I came across this blog post ( http://www.wealthinformatics.com/2011/08/01/scam-protection-online-email-scams/ ) about scams, and it made me realize I'm thinking about my future investments without discussing them with others. And that my "greed" and/or my "guilt" could prevent me from making the right or best decision. Investments aren't (always) scams of course, but some of the reasons why you'd fall for scams are similar to why you'd fall for "the wrong" investments.
I'm currently considering an investment of 1000 or 2000 euros (to be earned by me in the next few months) into a "green" fund, which is funding a wind energy park on the North Sea. They claim 7-10% of dividend per year for 20 years. There is insurance in case of weird storms. The price of electricity cannot be predicted but it is likely not going down, much.
After that, the wind mills will be dismantled and they say the costs of dismantling will roughly be balanced by the value of the wind mills then. They say you will, at the end, receive the "intrinsic value" of the participation, but I don't know how much that's going to be - I can very well imagine that it's not going to be the 1000 or 2000 I put in originally.
Unfortunately the website's in Dutch: http://meewind.nl/
I like the wind energy idea. Here's where the "guilt" part comes in - I think we should find more environment-friendly ways of producing electricity. I like the thought of making 7-10% per year on my money for 20 years. That's where the "greed" part comes in.
1000-2000 euros isn't "much". It's one month's salary. It will be about 6-12% of my current savings (and much less of what I plan to save in the future). But throwing it away isn't the wisest choice, of course.
If the average dividend is 7% per year and I put in 1000 euros, it'll be a total of 20 x 7% x 1000 is 1400 euros. If the "intrinsic value" of the participation is zero at the end, then I'll have made 400 extra euros out of a 1000 euro input, is about 2% per year. If the "intrinsic value" at the end is 500 euros, then it's 900 extra euros made out of 1000 euros is about 4.5% per year. If it turns out the dividend is closer to 9% and the intrinsic value at the end is 500 euros, then I'll have made 1300 extra is 6.5% .
Help me decide?