1933
Having
investments is one way of growing your money. To be successful at it,
you must avoid some investment mistakes. These useful tips will help
with your decision
Invest small
A lot of people make mistakes because
their investment strategies are too complicated. For a first-time
investor or an experienced investor who intends to test run a new idea,
the key to wise investing is to keep it simple. Invest small and start
small.
Spend less money
Cutting down on spending does not mean a
frugal lifestyle or forgoing all fun, but simply trimming back the
unnecessary and avoiding waste. This way, you can save more money to
invest.
Invest 15 per cent of your income
Just like every investment professional
will tell you, consistently investing 15 per cent of your income every
month will grow your investment in a huge way. Successful investors
re-invest some or their entire recouped fund. No matter the percentage
you decide on, be disciplined and stay focused.
Regular direct debit
Sometimes, it could be quite difficult
to trust yourself with money. A regular monthly payment or direct debit
from your account could suffice as a more reliable way of moving the
money and investing it. This way, you are also saved from diverting the
money elsewhere, or investing it in the wrong place.
Don’t put all eggs in one basket
Spreading your investments across
different areas helps to protect you when things go bad. Putting all
your wealth in one business does not count as a wise method of
investment. To decide on how you should allocate your investments,
consider your attitude to risk, how much you can afford to lose, what
period you have to invest over and your short, medium or long-term
financial goal.
Have emergency cash
You don’t want to be stressed out about
your finances while you are making a fresh investment. It is advisable
to have three to six months of emergency cash at hand. You may need a
much bigger cushion to fall back on, especially if you have no other
source of income.
Be knowledgeable about your investment
To ensure your money is safe, invest in
something you know and can understand. If you can’t clearly explain what
you’re investing in to someone else, then you don’t need to invest in
it. Also, ensure you invest in something that is easy to track. That
way, you would know if you are making profit or running at a loss.
Have an open mind
Investors who are too conservative with
their investments hardly take risks. Being negative about every
investment opportunity is a terrible way to invest your money. You do
not know how safe or profitable an investment idea is until you try it.
Making losses as your first trial does not mean you have failed, it
simply means you have learnt one way not to invest.
Get professional help
Before you embark on any investment, it
is advisable to seek advice concerning the investments from a financial
advisor or financial planner. Look for someone who charges a low fee. A
great financial planner will make sure you understand everything about
what you want to invest in.
Be patient
It is normal for the value of your
investments to go up and go down over time. You may not start making
profits immediately, so you have to learn to be patient with your
investments. In the long run, they will appreciate in value. Don’t think
about your investments in terms of how they are doing currently, think
about the futuristic value.
Avoid debts
When you have no debt, you have more
money to invest. The more money you invest, the more opportunity you
have for your investments to grow.
Have separate investment account
Keeping business and personal expenses
separate is a must when making investments. Any money you spend on valid
business-related should be deducted from the business income. The more
deductions you have, the less you will be in debt. It is wise to have a
separate business bank account as well as putting an accounting system
in place to track your expenses.
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