Записи по метке : "wealth"

6 World’s Most Outstanding Investors of All Time 02.07.2020

When investors start their careers, they learn a lot, test different strategies, and put their newfound knowledge into practice. However, not many of them think about the paths of other successful investors. Why should you read about them? Well, it lets you learn from the mistakes and successes of others – sometimes, you might even gain inspiration from their ideas. The list of investors who achieved the top of Forbes is enormous. Nevertheless, we will tell you about the most outstanding ones.

1. Warren Buffett

$62.9, CEO, Berkshire Hathaway

Of course, we couldn’t start with a different name. Warren Buffet is one of the most wealthy and successful investors of all time. His path was predetermined when he was at a dinner with his dad and a member of the NYSE. He was only ten years old but knew his life would be connected to money. 

Buffett made his first investment when he was only 11. He bought six shares of Cities Service for $38 each. When he turned 16, he possessed $53,000. How? He worked hard, delivering the Washington Post. Since 1969, he has been focusing on Berkshire Hathaway, the company that became a benchmark for successful investments. 

Reading is a key to his success. All the information Buffett’s needs for trading, he takes from newspapers. 

When evaluating stocks, he follows two rules. The first one is to know the company’s quality. So, you should check balance sheets and know everything about its management. The second thing is to evaluate the price of shares only after you are sure about the company’s quality. Thus, if the company’s condition isn’t great, don’t buy its shares-  even if they are cheap. 

Warren Buffett may be 89 years old, but his word means a lot for investors and global financial markets. 

What to learn: Warren Buffett can teach you to work hard but be thrifty. A fortune doesn’t mean you should waste all your money. 

2. Stephen Schwarzman

$11.7, Chairman and CEO, Blackstone Group

Stephen Schwarzman’s career was built by climbing the corporate ladder at Lehman Brothers. When he turned 31, he took the position of the managing director. In 1985, he launched Blackstone Group, a company that focused on mergers and acquisitions. Later, it included leveraged buyouts. Currently, it operates with more than $470 billion in assets and trades. Twice within the last ten years, he was named one of 50 the most influential people of the year by Bloomberg. 

What to learn: Stephen Schwarzman teaches you that your career may start in one company where you will grow as a professional. But it doesn’t mean you have limits for your own enterprise. 

3. Carl Icahn

$21.5B, Founder, Icahn Capital Management

Carl Icahn’s career began in 1961 when he worked as a stockbroker on Wall Street. Nearly seven years later, he founded a security firm- Icahn & Co. Nevertheless, he takes leading positions in several companies to get voting rights. He owns shares of giant enterprises such as Time Warner and Yahoo.

Mr. Icahn is called a ruthless “corporate raider.” However, like any other investor, sometimes he suffers bad times. For example, his investment fund has been incurring losses for almost three years. Still, he continued buying shares in different companies. 

What to learn: Mr. Icahn can teach you to behave aggressively in the market. Be a lion, not a sheep. He said: “You learn in this business… If you want a friend, get a dog.” 

4. Bill Gross

 $1.5 billion, Cofounder and Co-Chief Investment Officer, Pacific Investment Management Company LLC

Bill Gross, also known as the “Bond King”, founded PIMCO and operated one of the most significant bond funds, the PIMCO Total Return Fund. He focuses on portfolio management. 

Mr. Gross said that if you really like a particular stock, put 10% or so of your portfolio in it. Make the idea count. Good investment ideas should not be diversified away into meaningless oblivion.

What to learn: Every newbie trader learns that diversification is a key to great benefits. Nevertheless, it’s also a risk to lose opportunities if one of the asset moves in your favor and others stay on hold. Investors should always have some money on hand for if they find an excellent opportunity, and their research ensures they will win. 

5. David Tepper

$11.6, President and Founder, Appaloosa Management

Mr. Tepper is a successful hedge fund investor who has managed to get significant returns since the financial crisis of 2008. In 1992, he left Goldman Sachs and launched Appaloosa Management. He succeeded by investing in company strategies such as MCI and Mirant. The primary approach is a focus on distressed companies.

What to learn: David Tepper can teach you an exciting strategy. You can choose distressed companies and wait until their stocks recover. For example, in 2009, his hedge fund received nearly $7 billion on the recovery of distressed shares. 

6. George Soros

$24.5B, Founder, Soros Fund Management LLC

We started with one of the most famous names and will end our list with another legendary investor you have most likely heard about. It’s George Soros.  

Mr. Soros was born in Hungary, but when he turned 17, he moved to study in England. George worked hard to pay the tuition at the London School of Economics. 

His most famous deal is the breaking of the Bank of England. Somehow, he knew the central bank would devaluate the domestic currency and sold $10 billion in GBP. After the British pound plunged, he bought it back.

Mr. Soros was involved in plenty of scandals and controversial situations. He was charged for insider trading and may have participated in Thai baht speculations. His fund suffered millions of dollars in losses, but George Soros is still one of the world’s wealthiest people.

What to learn: George Soros never gives up, although he has gone through difficult times. If you want to be successful, you should have the strength to survive losses and unpleasant situations. 

