments club manual
Ojijo's investments club manual
Ojijo's investments club manual
Ojijo's investments club manual
Ojijo's investments club manual
Ojijo's investments club manual
Ojijo's investments club manual
Ojijo's investments club manual
Ojijo's investments club manual
Ojijo's investments club manual
Ojijo's investments club manual
Ojijo's investments club manual
Ojijo's investments club manual
Ojijo's investments club manual
Ojijo's investments club manual
Ojijo's investments club manual
Ojijo's investments club manual
Ojijo's investments club manual
Ojijo's investments club manual
Ojijo's investments club manual
Ojijo's investments club manual
Ojijo's investments club manual
Ojijo's investments club manual
Ojijo's investments club manual
Ojijo's investments club manual
Ojijo's investments club manual
Ojijo's investments club manual
Ojijo's investments club manual
Ojijo's investments club manual
Ojijo's investments club manual
Ojijo's investments club manual
Ojijo's investments club manual
Ojijo's investments club manual
Ojijo's investments club manual
Ojijo's investments club manual
Ojijo's investments club manual
Ojijo's investments club manual
Ojijo's investments club manual
Ojijo's investments club manual
Ojijo's investments club manual
Ojijo's investments club manual
Ojijo's investments club manual
Ojijo's investments club manual
Ojijo's investments club manual
Ojijo's investments club manual
Ojijo's investments club manual
Ojijo's investments club manual
Ojijo's investments club manual
Ojijo's investments club manual
Ojijo's investments club manual
Ojijo's investments club manual
Ojijo's investments club manual
Ojijo's investments club manual
Ojijo's investments club manual
Ojijo's investments club manual
Ojijo's investments club manual
Ojijo's investments club manual
Ojijo's investments club manual
Ojijo's investments club manual
Ojijo's investments club manual
Ojijo's investments club manual
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Ojijo's investments club manual

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Ojijo, the author, is a financial literacy & personal development speaker; performance poet; lawyer; researcher; trainer; social entrepreneur; network marketer; spiritualist, (Practicing Open Religion); and author diversely published in religion, poetry, law, history, politics, languages, financial literacy and financial investments, and personal development!

Published in: Economy & Finance, Business
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Ojijo's investments club manual

  1. 1. Ojijo’s Investments Club ManualOjijo Is it not time I got my money working for me?
  2. 2. Ojijo’s Investment Clubs Manual! 139 PageDedicated to the Ojijo Family , and to the families and friends who wish to find financial freedom through investing together!
  3. 3. Book Title: Ojijo’s Investment Clubs Manual Ojijo’s Investment Clubs Manual! Copyright © 2010, Ojijo. All rights reserved. This work is copyrighted by the author. No parts 139 of this publication maybe reproduced, stored in a retrieval system, or transmitted in any form, without permission of the publisher. Page FIRST EDITION, 2010 For enquiries or orders, Email ojijop@gmail.com or Call (256) 701 100 059 BOOK TITLES BY OJIJO Ojijo’s Personal Development Books How to Identify & Develop My Talent, My Profession & My Career The Gift of E11even Moves to Make Me Wealthy Open Religion: My Religion is the Best Religion! Seventy-7 Moves of a Sexy Woman 99 Ways to Make People Happy! Ojijo’s Financial Literacy & Investment BooksOjijo’s Guide to Alternative Investments (Property/Fixed Assets, Insurance, Forex, Private Equity, Collective Investment Schemes, Collectibles & Commodities) Making My Child Financially Intelligent: Money Lessons by Age Group (from 4-18 yrs) Ojijo’s Guide to Financial Instruments & Financial Investments Ojijo’s Guide to Entrepreneurship & Raising Capital Ojijo’s Investment Club Manual Ojijo’s Other BooksStupid & Unintelligent: The Inferior Mindset of Black Leaders to Whites and the Role of the New African President! The Luo Nation: History, Culture & Conversational Phrases of the Luo Peoples of Africa Tuongee Kiswahili Conversational Phrasebook (with Audio CDs & DVDs) Ojijo’s Guide Book To Travel & Experience the World! Fireplace Stories: Ojijo’s Performance Poems The Mungiki
  4. 4. Ojijo’s Investment Clubs Manual! 139 Page About Ojijo’s Investments Club ManualThis is an essential reference for all investment clubs - both new and established - toensure that they are run correctly and efficiently. A successful investment club needs torun smoothly with a great amount of reliability and confidence among its members.When all members of the club expect and meet the same requirements, everyone workstogether in a way that induces success and profitability. Ojijo’s Investment Clubs Manualis the investment clubs’ bible and tells me everything I need to know about joining,starting or running a successful investments club. The vast majority of investments clubsin East Africa region swear by this guide.
  5. 5. Ojijo’s Investment Clubs Manual! Contents! 139 PageWHAT IS AN INVESTMENT CLUB?................................................................................6 INVESTMENT CLUB IS AN ORGANIZED GROUP............................................................................................................6 INVESTMENT CLUB HAS THE SAME DREAM, VISION AND OBJECTIVES ................................................................................6 AN INVESTMENT CLUB IS A LEGAL ENTITY ..............................................................................................................9 INVESTMENT CLUB INVESTS, IT IS A BUSINESS, NOT WELFARE CLUB ..............................................................................11 TYPES OF INVESTMENT CLUBS ..........................................................................................................................46WHY AN INVESTMENT CLUB? ................................................................................50 NETWORKING .............................................................................................................................................50 LEARNING ..................................................................................................................................................52 EARNING ...................................................................................................................................................54HOW AN INVESTMENT CLUB WORKS/CLUB ADMINISTRATION......................58 NETWORKING/MEETING..................................................................................................................................58 LEARNING/EDUCATION....................................................................................................................................71 INVESTMENT/EARNING ...................................................................................................................................73JOINING AN INVESTMENT CLUB.................................................................................86 HOW IS IT ORGANIZED/ADMINISTRATION? ...........................................................................................................86 IS IT NETWORKING?......................................................................................................................................87 IS IT EARNING?............................................................................................................................................87STARTING AN INVESTMENTS CLUB (THE 7 STEPS)..............................................89 STEP 1: THINKING BIG (DEVELOPING THE IDEA TO FOUND THE CLUB) ............................................................................89 STEP 2: FINDING MEMBERS FOR MY INVESTMENT CLUB............................................................................................92 STEP 3: THE INAUGURAL CLUB MEETING (1ST MEETING) ......................................................................................93 STEP 4: INVESTMENT PRINCIPLES & CLUB ADMINISTRATION (2ND MEETING)....................................................................99 STEP 5: APPROVAL OF DOCUMENTS & BEGINNING OF RESEARCH (3RD MEETING)............................................................101 STEP 6: THE FIRST INVESTMENT/TRADE (4TH MEETING)........................................................................................101 STEP 7: JOINING AN INVESTMENT CLUB ASSOCIATION..............................................................................................102 ...........................................................................................................................................104SAMPLE INVESTMENT CLUB DOCUMENTS............................................................104 SAMPLE INVESTMENT CLUB PARTNERSHIP AGREEMENT.............................................................................................104 SAMPLE CLUB RULES & REGULATIONS...............................................................................................................112SAMPLE INVESTMENTS CLUBS STRATEGIC PLAN...............................................124 ...........................................................................................................................................................126FINANCIAL LITERACY & PERSONAL DEVELOPMENT BOOKS .........................133 MAIN READING TEXTS..................................................................................................................................133 ADDITIONAL READING TEXTS ..........................................................................................................................133
  6. 6. Ojijo’s Investment Clubs Manual!WHAT IS AN INVESTMENT CLUB? 139INVESTMENT CLUB IS AN ORGANIZED GROUP PagePeople are becoming keener about taking advantage of available opportunities to pool money for investment. Groups are emerging as a good vehicle to collectively achieve investment goals and create discipline to save and invest in ventures that an individual cannot manage. The members do not need to have any prior knowledge. Groups offer the structure and support that many people need to get started investing, and groups make it possible to get into the market without a big initial investment. The fact that a group can accumulate large investment amounts from small individual investments also helps reduce the exposure to risk for individual investors. Groups formed for investment purposes are called investment clubs.An investment club is an organized group of individuals, usually comprised of friends, coworkers, church members, neighbors or family members, who meet on a regular basis to network, learn and pool their spare cash and invest in the stock market and/or other investment opportunities.When I am part of an investment club, each club member contributes a certain amount of money regularly, mostly each month, which is deposited on a joint investment bank account. Then, using the account, the members of the club agree on where to invest our savings: purchase of land with intention to sell at a profit, shares, rental property, businesses etc.INVESTMENT CLUB HAS THE SAME DREAM, VISION AND OBJECTIVES ¥ The Dream, Vision & Mission • One DreamAn investment club must have a dream, and the members must share in this dream. Sameness of dream creates harmony in club operations. The Bible beautifully captures the importance of harmony in the team thus; ‘can two walk together unless they agree?’Our dream is the ultimate goal of our coming together, the where we are going, and the destination we seek. It will be the basic building block of our success in investing. Our dream is that which we want so badly, that we are willing to pay any price to achieve it. It is that which lingers in our mind 24 hours a day. It is something we think about every moment. Zadok Rabinowitz correctly said that ‘A mans dreams are an index to his greatness.’ Konrad Adenauer was correct when he said that, ‘We all live under the same sky, but we do not have the same horizon.’ Muhammad Ali, the boxing legend, and three-time World Heavyweight Champion, confessed that ‘Champions are not made in gyms. Champions are made from something they have deep inside them; a desire, a dream.’ Before we start an
