Queen & Kings of Cash by Paul N. Lee

A lot of men and women who are incarcerated at some point come into sizable amounts of cash either through some kind of venture or from an inheritance. When they receive the money, most immediately want to invest some of the payoff for a future return. This isn’t a bad decision. In fact, Bishop T. D. Jakes refers to this as “Throwing Blessings Forward”. The problem however is that most of us come from disadvantaged environments and was not taught correctly how to properly invest. Also, a simple solution has arrived.

When you first decide to invest your money, you first determine your reason ‘why’ you are investing. Are you looking to preserve your initial investment cash? Are you investing for the hope of the asset appreciating in value, or are you trying to generate current income or increase your current income? After you have determined your why, you must then move onto analyzing the current interest rate market and inflation rate because these will have a profound effect on which investment vehicle you will have to choose in order to fulfill your why. The next step would then be to consider your tax consequences for each investment asset you will choose.

Next, you need to devise a holding period. Are you holding your investment for long term (any period over 5 years? Or is there a short-term investing period. Short-term investing often require more consideration such as how much of a return does the investment asset throws off and how much should be invested now at that investments rate of return in order to receive X amount in the future. This is called the “Present Value or Future Earnings”. Because we are incarcerated, I am on the side of long-term investing and current income because cash is definitely king.

Finally,

You need to know what your “number” is. As your portfolio grows, so does your net worth. Trimming your portfolio periodically make sense unless you want to be on the hook with the tax man and send your kingdom into disarray

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