Investment For Retirement :: Agent Training :: Retire Rich
Ipo investing provides a great opportunity for proactive employees to invest in a young public company and watch their money grow over time.
Here's one of the top wealth creation secrets most people don't know.
IPO (Initial Public Offer) investing can make you massively rich.
How?
Simple. Most young companies going public are relatively unknown by the general public.
Therefore, the public perception of the value of these companies is that of well, "it is just another company entering the stock exchange. How good is their management anyway?"
Yes, privately owned companies do not face the same level of in-dept scrutiny that public companies face.
Consequently, ipo investing for these potential public companies are taken seriously often by people who understand the intricacies of stock investing and those who have financial experts advising them on stock investing matters.
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What happens when a new, relatively unknown private company goes public?
Well, one of the first things you notice is the share price at the initial public offer is often lower than that of other publicly quoted companies in the same sector.
This means that, if the private company initiating the IPO is, say, a manufacturing company with high quality products and a solid management team (or a technology company with potential for global customers), the share price could grow by up to three times its value in 5years.
Wait. Is this just fantasy or could this really be true?
Sounds too good to be true but it has happened over and over again for certain types of companies.
For example, Google Inc. went public in August 2004. The IPO price at that time was $85 per share.
As at January 2017, the class A shares is about $1,112 per share.
If you take some time to work that out, it comes down to 17 percent growth in value year on year for 13years.
Guess what.
That is just the growth in share price.
An employee who had adopted the ipo investing strategy when Google went public in 2004 would over time have earned dividends on his stock investment.
Yes, that is dividends year on year for the last 13years on top of the fact that the share price growth has already delivered a 17% return on investment year on year.
The best part is this . . . employees and the general public who invested in Google shares at the initial public offer in 2004 didn't have to do anything for the company to earn their dividends.
This is passive investment income at its best!
Initial public offer investing is a no-brainer.
You simply invest and monitor the news to see how the company you invested in is faring.
We recommend that you invest in initial public offers with the following criteria to get maximum value from your investment.
1. The company must offer valuable products or services that will make for strong growth in the long-term
2. The company must have experienced management team
3. The financial records of the company must show a consistent greater than 20 percent gross contribution year on year
4. The company must have solid asset base
5. The company must not be burdened by debts
6. The IPO price must be significantly low compared with other companies in the same sector and offering similar products or services
IPO investing is a smart way to build long-term income without actually participating in the activities of the company helping you to build the income.
Yes, when you invest in initial public offers of solid companies (and in as many of them as you can find), you literally get your money working for you while you sleep.
More important, ensure you hold those shares for 15years to 20years before considering milking them for cash.
This is one of the best ways to achieve financial freedom after retirement.
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