  7. 7. Ojijo’s Investment Clubs Manual! investment club, we must find our dream and stand by it. ‘A man who stands for nothing will fall for anything.’ said Malcolm X, the African-American Muslim 139 minister, public speaker, and human rights activist. Carl Sandburg, the American writer and editor, best known for his poetry, said that ‘Nothing happens unless first Page a dream.’Our dream is the compelling reason why we will wake up and read about investments, carry out research and responsibilities in the investment club, and come for meetings early enough and consistently. It is the reason why we wake up early, go to meetings, and save for investments. Our dream is more important than what we do, or how we do it. Thomas Edison dreamed of a lamp that could be operated by electricity, began where he stood to put his dream into action and despite a thousand failures, he stood by that dream until he made it a physical reality. The power of a dream! Thoreau phrased it well; ‘dreams are the touchstone of our character’. Angelo D’Amico was in agreement when he wrote that, ‘if the dream is big enough, the facts do not count.’ The dream of every investment club member is financial freedom; financial independence. • One VisionOur vision is the picture of our dreams realized. Our dream is based on our vision. Helen Keller, the blind, deaf and dumb motivational speaker and teacher who was the first such disabled person to earn a bachelors degree was once asked, ‘what would be worse than being born blind’, and she responded, ‘to have sight but no vision’. The vision is the key that will keep us focused. Hubert H. Humphrey said, ‘What you see is what you can be.’ Indeed, half the battle in life of getting what we want is worn when we know what it is that we want; the other half is worn when we do what we must do to get it. Napoleon Hill advises us thus, ‘Cherish your visions and dreams, as they are the blue print to your achievement.’ The vision of an investment club is a state of financial independence. • One MissionThe mission of an investment club is to provide a program of sound investment information, networking, education and support that helps create successful lifetime investors and financially free individuals. By becoming confident and knowledgeable investors, the members are empowered to build better financial futures for themselves and their families. A mission statement for an investment club is a simple way for club members to stay focused and aware of the goals that they have set out for their investment club. The mission statement will outline clearly how the investment club is going to be organized and how it will or is going to reach the goals. The mission statement should be written down by each member of the investment club, and any future members should have a copy of the mission statement. The mission of the investment club is to make each member financially independent.
  8. 8. Ojijo’s Investment Clubs Manual! ¥ The Goals & Objectives 139 • One ObjectiveThe main objective of the investment club is to pool money to invest in another Page venture to make more money. Investment clubs are a collection of like-minded people who share a common objective, making smart investment decisions for mutual economic benefit of members. It is very important to have common objectives in order to measure achievement and create a healthy team atmosphere. Everything is shared-from research to investment choices to successes and failures. The investment club will take my money and use it to make more money for me. As club members, we agree on financial strategy and mutual financial objectives that are strictly adhered to. This makes it easier to select opportunities that are right for the club. The club hence serves to pique the interest of members with regard to investments, the world of finance, and the current events in the world around them. The club also emphasizes cross-disciplinary skills such as research, report writing, leadership skills development and public speaking. In addition, club involvement also leads to an increasing financial awareness related to common sense saving, budgeting; long-range planning, social networking and goal setting that will benefit the club members in the future. • The Three Goals of an Investment ClubMost Clubs have three stated goals: First, to learn about investing generally, but with specific reference to financial instruments, chief amongst them being stocks; Second, to give the members a real-life experience in trading stocks and other investments and hence make a return on their investments and become rich; and Third, to provide opportunities to network with fellow investors, industry leaders and successful investors. If the club has a definitive game plan and the members on board all share the same goal then it has a much better chance of success. All members of the club should have the same philosophy about investing.If some members of the group are only interested in making a profit, instead of learning more about investing and the details involved, there will be a divided set of goals. Each member of the investment club needs to have the same goal in mind and the same methods of achieving that goal. Members of the investment club should be clear on what the long term goals of the club are all about. It is through constant focusing on the above three goals that the club will attract them and be successful. When these goals are clear, then they will drive, push, and pull the club, even when the weather is sickly, even when the papers are negative, even when the ‘friends’ are laughing at members, even when there is no feeling of moving on.Then the club should create benchmarks or milestones that members can use to measure the progress and know whether the club is on track. The club’s success will be the result of actions taken every day. The club needs to meet deadlines
  9. 9. Ojijo’s Investment Clubs Manual! and goals. Members should keep in mind that the ultimate aim of an investment club is to provide more enjoyment in their life rather than taking away what is 139 already there. This is supposed to be an exciting venture so members must make sure that they enjoy every second of it. If it simply becomes yet another source of Page stress, then it ultimately is not something worth holding onto. In achieving the goals, the club should apply the Pareto Principle, to give 80% of the club’s energy, time, skills and money to the 20% of the most important tasks, the priorities. The club should set goals that exploit the strengths and minimize the weaknesses of the members. This will allow the club to realize and make full use of its opportunities, and control the threats of failure. There should be an equal amount of growth and stability that is agreed upon.AN INVESTMENT CLUB IS A LEGAL ENTITY ¥ Why the Legal Entity?An Investment Club ought to be a legal entity. A legal entity is an organization that the law treats as if it were a person, capable of entering into contracts and of being sued and in includes, but is not limited to, an individual (adult and sane), partnership, association, company, corporation and trust.Unlike independent individuals investing directly into the stock market, an investment club pools money from each member, and hence the need for clarity of rights and duties of the members. The legal entity enables the investment clubs to have rules and a constitution to ensure smooth running and for the protection of its members by defining rights and duties of each member. Further, once it is legally established, standardized accounting records can be easily kept for it. Additionally, the legal entity also provides the investment club with a solid structure to ensure the clubs agenda is carried out efficiently and without friction. ¥ Types of Legal Entity: Partnership, Corporations, Cooperatives or AssociationAn investment club can be registered as a corporation, cooperative, partnership or association.A company/corporation is a form of business organization/association that is separate and distinct from its owners. Corporations have the right to enter into contracts, loan and borrow money, sue and be sued, hire employees, own assets and pay taxes. The most important aspect of a corporation is limited liability, that is, the shareholders are not held personally liable for the companys debts. A corporation is created (incorporated) by a group of shareholders who have ownership of the corporation, represented by their holding of common stock. Shareholders elect a board of directors (generally receiving one vote per share)
  10. 10. Ojijo’s Investment Clubs Manual! who appoint and oversee management of the corporation. While an investment club could incorporate, the double tax treatment on corporate distributions makes 139 the corporate structure less desirable than a partnership. PageA partnership is a business organization in which two or more individuals manage and operate the business. Partners (owners) share amongst each other the profits or losses of the business in proportion to their shares. Typically, a general partnership does not generate any tax liability on its own; instead, any tax liability is passed through to members each year. An investment club can register as a partnership and then when the portfolio has evolved over the years (and is no longer limited to stocks and shares but has expanded to include other investment opportunities to incorporate the skills and interests of all members), the club can register a limited company arm for the purpose of pursuing business ventures and alternative investments outside the stock market.Further, an investment club can be registered as a cooperative. This is especially relevant when the members are more than 20, in which case we cannot register as a partnership. Further, it works where we are more than fifty members, in which case we cannot register as private limited company anymore.An investment club could also be registered as an association with the institution where the members are enrolled, for instance, at a university. An association is any group of people who have joined together for a particular purpose, ranging from social to business, and usually meant to be a continuing organization. It can be formal, with rules and/or by-laws, membership requirements and other trappings of an organization, or it can be a collection of people without structure. An association is not a legally-established corporation or a partnership.
