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Saturday morning I got a call from a friend about a potential plot that is available for sale in a specific town. He first sent a text and asked if I can call regarding the matter but I never did. After a day or so, he called with all the details and I asked him to get back to me with a bit more information.

This morning while I am minding my own work, I got a text around a lodge for sale in another town that is available for sale for N$21 million. Maybe I might be interested or know someone who is.

I do not know what prompted these people to ask me or give these offers but I do not know something triggered them to. While my mind is quick to dismiss  the idea on the basis that I might not have the cash, that is not the best way to throw away a potential investment.

So what am I to do in this situation? What do you do when you are approached  with a potential investment idea by a friend, colleague or a stranger? Think about it logically.

Some of the consideration may include:

  1. Do not make a rush decision. Take time to think about it and consider all the facts.  If you make the decision in the moment you can miss important factors that might have the ability to change your decision.
  2. Consult- It is important to ask a few people’s opinion, especially from those who has your interest at heart and who might have knowledge in the subject matter. In this my case around the sale of a plot- I enquired about a few things and I completely even forgot to ask the plot size. Only when I mentioned it to someone else, they asked me how big is the plot and I then I realized I would have missed it. You can only think about soo much  at a time.
  3. Maybe look at pooling resources if you cannot afford. In finance, a syndicated loan is a loan granted by multiple banks because none of the party is willing to bear the risks in full. By coming together, each party ( normally banks) funds a portion of the amount needed. You can use the same principles, if you maybe are not interested alone, find other investors that can partner up with you.
  4. Before you sign any agreement or paper binding you to the sale, please ask your lawyer friends to read over your contract so that you are aware of the terms and condition. You can read it yourself but mainly a lawyer’s instinct will tend to pick up binding clause that me and you would ordinarily miss.

Finally know your risk appetite and when the risk is to high, remember to say No.

How do you evaluate potentially investment decision?

Regards

Dhalondoka

 

 

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