Investing Tips For Beginners
Knowing how to invest money is very important. Often, people rush to invest their money so as to reap more but end up losing a great deal of their investment. Below are a few tips to help you invest your money wisely.
Seek professional advice
It is always wise to seek advice from a professional before investing money anywhere that looks appealing. The professional can be any registered financial planner or financial advisor. This person will be able to guide you through the steps of investment and advise on where to profitably invest. It is without a doubt that you will be charged by the professional, but in the long run, you will reap much more, and the percentage given to the advisor will not matter.
Individual stocks are to be avoided
Individual stocks may seem very appealing, but they involve high risks of losing out on all investments made. Investing in individual stocks, in other words, means placing all your trust on one single company. What happens if the company suddenly declares bankruptcy? It would therefore be wise to avoid doing so.
Whether you're planning on upgrading your office or investing in a new car, it's important to stick to a budget. Having a set-price list for various areas of your life ensures you don't spend more than you can afford. It's a long slippery slope when you start over-paying for things you can do without. For example, I just setup my new work from home office and during the winter months, it can get very cold. But instead of investing in a brand new radiator or insulating the walls, I invested in a nice wool blanket, a portable heater and some winter clothing. This stays within my budget and I have solved a problem too.
Percentage to be invested from your income
Investing a very small percentage of your income might not be as profitable as you would want and investing a percent that is too big would mean that you are opening yourself to higher risks of losing out. Therefore, it is very important to decide on a profitable and convenient percentage of your income to invest. For example, anywhere between 10%-20% would be suitable.
Patience is everything
People normally want to get their profits as soon as possible, but in order to get the most profits possible, patience is the key. At the beginning of investment, prices will tend to fluctuate a lot, but as time goes by, there will be a tendency for the value to only increase. People should always remember to choose long term investments as investing properly and in the most profitable way takes time.
As mentioned above, it takes long years to reap huge profits. It would therefore be wise to start at an early age. The desirable time to start investing would probably once you have found a secure and stable job, once you have paid off all your debts and loans and once you are financially stable. The sooner you start, the easier it will be for you to accumulate an outstanding amount of profit.
Make use of automation
Procrastination is not desirable when it comes to investment. It is also in the human nature to feel lazy and not feel like doing any important tasks. This is where automation comes in handy. Automatic deductions from your income to your investment accounts will be your greatest relief in times where you will feel like doing nothing. You are only required to set the necessary amount to be transferred and identify the accounts to which you want to transfer your funds to. Then you can sit back and let the investment happen by itself.