  11. 11. Ojijo’s Investment Clubs Manual!INVESTMENT CLUB INVESTS, IT IS A BUSINESS, NOT WELFARE CLUB 139Investment clubs are formed by people in the business of investment. "The Social Page Responsibility of Business is to Increase its Profits" so said Milton Friedman, the great economist. He repeated that, ‘The business of business is business.’ The purpose of clubs is to make money, not welfare. An investment club is a business. It is not just a hobby but an actual business venture where I will be working together with other people on investing our money. An Investment club is formed by people in the business of investment; people who want to make money. The clubs provide venues for training and education of members in the ways of the business world. Club members help each other out, and so they enjoy more security in their investments.Some investments that members engage in include purchase of land with intention to sell at a profit, shares, rental property, businesses etc. Investment clubs are run in a democratic fashion. Members, as a collective, elect their officers. They also vote on stocks, bonds or securities that they want to purchase, how many they want to buy, whether or not they want to sell, whether or not the interest rate is conducive to a comfortable amount of growth. There should be an understanding established of what amount of the profits that are realized from investments are going to be held and which amount is going to be reinvested immediately back into the stock market. Investment clubs are dedicated for those who are looking for a secondary income or for those, who want to get FINANCIAL FREEDOM and FINANCIAL INDEPENDENCE. ¥ What Is Investing?To invest is to purchase an asset (something that has value that will produce income or appreciate in value and when liquidated, will realize more than was spent in acquiring it).Investing is the commitment of money or capital to purchase assets in order to gain profitable returns in form of interest, income, or appreciation of the value of the instrument. To invest is related to saving or deferring consumption, BUT with the aim of that money so saved and not consumed being used to bring more money. Robert Kiyosaki taught that, ‘to invest is to mind my own business.’ • Investing Is Not GamblingInvesting is not gambling. Gambling is putting money at risk by betting on an uncertain outcome with the hope that I might win money. True investing does not happen without some action on my part. A "real" investor does not simply throw his or her money at any random investment; to be a real investor I must perform thorough analysis and commit capital only when there is a reasonable expectation of profit. Yes, there still is risk, and there are no guarantees, but
  12. 12. Ojijo’s Investment Clubs Manual! investing is more than simply hoping Lady Luck is on my side. Investing is not a get-rich-quick scheme. 139 ¥ Two Types of Investors & Investing PageThere are two broad types of investing and investors: There are two basic types and broadest forms of investing. Investors can be loaners or owners. It is either an equity investment or a debt investment. € Loaners invest in debt instruments. A debt investment is where I loan my money to someone else for an amount called interest. These may take the form of a bank savings account, a certificate of deposit, Treasury notes or corporate bonds among others. A debt investment is unique in that the borrower is obligated to the debtor to pay the money back. Debt investments give me a lower return than equity investments. € Owners invest in equity instruments. An equity investment is where I loan my money to someone else for a share of the profits he receives from the way he uses the money. These investments involve ownership of all or part of tangible or intangible assets such as real estate, intellectual property or stock in a company. An equity investment differs from a debt investment in that there is no obligation on the part of the debtor to pay me back. Debt investments are also lower in terms of risk than similar equity investments. ¥ Investment VehiclesThere are many different ways I can go about making an investment. There are a wide variety of different types of investment products and new ones are emerging all the time. These options are referred to as "investment vehicles," or “investment products”, which is just another way of saying "a way to invest." Each of these investments is something I purchase or place my money into in return for the interest that is generated over time and paid back to me. These vehicles are grouped according to the type of asset invested in. There are nine general categories of such investment vehicles, based on nine categories of assets as classified by Ojijo in his all time classic, The Gift of E11even Moves to Make Me Wealthy!These nine areas are referred to as The Ojijo 9; and they are divided into three broad categories, namely, Personal Development/Self-Help; Traditional Assets; and Alternative Assets: 1. Personal Development/Self-Help, which is the greatest form of investment, involves engaging in activities which enable me to identify & develop my
  13. 13. Ojijo’s Investment Clubs Manual! talents and skills; realize my potential; and achieve my dreams & aspirations so as to enhance the quality of my life and contribute to the community. Two 139 guides to personal development are Ojijo’s The Gift of E11even Moves to Make Me Wealthy, which teaches me the eleven areas that I need to develop to enjoy Page the complete and wealthy lifestyle, which are health, relationships, riches/money, career, adventure, happiness, dreams & goals, positive attitude, controlling the day, helping people and being peaceful); and Ojijo’s Guide to Identify & Develop My Talent, My Profession & My Career.The traditional assets/investment products include, 1. Financial Instruments, also called securities, are a real (hard copy) or virtual (electronic) documents representing a legal agreement/contract involving a monetary value. They include those which indicate that someone owes me money (Debt Instruments/Bonds), or that I own part of some business process (Equity Instruments/Shares), or cash investment, whose values are determined directly by the market (Bank Deposits/Bank Accounts) or those that which are linked to a specific asset or indicator/variable and are used to trade financial risks (Financial Derivatives- options, futures, forwards and swaps). A practical book to read for further knowledge in investing in financial assets is Ojijo’s Guide to Financial Instruments & Financial Investment. Alternative Assets, which are assets other than traditional investments (stocks, bonds or cash). A practical book to read for further knowledge in fixed asset investing is Ojijo’s Guide to Alternative Investments (Property/Fixed Assets, Insurance, Forex, Private Equity, Collective Investment Schemes, Collectibles & Commodities). Alternative assets include; 1. Collective Investment Scheme (CIS), is a pool of money from various investors for investing in various assets. It can be a professional scheme, managed by handled by an individual, fund manager, group, bank, or company, called investment company, and such professionally managed schemes can be closed- ended (limited number of shares issued once), open ended /mutual funds (open for new investors to buy shares). A practical book for identifying and investing in investment companies is Ojijo’s Guide to Alternative Investments (Property/ Fixed Assets, Insurance, Forex, Private Equity, Collective Investment Schemes, Collectibles & Commodities). Collective Investment Schemes can also be self-managed by the members pooling the resources together, called investment clubs, which allow members to also learn and network. A practical book to read for further knowledge in forming, joining and running an investment club is Ojijo’s Investments Clubs Manual. 2. Property/Fixed Assets, which includes long-term tangible/physical assets (such as machinery, land, buildings, equipments, vehicles), or intangible/technological asset, which is a tool, technique, craft, system or method of organization in
  14. 14. Ojijo’s Investment Clubs Manual! order to solve a problem or serve some purpose. Technology Assets can also be in software or computer application form, in which case they are called 139 Information Technology/IT Assets (commonly referred to as software). Collectibles, which are objects regarded as being of value or interest, either Page 3. because they are old/antiques, or they are specially manufactured to be collectibles, including art, antiques, coins and stamps; 4. Commodities, which are naturally occurring/raw/primary products, and include agricultural products, also called soft commodities (soya, grains, vegetables, etc); energy products (oil, gas, electricity and green energy); base metals (copper, aluminum, iron, etc); and precious minerals (gold, silver, diamond, uranium, palladium and platinum. 5. Private Equity, which involves injecting working capital to start-up or operating private companies and owning equity/shares for a period until returns are collected and is done by venture capital firms, private equity funds or angel investors through leveraged buyouts, venture capital, growth capital, distressed investments and/or mezzanine capital; 6. Insurance Assets, which are insurance products that have both a protection as well as an investment component such as endowment plans, pension plans and investment bonds; and 7. Forex Investments, involves is trading currencies from different countries against each other. The foreign exchange market, which is usually known as "forex" or "FX," is the largest financial market in the world.It does not matter which method I choose for investing my money, the goal is always to put my money to work so it earns me an additional profit. Even though this is a simple idea; it is the most important concept for me to understand. ¥ Why Bother Investing? • • Investing Makes Me RichPeople invest because they want to increase their personal freedom, sense of security and ability to afford the things they want in life. Investing allows my child to take the money he has saved, and grow it, by creating his own financial portfolio. Investing is about making his money work for him.When people invest, they spare money to offset the effect of inflation on idle cash as well as to benefit from an additional source of income and capital appreciation. Everybody wants more money. Investing allows him to take the money he has saved, and grow it, by creating his own financial portfolio. The only way to be rich is to invest and have assets. King Solomon knew it several millennia ago when he wrote, ‘the rich man’s strength is in his city’. The rich man’s city is his assets. An asset is any item, of value, usually purchased, or equivalently a deposit is made in a bank, in hopes of getting a future return or interest from it. An asset is expected to give returns without any work on the asset. The rich do not work
  15. 15. Ojijo’s Investment Clubs Manual! for money. The rich work to build assets that will make money work for them. Riches protect the rich from pestilence of poverty. All rich people have assets. 139 Whether they inherited it, married into it, won it, borrowed it, created it, or (God forbid) stole it, they all have assets. Assets leverage time and effort, so that money Page comes passively, even when the investor is not working. • Investing Makes My Money Work For Me!To become rich and financially secure, I need to mind my own business; I need to invest. I need to have my own business. Without my own business, I have no financial foundation. And without financial foundation, I will be poor, broke and miserable. Investing is the science of money making money. As Benjamin Franklin rightly noted, "Money makes Money, and the Money that Money makes, makes more Money."Investing is about making my money work for me. Investing means putting my money to work for me. Essentially, it is a different way to think about how to make money. Growing up, most of us were taught that we can earn an income only by getting a job and working. And that is exactly what most of us do; but there is one big problem with this: if we want more money, we have to work more hours using more effort. However, there is a limit to how many hours a day we can work, not to mention the fact that having a bunch of money is no fun if we do not have the leisure time to enjoy it. • Investing Leverages Time and EffortSince I cannot create a duplicate of myself to increase my working time and effort; I need to send an extension of myself - my money (and hence time and effort) - to work for me. This is called investing, ‘putting my money to work for me’. ’That way, while he is putting in hours for my employer, or even mowing my lawn, sleeping, reading the paper or socializing with friends, he is becoming rich because my money is making more money for me elsewhere. Quite simply, making my money work for me maximizes my earning potential whether or not I receive a raise, decide to work overtime or look for a higher-paying job. This leverages my time and effort, giving me more hours and effort I would have had alone. • Taking Control of My FinancesTaking control of my personal finances will take work, and, yes, there will be a learning curve. But the rewards will far outweigh the required effort. Contrary to popular belief, I do not have to allow banks, bosses or investment professionals to push my money in directions that I do not understand. After all, no one is in a better position than I am to know what is best for me and my money.
