Making investments is an efficient and effective way to utilize capital and build wealth from it. Investment not only allows you to create assets but also ensures that your money remains insulated from inflation. Over time, the value of your money investments hopefully increases due to the investments you made. This happens due to various factors such as compounding returns, increases in the price of shares and overall increases in the value of the assets you invested in. Investors all over the world use four factors to evaluate any investment.
To begin with, Risk vs Reward. All investment decisions big or small involve a certain amount of risk. Investors take this risk in order to earn the reward offered. However, it is important to calculate the risk and only then make a decision. Ideally, you want to invest in a project that has a low risk and offers good if not high returns. Moving on, investment capital. This is the amount of capital that you can utilize while investing in a project. The amount of money that you have would define the kind of investments you can make. In numerical terms, a $10,000 investment would differ from $100,000 investment. You can invest differently depending on the amount of capital you have for investment.
Thirdly, individual risk appetite. This is the amount of risk an individual is willing to take by investing in a project. This may differ from person to person as some people are risk averse while others are risk takers. Last but not the least, time horizon. As mentioned above, investments are considered an intertemporal exchange of capital that allows individuals to benefit by providing them with monetary returns. Investments are long term when compared to trading, thus you should critically evaluate the returns stretched over a period of time before you make an investment decision.
Asif Ali Gohar is a German entrepreneur and an innovator that wants to launch the production of vegan leather in Pakistan. He requires both, a team that can help him with managing the business operations in the country as well as investors that can chip in capital to get the project started. Asif envisions Pakistan to be one of the largest producers of vegan leather in the world. He believes that Pakistan’s leather industry holds great potential which can be utilized to supply vegan leather products all over the world. His methods use rice as the main raw material which is converted into a polymer which resembles the properties of animal based leather.
While other methods for production of vegan leather exist, they are environment intensive. As a result, they cannot be pursued on a large scale. Whereas, this is an environmentally friendly process and even the leather produced is not dangerous for the environment when disposed of. There is a sharply rising demand for vegan products as such and the global vegan leather market has experienced double digit growth in the past few years. It is predicted that the vegan leather market could be worth $89 billion just by 2025. Therefore, this seems to be a promising project and worth investing in.