Two of the focuses of my blog are Financial Literacy/Money and Business/Entrepreneurship. There are numerous ways invest money for a ‘return’. One was way is to become a shareholder. The following contributed discusses what’s involved in being a shareholder and is entitled, Top Tips For Being A Shareholder.
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If you are looking for a new direction to take within your professional career this year, one of the things you could consider doing is taking up the role of a shareholder. A shareholder or a stockholder is any person who decides to buy a small share of a company or a product. As a shareholder you will often be able to get benefits such as discounts on products, dividends as a reward and also a hand in the decision making of the business.
Today we are going to take a look at what it takes to be a shareholder and some of the top tips which you need to know if you want to be a successful shareholder this year. There are some amazing opportunities to be a part of when you become a shareholder and you can see this with Ogletree Deakins Shareholder Appointments, and this is why we want to bring some handy tips and tricks for you today.
1. Look into the business
When you want to become a shareholder the first decision you will have to make is to choose which business you want to invest in. This is a big choice to make for yourself and for the business and this is why you need to make sure you take your time and think it through. A good idea if you have the money will always be to take a share of a brand you know and trust because this can lower your risk. If not though, you need to be very careful with your decision making. Take some time to come up with a budget and narrow down your search to a few different companies. When you do this you will want to take some time to look online and look for any evidence of bad reviews and scams associated with the company. If your search comes back clean and the company seems to be trustworthy then you have no reason to worry and you can go ahead and invest in the company.
2. Do you know the shareholders?
One of the other ways that you can get into the world of shareholding is by being asked to join by someone else. If this does happen to you, be sure that you take a moment to consider before saying yes right away. Have a think about who asked you and decide whether or not you trust them and know them enough to do this with them. It can be a dangerous choice to trust the wrong person so be sure that you take the opportunity to do this and be sure that you know what you are signing up for.
3. Responsibility
Depending on how much of the company you decide to buy, you will be asked to have an input in the decision making of the business to help guide it to success. Therefore because of this you need to be sure that you have a contract on the dotted line of what you are responsible for and what you are not. The reason for this is that you want to make sure you aren’t held accountable for a bad decision which could lose the company some money.
4. Money
The big question to ask yourself and of course the biggest reason why people invest in the first place is to make money. Before you spend money be sure that you check how much you can reasonably afford. When we say reasonably, we mean that rather than adding your whole savings to an investment you will want to make sure that you have a buffer which is kept safe in your bank account. Take the time to come up with a realistic budget and be sure that you only pay what you can afford to risk. Think about the risk of failure with your new shareholding position and this will help you decide how much to put in.
5. Death
If you are to invest highly in a company which only has one other partner, you need to consider what will happen if your partner suddenly becomes ill or dies. It is one of those things that no one wants to think about but you will need to have some measures in place in case the worst does happen. Make sure that you take the time to plan out what would happen if either of you died and this can be a huge decision to make which can save you later on.
6. Exit strategy
As much as knowing what you want to do when you are investing in a business, you may want to know what to do if the business starts to fail. It is always important to have an exit strategy should anything g go wrong and it can be what saves you from losing a lot of money.