  16. 16. Ojijo’s Investment Clubs Manual!Investing is one of the major missing pieces in many financial education programs. I am taught about saving but not about investing in assets that will produce 139 passive income for me. Saving to purchase an item he really wants is not as difficult as it may seem at first if I use a system, and it feels great when I do reach Page my savings goals. I will always have money for continued education. I am less likely to develop the habit of feeling guilty for spending my own money; an emotion many adults suffer from. ¥ The Ojijo 9 (The Nine Fundamental Principles of Investing)Investing is guided by certain core principles which when followed, will lead to successful investing and becoming rich and financially independent. The principles, herein referred to as The Ojijo 9, or The Nine Fundamental Principles of Investing, are as below: • Principle 1: Dreaming, Thinking Big & Goal Setting!To invest is to make my money make money for me. Before I start investing, I must be clear of how much money I want to invest, and how much money I want to get in return. I must know exactly how much I want. It is through constant focusing on what I want in this life that I will attract it. It must be crystal clear in my mind; what it is I seek. Then it will drive me, push me, and pull me, even when the weather is sickly, even when the papers are negative, even when the ‘friends’ are laughing at me, even when I do not have the feeling of moving on. After all, the good life I am seeking is right here. Whatever I am seeking is seeking me. I create my own reality. This is my dream; the dream. Napoleon Hill, the American author and one of the earliest producers of the modern genre of personal-success literature, in his famous work, Think and Grow Rich, advises us to constantly keep in our minds that, ‘The starting point of all achievement is desire. Weak desires bring weak results, just as a small amount of fire makes a small amount of heat.’ My dream must be big, a big dream. And I must hold on to it. As Benjamin Franklin said, ‘I will not be like other men, who die at age 25, because they stop dreaming.’ Why should I not dream? I am encouraged by George Bernard Shaw when he wrote, ‘You see things that are; and you ask ‘Why?’ But I dream things that never were; and I ask ‘Why not?’Life in itself knows no limits or boundaries. Life is infinite and free and contains within itself all possibilities. Life is meant to be abundant in all spheres. The concept of life as limitation represents ignorance of self and fear, and it is this fear that is the cause of all dis-ease in my life. ‘Life is phenomenal, a magnificent trip’, Dr. Norman Peale says. Life is free and so am I. This is my life I am writing down. I am the Michelangelo of my life, I sculptor my image, the image I want of myself. I will paint my own reality, I will choose the colour of the eye shades I want to wear, and I will see this life as I want.
  17. 17. Ojijo’s Investment Clubs Manual! • What Is My Dream? 139My dream is the vision, the ultimate goal of my life, the where I am going, and the destination I seek. It is the basic building block of my success. Helen Keller, the Page blind, deaf and dumb motivational speaker and teacher was once asked, ‘what would be worse than being born blind’, and she responded, ‘to have sight but no vision’. The vision is the key that will keep me focused. Hubert H. Humphrey said, ‘What you see is what you can be.’ Indeed, half the battle in life of getting what I want is worn when I know what it is I want; the other half is worn when I do what I must do to get it.My dream is what I want so badly, that I am willing to pay any price to achieve it. It is that which lingers in my mind 24 hours a day. It is something I think about every moment. Zadok Rabinowitz correctly said that ‘A mans dreams are an index to his greatness.’ Konrad Adenauer was correct when he said that, ‘We all live under the same sky, but we do not have the same horizon.’ Muhammad Ali, the boxing legend, and three-time World Heavyweight Champion, confessed that, ‘Champions are not made in gyms. Champions are made from something they have deep inside them a desire, a vision, a dream.’ Today, I must find my dream and stand by it. ‘A man who stands for nothing will fall for anything.’ said Malcolm X, the African- American Muslim minister, public speaker, and human rights activist.My dream is the compelling reason why I do what I do every day. It is the reason why I wake up early, go to school or go to work every day. Why I do something is more important than what I do, or how I do it. Thomas Edison dreamed of a lamp that could be operated by electricity, began where he stood to put his dream into action and despite a thousand failures, he stood by that dream until he made it a physical reality. The power of a dream! Thoreau phrased it well; ‘dreams are the touchstone of our character’. Angelo D’Amico was in agreement when he wrote that, ‘if the dream is big enough, the facts do not count.’ Napoleon Hill advises us thus, ‘Cherish your visions and dreams, as they are the blue print to your achievement.’ My dream! Carl Sandburg, the American writer and editor, best known for his poetry, said that ‘Nothing happens unless first a dream.’My dream gives meaning to my actions; it explains my activities the whole day. My dream is the painting of what I want my life to be like in all segments, whether it is in my relationships, my money, my career, my business, my talents or my spirituality. Henry David Thoreau said that ‘…if one advances confidently in the direction of his dreams, and endeavors to live the life he has imagined, he will meet with success unexpected in common hours…’ I have got to have a dream I am willing to work hard for, and fight for.When I know what I want, and how badly I want it, then I will focus on it, work towards it, and subsequently achieve it. I will never have anything until I discover what it is I want. My dream will make me passionate and positive about
  18. 18. Ojijo’s Investment Clubs Manual! my goals and to do’s, and this will rub onto other people around me as they see the energy in me. Indeed, if I will move confidently in the direction of my 139 dreams, and endeavor to live the life that I dream, I will meet with the life that I imagine in common alleys. Page • The Potential To Achieve My Dream Lies In My Thought!My dream is a result of my thoughts. It is a creation of my thoughts. The Buddha said that, ‘we are what we think. All that we are arises with our thoughts. With our thoughts, we make the world’. Thoughts become things, as all that I see today, were at one time imaginations in people’s minds, imaginations which became realities. W. Clement Stone, the businessman, philanthropist and self-help book author said that ‘whatever the mind of man can conceive, it can achieve’. Our realities are a product of our thoughts.What I am today is a result of what I thought and imagined yesterday. ‘Man, alone, has the power to transform his thoughts into physical reality; man, alone, can dream and make his dreams come true’, said Napoleon Hill. Indeed, ‘an invasion of armies can be resisted, but not an idea whose time has come’, so said Victor-Marie Hugo, the French poet, playwright, novelist, essayist, visual artist, statesman and human rights activist. The strength of an idea is also reflected in the fear it had in the minds of past dictators. ‘Ideas are more powerful than guns. We would not let our enemies have guns, why should we let them have ideas.’ said Joseph Stalin, the first General Secretary of the Communist Party of the Soviet Unions Central Committee and leader of the Soviet Union after Lenin. It is in my mind, through my ideas, that the solutions to my problems shall be found. Bantu Steve Biko, the martyr and symbol of black resistance to the oppressive Apartheid regime and the founder of the Black Consciousness Movement in South Africa, noted that, ‘The most potent weapon in the hands of the oppressor is the mind of the oppressed.’ All I need is just one idea. One idea!Jakob Böhme, the German Christian mystic and theologian correctly stated that, ‘our body is the product of our own thoughts’. To gain insight and understanding of self, I have to realize and acknowledge that both negative and positive forces co-exist within me. That which I call good or evil is nothing more than a product of my own imagination. My life will unfold and evolve through thought or consciousness. The creative thinker dwells within me, forever revealing itself to me in manifested form. Henry Ford, the American founder of the Ford Motor Company and father of modern assembly lines used in mass production was right, ‘Whether I think I can or I cannot, either way I am right.’ Bryan Tracy said that ‘All successful men and women are big dreamers. They imagine what their future could be, ideal in every respect, and then they work every day toward their distant vision, that goal.’
