PRIVATE INVESTORS

 Is an individuals or firm that shows a keen interest in investing their money in a company.
 Is a key source to raise startup capital for the businesses
WHAT IS PRIVATE INVESTMENT?
-Is a purchase of a capital asset that is expected to produce income, appreciate in value, or both
generate income and appreciate in value.

TYPES OF PRIVATE INVESTOR

 Friends & Family
 Angel Investors
 Equity Investors
 Venture Capital
 Peer to Peer Investors
1. borrower
2. lender
3. middle-party firm.

PROS OF PRIVATE INVESTORS

 Not a Loan
 No need for proven
 Access to Investor’s Expertise
CONS OF PIVATE INVESTORS
 Dilution Of Share Of
 Higher Stakes At Risks
 Affects Controlling Power

LIFE CYCLE THEORY

 Is an economic theory that describes the spending and saving habits of people over the course of
a lifetime.
Life-Cycle Hypothesis - states that individuals seek to smooth consumption over the course of a
lifetime

Consumption will depend on:

C= consumption
W = Wealth
R = Years until retirement. Remaining years of work
Y = Income
T= Remaining years of life

Criticisms of Life Cycle Theory

 Diminishing marginal utility of income.
 It assumes people run down wealth in old age, but often this doesn’t happen as people would
like to pass on inherited wealth to children.
 It assumes people are rational and forward planning.
 People may lack the self-control to reduce spending now and save more for future.
 Life-cycle is easier for people on high incomes.
 Leisure.

3 MAIN INVESTOR TYPES:

1. Pre-Investor – is simply someone who isn’t investing.
2. Passive Investor – are those who doesn’t participate on day-to-day running a company.
3. Active Investor – refers to an investment strategy that involves ongoing buying and selling
activity by the investor.
PENSION FUNDS
 A fund from which pensions are paid, accumulated from contributions from employers,
employees, or both.
 also known as a superannuation fund in some countries, is any plan, fund, or scheme which
provides retirement income.
 Pension funds typically have large amounts of money to invest and are the major investors in
listed and private companies. 

INSURANCE COMPANIES
 It assess the risk and charge premiums for various types of insurance coverage.
 The insurance company pays you up to the agreed amount of the insurance policy if an insured
event occurs and you suffer damages.
 It is a financial institutions that provide a range of insurance policies to protect individuals and
businesses against the risk pf financial losses in return for regular payment of premiums.

4 TYPES OF INSURANCE
1. Motor Insurance
2. Health Insurance
3. Travel Insurance
4. Home Insurance

 An endowment fund is an investment fund established by a foundation that makes consistent

withdrawals from invested capital.
What is Endowment Policy?
- an endowment policy is a life insurance contract designed to pay a lump sum after a specific term
or on death. Typical maturities are ten, fifteen or twenty years up to a certain age limit. Some policies
also pay out in the case of critical illness. Policies are typically traditional with-profits or unit-linked

BANKS
 Is a financial institution licensed to receive deposits and make loans.
 Banks use the money in deposit accounts to make loans to other people or businesses. In return,
the bank receives interest payments on those loans from borrowers

TYPES OF BANKS
 Retail Banks
 Commercial Banks
 Investment Banks