Conclusion

In conclusion, to become a successful investor, you should learn about other’s mistakes and successes. The most practical examples are the wealthiest and most successful world’s investors. Combining their strategies and approaches, you can raise your chances of getting higher benefits

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How Big Is the Gap: Real Facts About Wealth Inequality 28.06.2020

If we look at all of the world’s history, we can see that there is a problem of wealth inequality that has existed for centuries, if not millenniums. 

Presently, this topic is one of the most discussed and debated around the world. The problem of social inequality has worsened as a result of the ongoing global financial crisis. 70% of the world’s population lives in countries where the gap between the rich and the poor has widened dramatically over the past 30 years. This is the most uneven that the distribution of wealth has been in decades. 

Before the 21st century, scientists speculated about the nature of human relationships and the justice or injustice of inequality. For example, a theory of the roots of social inequality was developed by Adam Smith.

He identified three main classes: wage earners, landowners, and capitalists. Inequality in society is divided into productive and unproductive. Smith was the first to point out that society does not consist of traditionally distinguished groups, such as the nobility or the bourgeoisie, but new classes, and this division has an economic essence. Thus, Smith revealed a further factor of inequality (economic).

Economists have been studying the consequences of this process for the past ten years. In 2015, hundreds of researches gathered in a day-long conference to present one topic: 

Rising Wealth Inequality

Sadly, wealth inequality statistics have not shown any improvement in households for the past century. 

1) Wealth inequality has had a U-shaped pattern since 1913. Starting from 1929, the exponential curve began to flatten. However, it began to rise once more in 1989. 

2) The middle class does not have a more significant share of wealth than it used to have 70 years ago. The biggest asset of a middle-class household is typically their house.  1% of the population holds 42% of the entire wealth. In time, we might see the total rise to over 50%

3) The 1% holds more assets due to the simple diversified wealth accumulation. In other words, the wider portfolio provides money and new assets.

Based on the following research results, we can conclude that “the rich get richer” is not that far from the truth.

Another wealth inequality fact is that there is a racial gap of almost $40,000. White, Black, and Latino people all earn different sums on average. When we apply this information to the wealth gap: it accounts for more than $100,000.

Another fact: 73% of homes are owned by Whites, leaving less than 30% to Blacks and Latinos. 

Wealth Inequity In the World

Income inequality has increased in almost all regions of the world in recent decades. Inequality remained stable only where it was already “extremely high” – in the Middle East, sub-Saharan Africa, and Brazil.

Indeed, the situation is not as hopeless as we might observe. On a global scale, those countries that were previously very poor have started to close the gap massively in the last 30 years. The very rich, as well as the middle class in China and other Asian countries, have benefited the most from this process.

In China and India, the inequality between the poor and the rich is huge. However, the gap is still smaller than in regions like the US or Europe. 

What Causes the Gap Between the Rich and the Poor

  • Access to education plays an important role in increasing inequality. A huge number of people on our planet cannot afford education, which plays an important role in the development and the ability to grow. Access to good, free public education increases everyone’s chances of having a more independent, healthy, and productive lifestyle.
  • Affordable health care for the entire population is also a central issue in reducing the gap between the rich and the poor. The poorer a person is, the fewer opportunities they have to get decent treatment. They do not have optimal earnings and can hardly afford private insurance.
  • Taxation is another factor. In many countries, there is a lack of funding for socially important services. However, the central problem is that rich people are evading their taxes. 90% of the rich have a connection with offshore zones. International companies strive to pay as little tax as possible in the long run.

So, for example, Apple is “located” in Ireland. In this country, the corporation pays only 0.005 % income tax; it is only 50 euros per one million euros. Another company, the German chemical group BASF, saved about 923 million euros thanks to tax tricks in Belgium, the Netherlands, and Switzerland.

Thus, the home countries of corporations lose about 190 billion dollars each year. Fair taxation and transparency of income would significantly reduce poverty and social inequality.

Other reasons for wealth inequality in the world in 2020 are:

  • Economic and financial crises
  • Negative manifestation of globalization
  • Growth of inflation
  • Growth of unemployment (except natural)
  • Unjustified reduction in the level of wages when prices are stable or rising
  • Low birth rate and high mortality

Potential and Future Consequences 

The growth of poverty and the decrease in income of the population is slowing down economic growth. A decrease in income reduces demand, which reduces the scale and volume of production. As a result, the real GDP (at the regional level – GRP) becomes lower than the potential one, and the country’s economy lags behind its potential, resulting in a low birth rate and high mortality.

At the same time, it is important to determine what social consequences may occur and how it is dangerous for society.

  • Inequality can give the rich an unacceptable degree of control over other people’s lives (in particular, by influencing media channels)
  • Inequality can undermine the fairness of political institutions (increasing corruption and lobbying in government)
  • Inequality undermines the fairness of the economic system itself
  • Inequality affects the interests of employees who do not receive a fair income, taking into account their contribution to the national budget

Conclusion

Based on past history, it is clear that wealth inequality will not be overcome even in this century. But, access to the Internet provides the opportunity for everyone to show their talent (SNS platforms), educate themselves (online schools), or even invest. 

In the past, investment was only in the hands of rich people. Modern technology and FinTech allow anyone to try it. If you are interested in trying your hand out investing, look to the Einvestment platform. It is transparent, clear, and easy for the investment of any portfolio.

Wealth inequality will keep rising in 2020 due to COVID-19, but it does not mean that it is impossible to earn investment returns. 

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