  19. 19. Ojijo’s Investment Clubs Manual!Today, I will become a no-limit person! I believe in Mark Twain, ‘it matters not the size of the dog in the fight, its the size of the fight in the dog’. I can change my life by 139 changing the way I think about my potential. Robert Nesta ‘Bob’ Marley, the Jamaican reggae singer-songwriter and musician, who spearheaded the Page Rastafarian movement to the worldwide audience, asked that we, ‘Emancipate ourselves from mental slavery. None but ourselves can free our minds.’ Bruce Lee, the great karate teacher, actor and legend, once remembered a lesson given to him by his master thus; ‘if you learn to adapt, you will never lose a fight’. Charles Darwin wrote that, ‘It’s not the strongest of the species that will survive, or the most intelligent, but the ones most responsive to change.’ And Mohandas Gandhi agreed with him that, ‘a man is but the product of his thoughts; what he thinks, he becomes.’Today, I will open new doors to unlimited possibilities and put myself on the road to a better, more fulfilling professional and personal life by thinking positive thoughts. Napoleon Hill rightly noted that, ‘more gold has been mined from the thoughts of men than has ever been taken from the earth.’ • I Will Visualize My Dream Lifestyle!‘Without a vision, a people perish’ the Bible reminds us. Today, I will visualize the dream lifestyle I want. I will close my eyes, relax, smile, and calmly visualize myself having achieved the dream of my life. I will see my goal as though it were already a reality. Dr. Norman Peale said, ‘When you visualize, you materialize’. For a minute, several minutes, I will see myself with my dream, and then the whole day today, I will talk, walk, sit and act as if I have achieved my dream. The more I do this, the more my mind gets tuned to this lifestyle, the more I develop a positive attitude, positive thoughts and positive emotions. This state of positive and vibrant and happy moods will make it easier for me to get what it is I want; to acquire what it is I need. W. Clement Stone can be quoted yet again, ‘whatever the mind of man can conceive and believe, it can achieve’. • I Will Believe In My Dream!John Stuart Mill, the great jurist and philosopher said that ‘one person with belief is equal in force to ninety-nine who only have interest’. He was right! And so was Fidel Castro, leader of the Cuban Revolution and the President of the Council of State of Cuba when he said that, ‘I began revolution with 82 men. If I had to do it again, I’d do it with 10 or 15 with absolute faith. It does not matter how small you are if you have faith and plan of action.’ Today I will believe in my dream and my goals. I will set my goals and then have faith that I am going to achieve my dream. I must believe I will achieve it, after all, I am meant to live a great and happy life; we all are meant to live great and happy lives. I will believe I can have the dream lifestyle I want, I will believe that I deserve it, and I will believe that it is possible to live a good life. Warren Buffet once said that, ‘I always knew I was going to be rich. I dont think I ever doubted it for a minute.’
  20. 20. Ojijo’s Investment Clubs Manual!To believe my dream, I will set realistic, believable goals. Goals I can believe in. My dream is only my dream if I believe I am going to achieve it, otherwise, it is just a 139 wish. Eleanor Roosevelt noted this and wrote, ‘the future belongs to those who believe in the beauty of their dreams’. I will believe that I can achieve it, and I will Page believe that I deserve it.Today, I will believe that no one, not even me, knows what will happen in the next minute, no one knows whether I will be successful or not in the next venture, in my business, in my relationships, so, I will be positive and think I am going to succeed. After all, if I do not know the outcome, why suppose it will be negative? Napoleon Hill taught that, ‘no one is ready for anything until he believes he can acquire it’. The state of mind must be belief, not merely wish or hope. Belief is a powerful and important tool to achieving my dream. Adolf Hitler said that, ‘It is always more difficult to fight against faith than against knowledge.’ • I Will Write My Dream!To achieve any of my dreams, I must do the first act. The first step is to write down my dream, where I want to go. If I do not know where I am going, then any road will get me there. Writing makes things come to life. I will write the values that I need to reach my goal, the new thing that will make me achieve my goals, for instance, to be the kindest person today; to be the most time efficient person today; to be the most reliable worker today; to be the most honest person today.I will write a clear, concise statement of what it is I intend to acquire in life, the time limit for its acquisition and what I intend to give in return for it. I will list everything I need to do to achieve what I want, and then I will take action every day. This is my plan, and it will help me to acquire what it is I want. Then I will read my plan every day, aloud, when I wake up, and when I go to sleep. • I Will Define My Goals!A goal is a target I want to achieve. It is the ‘what I want to do or be’. My goal is the place I want to go to; the life I want to live; the career I want to practice; the money I want to earn; the health I want to have; and the adventure I want to experience. ‘It is not enough to do your best; you must KNOW what to do, and then do your best.’ said W. Edwards Deming, American statistician, professor, author, lecturer, and consultant. Today, I will define and describe my goals.Goals give results; and results are the main reason for any activity. I will decide what I want in my life, my dream. I will identify what I want in all aspects of my life, in my relationships, my financial status, my career, my health, my happiness and adventure, in helping someone and the ability to control the day. I will write down when I want to achieve it, and how I want to achieve it. Then I will write down the reason why I want it. I will then write down what it would feel like
  21. 21. Ojijo’s Investment Clubs Manual! when I have achieved it. And after describing my dream and defining my goal, I will figure out exactly what it will take to get it. I need to be realistic so that I can 139 believe it. I will break my big plan, my big picture, my painting, into 5 year goals, 3 year goals, 2 year goals, 1 year goals, 9 month goals, 6 month goals, 3 month Page goals, one month goals, weekly goals and into daily activities for every seven days. ‘Goals allow you to control the direction of change in your favor.’ Brian Tracy said.William H. Hunsen, the eloquent poet advised that, ‘he who seeks one thing, and but none, may hope to achieve it before his life is done, but he who seeks all things must reap a barren harvest of regret’. I do not want to reap regret today.The progressive achievement of my goals, when I am working gradually, step-by- step toward something that is important to me, will generate within me a continuous feeling of success and achievement. Indeed, success is the progressive realization of predetermined goals. I will feel like a winner, and I will soon develop the psychological momentum that enables me to overcome obstacles and plough through adversity as I move toward achieving the goals that are most important to me. I will feel more positive and motivated. I will feel more in control of my own life. I will feel happier and more fulfilled. It is proven that 95% of achieving anything in life is knowing what it is that I want. ‘People with clear, written goals, accomplish far more in a shorter period of time than people without them could ever imagine.’ Brian Tracy wrote.I There are so many financial goals, and it is important to classify them in priority. The goals could be for emergency fund, or savings to buy a house, or car, or to send children to college. Either way, I should have them very clearly stated. And I should make all my financial goals S.M.A.R.T ¥ Specific-knowing exactly what I want, i.e., $1 million investment portfolio ¥ Measurable - ability to track progress ¥ Actionable- knowing the steps needed to achieve the goal, i.e., by saving and investing my money ¥ Realistic- being in the realm of possibility, i.e., $1 million is within my saving and investing abilities ¥ Timely- knowing when the goal will be achieved, i.e., 2017 • I Will Work Towards My Goals!Angelo D’Amico wrote that, ‘I will accomplish my dream of tomorrow by acting today’. My success tomorrow will be the result of my actions today. Indeed, as I do what others don’t do today, so will I have what others won’t have tomorrow. An unknown philosopher rightly said, ‘I only become what I am becoming today.’ Indeed, my success is the sum of my past experiences. Without the foundation of my
  22. 22. Ojijo’s Investment Clubs Manual! yesterday, my today would be pillared on nothingness; hopeless. ‘We are what we repeatedly do. Excellence, then, is not an act, but a habit.’ said Aristotle. As was noted 139 by an anonymous writer, ‘there are two things which are most difficult to make people to do; to think and to do things in order of priority.’ PageToday, I need to meet my deadlines, my goals. I will keep in mind Parkinson’s Law, that ‘if I have only one letter to write, it will take a whole day; but if I have 20 letters to write, I will still get them done within one day.’ I can work towards and achieve my goals today. I can and I will.I will take my big dream, and break it down into smaller, more manageable goals. I will then write my goals in a time related way. Where do I want to be at the end of ten years from today? Where will I need to be in five years to be able to reach the ten year goal? What should I do by the third year, by year one, and by the half year, by the next 3 months, and what must I have done by the end of this month to reach my 10 year goal. What must I do by the end of this week, to make me reach my 10 year goal? What must I have done by the end of today to make me reach my goal?Today, in setting my daily activities, I should be reminded of the Wizard of the OZ, when Dorothy asked, ‘but how do I get to Emerald City?’ and the Good Witch of the North replied, ‘It is always best to begin at the beginning, and just follow the Yellow Brick Road.’ Dale Carnegie was right, ‘Most of the important things in the world have been accomplished by people who have kept on trying when there seemed to be no hope at all.’ The 13th century mystic must be quoted again, ‘you can only start the journey from where you are; and not where you are going’.I will set goals and posts, so that when I move closer to it, I know, and when I move away from it, I will also know. With this, nobody can stop me, nobody can slow me down, and nobody can wear me out. ‘The secret to success is constancy to my purpose’, Benjamin Disraeli, the British Prime Minister, parliamentarian, conservative statesman and literary figure wrote. And having set the major goals in my life, I will identify the first step in each. I will not forget the words of Lao- Tzu: ‘A journey of a thousand miles begins with a single step.’ Angelo D’Amico was right, ‘it you do not start, you will not finish’. I will make sure it is a very small step, perhaps taking no more than an hour to complete! Then I will start working towards my goals.I will ask myself, ‘What can I do today to get one step, however small, closer to achieving my goals?’ I will then take daily action towards my goals and dreams. Mike Murdock was right, ‘my future is hidden in what I do daily’. After all, ‘there is no such thing as something for nothing’, Napoleon Hill reminds us. The Egyptians were right, ‘There grows no wheat where there is no grain.’ I must make the first step to begin my journey of a thousand miles. Indeed, ‘a goal without an action plan is a day dream!’ writes Steve Chandler.
