Simple Tips For Investing Your Hard-Earned Money
Saving is not enough. If we want to be smart from a financial point of view, it is not enough to just save, but also to invest our money purposefully. Investing is no longer reserved for the elite, with the internet hitting scale, we can now make money work for us with a click and, in this way, our savings start creating wealth for ourselves over time. If you have never invested, you may have certain doubts or fears. This is normal for small savers: they fear losing their savings in a bad investment. However, this situation not only does not have to occur, but it is also unlikely if you follow these investment tips.
Saving is not enough. If we want to be smart from a financial point of view, it is not enough to just save, but also to invest our money purposefully. Investing is no longer reserved for the elite, with the internet hitting scale, we can now make money work for us with a click and, in this way, our savings start creating wealth for ourselves over time. If you have never invested, you may have certain doubts or fears. This is normal for small savers: they fear losing their savings in a bad investment. However, this situation not only does not have to occur, but it is also unlikely if you follow these investment tips.
Investors like Farah C. Jaber have talked about investing for quite a while. Farah has written a book entitled “Becoming an Investor: The First 100 Days” and hosts The New Investor Podcast to exactly tackle that subject for young and new investors
Farah is a hospitality management leader, author, investor and podcast host, he is the founder of Investors Media LLC, a company he based out of Delaware, United States designed to support young and new investors to start their journey to Financial Freedom. He holds a Master’s degree from Paris Graduate School of Management and a Bachelor’s degree from Glion Institute of Higher Education in Switzerland
If you aspire to start investing, here are some of his simple tips that will help you out.
Determine the time horizon of the investment.
It is essential that you know for how long you are ready to commit to your investment strategy. A short-term investment is not as effective, looking for a small return on your savings that you may soon need and cashing out will not place you on the path of Financial Freedom. However, making a commitment towards a long-term one with consistent and monthly injection into your capital for investment will certainly place you in a very good position to build wealth
Define your risk profile.
Financial advisors usually do questionnaires to define the risk profile of investors. There are investors who prefer safer returns with hardly any risk and there are those who choose to assume a higher risk to aim for higher returns. In any case, should you still be blessed with the most valuable commodity in investing: Time, such will significantly influence your risk profile, since in the long term, a greater risk can be assumed and the markets have always recovered stronger than ever over time.
Decide how much you want to invest.
The next step before investing is deciding how much you are ready to invest. It seems like a simple decision, but it is not at all. Keep in mind that the money invested, except in the unlikely event of the world economy melting overnight, will not be cashed out until you have build enough wealth to set you free. If you are thinking about investing for your retirement, then you must be ready to stay invested until then. The money invested must be forgotten, so it is important that you do the math well before deciding the ideal amount of wealth you are aiming at and engineer your investment strategy backwards
Do not invest in anything you do not understand.
It is not enough to listen and follow financial news and base your investment strategy or decision making on an investment on such a medium. Even if you may trust what is being said on these major news channels, you should read the fine prints by doing your own research and not invest in companies and sectors you are not passionate about or don’t understand.
Beware of investments that are “too good to be true.”
If an investment opportunity offers you a 15% return, be sure that it is a high-risk investment, it is imperative that your investment strategy avoids being based upon a “get rich fast” model. Building wealth over time can be achieved through investing into companies that are the pillars of economies, paying dividends and unlikely to disappear within the next decade.
Flee from fashion businesses and gurus.
Handle your money with caution and do not trust that trendy company that seems to devour the market or that financial guru who is on television all day giving investment advice. The idea, as explained in the previous point is to have a personal and methodical approach to your investing strategy focused on the long term.
Start investing as soon as possible.
This is the basic premise. It is not the same to invest 20,000 euros when you are 25 years old than when you are 40. Compound interest brings great long-term benefits, so you have to start investing as soon as possible since the profitability of your savings will be much higher over time the earlier you get into it.