  23. 23. Ojijo’s Investment Clubs Manual!Today, in achieving my goals, I will apply the Pareto Principle, invented by the Italian Economist, W. Pareto (also called the 80/20 principle) restated by Richard 139 Coke in his classical book, ‘The 80/20 Principle-The Secret To Success By Achieving More With Less.’ I will give 80% of my energy, time, skills and money to the 20% Page of the most important tasks, my priorities. This will give me the greatest output. Today, it will not be about how hard I work, but how smart I work. I will apply the Universal Law of ‘Planned Neglect’; to deliberately neglect everything else and only do that which will make me progress towards my success. I after all, I cannot have it all. Life is like mountain climbing; I must leave behind all unnecessary weight and only carry the equipment necessary for the climb. The Pareto Principle is about prioritizing my goals. I will prioritize my goals today. To achieve my goals, I must learn to say NO to the GOOD in order to say YES to the BEST. Robert J. McKain wrote, ‘The reason most major goals are never achieved is that we spend our time on the second best things first.’To achieve my goals, I will do one thing at a time. The worlds greatest achievements were made by people who gave the task in front of them their undivided attention. I will ask myself, ‘Is giving each task 30% of my attention for three hours as effective as giving each task 100% of my attention for one hour each?’ If something does not deserve my undivided attention, maybe it is not worth doing at all. I will set goals that exploit my strengths and minimize my weaknesses. This will allow me to realize and make full use of my opportunities, and control the threats I face.Then I will create benchmarks or milestones that I can use to measure my progress and know whether I am on track, off-track or not moving at all: stagnating.Today, I will decide what to do and do it, and decide what not to do, and not do it. Taking action or conation towards our goals is considered to be one of the four divisions of the mind, according to Sir William Rowan Hamilton, the Irish physicist, astronomer, mathematician and the father of electromagnetism and quantum mechanics. The other one being desire and volition, and the other two being perception and feeling. This active mentality differs from velleity, the wish without the effort. The Taking Action part of the mind is the part of our mind that says, ‘I Will’. ‘I will’ is more important than intelligence. ‘I will’ is more a driving force than ‘I wish.’ ‘I will’ is a distinct aspect of the mind - the power of creative instinct or will – it is separate from thinking and feeling. I will quote Mohammed Ali, the king of boxing; ‘The Champions need the skill and the will. But the will must be stronger than the skill.’This active mentality, the ‘I Will’, was accepted as a given by thinkers such as Plato, Aristotle, Augustine, Spinoza, Hobbes, Descartes, Kant, Hume, Freud, and Piaget. It is the ‘executive’ brain. It is the source of all striving, longing, ambition, and self-expression. It is the root of a persons persistence against obstacles, the very essence of the person, for it is through conation that we strive toward goals
  24. 24. Ojijo’s Investment Clubs Manual! or self-actualize. Fidel Castro captured this essence when he wrote that, ‘If Mohammed cant go to the mountain, the mountain will go to Mohammed.’ And it is 139 through this active mentality that one is productive, for as Hume pointed out, ‘intellectual awareness alone cannot move us to do anything’. PageThe power of the human will was embraced by Joseph Vissarionovich Stalin, the Soviet politician, head of state and first General Secretary of the Communist Party of the Soviet Union, who launched a period of rapid industrialization, when he told his soldiers that, ‘I believe in one thing only, the power of human will.’ • I Will Get A Dream Team!Lyndon Baines Johnson, the 36th President of the United States, often referred to as LBJ, was quoted as saying, ‘There is no problem that we cannot solve together, and very few that we can solve alone by ourselves’. Team support is very important in achieving our dreams. TEAM means Together Each Achieves More. ‘When two people walk together, they can go a long while.’ The Luo of Kenya believe. And ‘When two people sleep together, they give each other warmth.’ The Bible says. The Swedes believe that ‘Shared joy is a double joy; shared sorrow is half a sorrow.’ This is true! I will get a dream team, a support team.This dream team will help me be in line, keep me in check and always ask after my progress. The dream team will be my boards-of-advisor who will help me gather intelligence required to help me reach my dream. This is the team that will ask me about my progress with my dream. They will ask me where I am, what I did today, whether or not I woke up early, and if or not I read about my books on career, role models, and industry leaders. They will help me reach where I want to go, encourage me, push me, pull me and tell me I will do it, because as my dream team, they believe in me. From time immemorial, the Turks have believed that, ‘no road is long with good company’. The dream team will fight for me when I am down and low. Ernesto Che Guevara, an Argentine Marxist revolutionary, physician, author, intellectual, guerrilla leader, diplomat, military theorist, and major figure of the Cuban Revolution captured the essence of the team when he wrote in his diaries that, ‘I dont care if I fall as long as someone else picks up my gun and keeps on shooting.’The team can be the models in my field, and from them I will learn how they did it, what they did and when they did it. From them I will know the books they read. The team may be my fiancée, my friends, my family, or my colleagues from high school or college, my colleagues at work or in my club. The team must be people with whom I share the same desire to prosper. The team will make sure I do not remain down when I fall.The dream team is premised on the ‘mastermind principle’; that ‘two minds are better than one’. This is soundly described in the classic Think and Grow Rich by
  25. 25. Ojijo’s Investment Clubs Manual! Napoleon Hill. A Luo proverb says, ‘Alone a youth runs fast, with an elder slow, but together they go far.’ 139It is possible for a group of two or more people to cooperate in such a way that the Page productivity of each enhances the productivity of the other. The Bible is right, ‘A rope of two cords is stronger than that of one cord’. In the team I will find security of thought and action. The Quran teaches that ‘there is safety in the multitude of advisors.’ A group can be capable of more output than any individual within the group; than me. This team will not be an easy crowd. Rather, it will be a group with high expectations for me and from whom there will be high demands to perform exceedingly well. The Bible beautifully captures the importance of harmony in the team thus; ‘can two walk together unless they agree?’My dream team will have a lawyer for all my legal needs, especially incorporating my investment vehicle; a financial investments adviser to advice on financial investment issues; a fixed assets broker for realty and other fixed assets; an accountant for my tax planning; and a sales and marketing expert to connect me to the world of clients and customers.My team must be people who mind their own businesses. All my professional advisers must be people who have excelled in their own lives, financially free people or people on their path to financial success. As the old adage goes, ‘a blind man cannot lead a blind man.’ I want advisers who are not only preaching wine, but also drinking it. I want advisers who are minding their own businesses. These professionals are my eyes and ears in the market place. They are there every day so I do not have to be there. After all, as Robert Kiyosaki says, ‘I would rather play golf.’Getting the right professionals will not be easy. The fairy tale shall be a good inspiration for me, ‘I will kiss several frogs before I get my prince.’ When Henry Ross Perot was building his computer company, he hired the best people he could find, and his motto was, ‘Eagles don’t flock. You have to find them, one by one.’ • Principle 2: Budgeting!Budgeting helps me to plan my finances: To become rich, I must budget. Budgeting lies at the foundation of every financial plan. It does not matter if I am living paycheck to paycheck or earning six-figures a year, I need to know where my money is going if I want to have a handle on my finances. Unlike what most people might believe, budgeting is not all about restricting what I spend money on and cutting out all the fun in my life. Budgeting is understanding how much money I have, where it goes, and then planning how to best allocate the money. ‘A budget tells me what I cannot afford, but it does not keep me from buying It.’ said William Feather, the American publisher and author.
  26. 26. Ojijo’s Investment Clubs Manual!Budgeting helps to save: Budgeting is vital to any savings strategy. It helps me to identify where my money is going. Wasteful consumption patterns can be 139 controlled through successful budgeting. PageBudgeting needs financial IQ: To draw up a good budget, I need to understand some basics of financial management. This knowledge is called financial intelligence, or financial IQ, and it will be the foundation of my financial success. The basics of financial management can be grouped into four 4 categories as below: ¥ Income - This is the money that flows into my hands. My revenue sources consist of my salary, my wage, investment income, and all other money that people give me as gifts or payment/consideration for work done. ¥ Expenses - This is the money that flows out. My expenses consist of taxes, housing expenses including utilities, transportation, food, clothing, insurance, health-related expenses, entertainment, etc. ¥ Assets - These are moneys that I own in various shapes and forms. My assets include my house, cars, savings, investments, and other items of value. ¥ Liabilities- This is money that I owe to other people. My liabilities include my home mortgage, car loans, and credit card debt.Then I also need to understand how to analyse my financial life and determine if I am living precariously, or living like an investor. For this, I need to know the difference between good cash flow and bad cash flow. ¥ Good Cash Flow - If I manage my money well, i.e., keep my revenue higher than expenses - I will have excess cash. I can save this money and buy more assets that can appreciate and generate more income. ¥ Bad Cash Flow - If I do not manage my money well, i.e., my expenses exceed my revenue -I will add to my debt, or have to sell some assets to cover the expenses. Either case, I am eroding my wealth and its growth potential.Budgeting needs a budget: And finally, the hardest part of creating a budget is sitting down and actually creating one. When I budget, I am spending on paper, on purpose, before the month begins. When I am spending my money on purpose, I will be on my way to financial freedom. ‘The way to wealth is as plain as the way to market. It depends chiefly on two words, industry and frugality.’ said Benjamin Franklin, one of the Founding Fathers of the United States, a noted polymath, leading author and printer, satirist, political theorist, politician, postmaster, scientist, inventor, civic activist, statesman, and diplomat.To live within my means is dignity. Francis Moore, the American author of 18 books and co-founder of three national organizations that explore the roots of hunger, poverty and environmental crises, wrote that, ‘The most substantial people are the most frugal, and make the least show, and live at the least expense.’ Budgets are plans. Budgeting is planning. Budget planning entails identifying the sources of income and taking into account all current and future expenses, with an aim to meet
  27. 27. Ojijo’s Investment Clubs Manual! financial goals. The primary aim of a budget planner is to ensure savings after the allocation for spending. It allocates future personal income towards expenses, 139 savings and debt repayment. There are several methods, plans and tools available for creating, using and adjusting a personal budget. PageThe Ojijo 10% Budget Plan: To create a budget, I will use The Ojijo 10% Budget Plan. The Ojijo 10% Budget Plan gives me guidelines of how to allocate the amount of revenue I have, after removing taxes, expenses and the other costs of getting the revenue, including kick-backs, commissions, interests, etc. The Ojijo 10% Budget Plan requires that I divide my revenue into TEN equal and separate areas, which all get 10% of the revenue allocation. The equality is premised on the fact that all parts of my daily living are equally important.The Ojijo 10% Budget Plan 1. Giving to help the needy, whether directly or indirectly; as tithe or charity; or through the church, mosque, temple or any charity organization like Red Cross, etc.; 2. Rent & Utilities, including security & gardeners, mortgage, home insurance, lease, etc; 3. Saving-2-Invest in various assets; 4. Entertainment, including vacations, gifts, club membership fees, hobbies, etc; 5. Education, both personal and for children, including seminars, talent development programs and education insurance plan, etc; 6. Food & Kitchen appliances and wares, including chefs, utensils, etc; 7. Transport & Communication, including vehicle insurance payments; 8. Clothes & Personal Hygiene, including leg wear, sprays, jewellery and bathing items, etc; 9. Household & House Maintenance, including house help expenses, furniture and fixtures; 10. Emergency & Insurance Fund, which should be able to take me for up to 3 months from the day I lose my source of income. This amount is the sum of all the ten percents (10%) for numbers 1-9, multiplied by three months. The Standard Is Rent. So, if my rent is USD$ 500, then all the other costs will be equally USD$ 500 each, and hence the emergency fund shall be USD$500*9*3 (months), hence, USD$ 13,500. Part of the emergency fund shall also be the payment for health and life insurance, since disease can and will strike at anytime; and death, however certain, is always an emergency.The rule of thumb is that any excess money that remains from any of the categories will be added to category 3 and invested to make me financially independent.
  28. 28. Ojijo’s Investment Clubs Manual! • Principle 3: Saving-2-Invest! 139How do I start investing money? By saving! The key to investing is savings. An effective savings strategy coupled with a smart investing strategy will help me to Page meet my financial goals. Every dollar saved now helps me to control my current consumption by which the size of the income that I think will be required for retirement is lowered. Also, through the power of annual compounding, it increases the size of the nest egg I will have for retirement.I should save 10%. Using an automatic payment plan, I can save and invest 10% of my paycheck every month. Today, out of every amount of money I earn, I will save 10% and invest it. Saving what I earn is the first step to acquiring assets. In his masterpiece, The Richest Man in Babylon, George Clason, the soldier, businessman and writer, advises income earners thus; ‘pay myself first.’ To save is to pay myself. Savings are used to create more money, not to pay bills. Benjamin Franklin, one of the Founding Fathers of the United States and a noted polymath, a leading author and printer, satirist, political theorist, politician, scientist, inventor, civic activist, statesman, soldier, and diplomat was right, ‘A penny saved is a penny earned.’ This is one area where the Universal Law of Accumulation works. Saving and investing means that I invest my money. I should be wary of borrowing money to invest. I must invest my own money. I should remember the wise words of legendary investor Warren Buffet, ‘If me don’t have it, don’t invest it.’ The simple truth is that those who borrow almost always pay a higher rate of interest than the rate received by those who save.To pay myself first, I will find out from my employer whether I can direct my paycheck to different accounts. If I do not have such a service, I can set up an account that will take the money automatically out of my checking account each month. I will let the amount be directed to an investment account. This is re- enforced savings which implies I save first and spend the rest from my paycheck. My goal should be to save at least 10% of my total before tax earnings. This should be the minimum. Most millionaires live far below their means as they are disciplined and highly focused on their financial goals from the beginning. They are millionaires because they have decided to be so.I need discipline to save: To achieve any goal in life, one needs to be disciplined. Similarly, saving to invest requires discipline. A disciplined approach helps me to remain focused on my financial goals. I will formulate a plan and review it periodically to ensure that I am on the right track. I will conduct a careful study of my consumption patterns. I will then identify items of expenditures that I can do without or explore opportunities to reduce my costs without unduly sacrificing the item. And then I will divert any cash savings automatically to an investment account.
  29. 29. Ojijo’s Investment Clubs Manual! • Principle 4: Long Term Investing! 139‘Always invest in the long-term’, Warren Buffet advises. I need to invest long term. I should not be influenced by short-term fluctuations. These are inevitable in all Page economies as well as businesses experience the boom and bust cycle. I should not try to time the market. I need to get in and stay in. I should review my plan periodically, and whenever my needs or circumstances change. If I am not confident that my plan makes sense, I will talk to an investment advisor or someone I trust. A long-term view helps me to safely invest in riskier investments, such as stocks, which the market rewards in general. This requires patience and discipline, but it increases returns. This approach reduces my choices to two: stocks and stock mutual funds. In the long run, they are the winners. The additional risk is worth it due to the power of compounding. 10% a year for 20 years is 570%, but 7% a year for 20 years is only 280%. I should not procrastinate.I should begin now because an early start can make all the difference. An early start provides a long time horizon for compounding to show its true benefit for the investor. For average people, investing is not so much a helpful tool as the only way they can retire and maintain their present lifestyle. By investing long term, I am planning ahead. By planning ahead I can ensure financial stability during my retirement. ‘It never was my thinking that made the big money for me. It was always my sitting. My sitting tight!’ said Edwin Lefevre. This blunt warning is treated by many financial advisers like the Bible. Once I arrange my assets into my ideal allocation, I should not tinker.I will rebalance once a year to keep my mix on track, but otherwise, listen to Livermore and sit tight. I will remember that even if the market tanks it always recovers for long term investors, and when it is low I will snatch up a lot of shares at bargain prices. As long as I am dollar-cost averaging I will always be buying shares at a cheaper price.The market can remain irrational longer than I can remain solvent. Bubbles occur. However, investors should never attempt to short them because, while bubbles eventually burst, they can grow larger and last longer than investor resources. This requires patience and discipline, but it increases returns. The additional risk is worth it due to the power of compounding. To invest long term, I should not procrastinate. I should begin now because an early start makes all the difference. An early start provides a long time horizon for compounding to show its true benefit for the investor.Further, I should invest long term since the liquidation value (if I said, get me out of this Club and give me my money back), I will often get less than my original capital contributions during the first two years. That is to say, investing in the stock
  30. 30. Ojijo’s Investment Clubs Manual! market is a long-term proposition, and I may only see my contribution increase in value after the second year or so of investing. 139 Page • Principle 5: Portfolio Diversification!Portfolio diversification is the golden rule of successful investment: This simple strategy is overlooked by 85% of investors. Diversification is a fundamental aspect of financial planning. In a nutshell, it is the old adage to not put all my eggs in one basket. If I have all my eggs in one basket and something happens to the basket then I am in big trouble. But instead, let me say I keep some of my eggs in the refrigerator. Then if something happens to the eggs in the basket I still have the ones in the refrigerator. The practice of diversification says that I should have a little in each of these to diversify myself against risk of the stock market and whatever else might happen in life.I will diversify - by company, by industry, by company size and by geography. In stocks and bonds, there is safety in numbers. No matter how careful I am, I can neither predict nor control the future. So I must diversify. “In stocks and bonds, as in much else, there is safety in numbers.” If I own the right number of stocks, bonds and funds and they are allocated across several categories, industries and geographies, I can substantially lower the risk of losses to our portfolio and increase returns at the same time. If I diversify properly; I can lower risk AND improve returns at the same time, making this a no-brainer. Diversification is the process of finding the investing sweet spot where I can optimize risk vs. return.Diversification is about mixing: Another critical piece is the diversification mix. I want to invest in a wide variety of industries, categories and geographies to ensure that when one specific area goes south, it does not tank my whole portfolio. My portfolio should be spread across a wide variety of categories and geographies, most of which will not correlate at all with anything going on in telecom, some may even be inversely correlated (meaning they do well when telecoms do poorly).For example, if I own a telecom and suddenly the industry is getting bad press due toinvasion of privacy lawsuits, the rest of our portfolio can cover the losses of that stock. Why?If were diversified, that is probably our only telecom investments, the rest are in unrelatedindustries and will not be directly affected by these lawsuits.Diversification is about diverse asset allocation: As an investor, I should have a diverse asset allocation. This means I spread my money between various types of investments, not buying only stocks, bonds or funds, but buying a combination. Portfolios should include allocations to the asset classes of large-cap and small- cap stocks, value and growth stocks, real state, international developed markets,
  31. 31. Ojijo’s Investment Clubs Manual! emerging markets, and the appropriate amount of bonds. Diversification is the closest thing to a free lunch there is in investing. To make the alchemy work, I 139 must load up on assets whose up and down cycles do not run in sync: stocks (local and foreign, as well as large-company and small), bonds (of varying Page maturities), cash, real estate and commodities. Investment centers on diversification.Different securities perform differently at any point in time, so with a mix of asset types, my entire portfolio does not suffer the impact of a decline of any one security. When my stocks go down, I may still have the stability of the bonds in my portfolio. Diversification is always working. The reason I want a blend is because each type of investment behaves very differently. The rule of thumb is that the further I am from retirement the more I should allocate to more aggressive investments like stocks, and the closer I am to retirement the more I should allocate to shorter term lower risk investments like bonds. Stocks, for example, have the highest potential return of any type of investment but they also have the highest risk of losses. Bonds, on the other hand, cannot provide the types of returns a stock can but they offer stability since their returns are often guaranteed. A blend of different asset classes is just another way to diversify and I can choose from a wide variety of allocations.Diversification reduces risk: Diversification is important. If I spread my investments across various types of assets and markets, I will reduce the risk of catastrophic financial losses. Diversifying investments in a portfolio helps to manage risk. The safest port in a sea of uncertainty is diversification. As most successful investors will tell me, diversification is king. A diversified portfolio not only reduces unwanted risk, but also contributes to a winning portfolio. And having a well-diversified portfolio does not necessarily mean just buying more than one stock; branching out into other areas of investment could be a viable alternative.‘It is the part of a wise man to keep himself today for tomorrow and not to venture all his eggs in one basket.’ said Miguel de Cervantes. Nothing can break the law of risk and reward, but a diversified portfolio can bend it. When I spread my money properly among different asset types, a rise in some will offset a fall in others, muting our overall risk without a commensurate drop in return. Diversification reduces risk without reducing expected returns. Once investors diversify beyond popular indexes, they will be faced with periods when popular benchmark indexes outperform their portfolio. The strategy to get rich is entirely different than the strategy to stay rich. One gets rich through inheritance or by taking risk. One stays rich by minimizing risk, diversifying and not spending too much.To diversity, I need a portfolio.
  32. 32. Ojijo’s Investment Clubs Manual! PORTFOLIO: A combination of different investment assets mixed and matched for the purpose of achieving an investors goal(s). 139Items that are considered a part of my portfolio can range from real items such as art Page and real estate, to equities, fixed-income instruments and their cash and equivalents. There is not just one strategy that can be used to invest successfully. Ideally an investment portfolio should have both equity and debt instruments. Using this guideline I can allocate my money as best fits my personal situation. This strategy does not even rely on my ability to pick stocks. It relies on the principle of diversification. I should divide my money between these types of investments.Risk of non-diversification: There are horror stories of people losing all their money on the stock market. The main reason this happens is that people do not place their money in a variety of investments. Doing this spreads the risk of losing my money. I will not be the person who complains about how I lost all my money on the stock market. I will be one of the success stories who knows how the market works and how I make money, by having a diversified portfolio, focused on the long-term. Even if I love shares, I should not buy only stock in one asset class like utilities or banks or tech stocks. Industry stock prices move together so when one bank stock goes down the others all go down too. Most investors are comfortable allotting all their money to one investment. If that stock goes up, great; if not they are back at square one. I should diversify against risk. If I follow a diversified investment plan I reduce my overall risk as compared to being invested in only one type of security. Diversification will help offset the volatility I may have with stocks. If my stocks go up then I realize larger overall gains. • Principle 6: Dollar Cost Averaging!Dollar cost averaging is buying at intervals: Dollar cost averaging is a technique by which an investor divides the given investment over a period of time and invests that amount on a regular basis as opposed to buying in all at once. When an investor buys the same stock or mutual fund at regular intervals and with a fixed amount, he or she is said to be using the dollar cost averaging method. If the market price of the selected stock or mutual fund declines, the investor will buy a greater number of shares. On the other hand, when the market price of the selected stock or mutual fund increases, the investor will buy lesser number of shares.Dollar cost averaging reduces risk of price fluctuations: By putting in, say, $100 each month (rather than a large amount once a year), I sometimes buy when the prices of the units of the fund are higher, and sometimes when prices are lower. In the end, the purchase prices average out. I can hence reduce some of the risk that poor timing and potentially adverse price fluctuations will have on my

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