We have so much information in the world of investing today but beginners are overlooked, it is assumed they should know how to start investing as though they were born with this knowledge.
Maybe you are excited about the prospects of investments, but do not know the steps to take so as to minimize risks, this article is for you.
For you to get the most from the money you invested, consider going through this steps before investing into a venture.
1. Think long term
This is the first step. Every successful investor will tell you this. Many come into the investing world with the mindset of a gambler or play in the lottery, they want fast cash. Such people end up in the wrong hands and loose their hard earned cash. Investing consistently for a large period of time is proven to be the most reliable and best way to financial security. Time is a powerful and reliable asset you can depend on when it comes to investing and if you are not ready or willing you leave your money for at least 10 years you may need to reconsider your desire for investing.
2. Pay Off all your Debts
You should not consider at all investing if you are in debt. By paying off all your credit card balances alone you practically have a 18 – 22% return rate on your money. This simple reason that you would have paid that from your investment but you paid from your pocket. Keeping you safe.Other form of debts you must consider paying includes: financial aid, bank loans and car payments.
3. Be properly insured
Most investors do not even consider this at all but it is a huge mistake. Be properly insured before you get into the investment world. May have lost their whole investment because they were not insured.
The more money you make from your investments. The more insurance coverage you need. Investing your money without adequate insurance coverage is just like riding a motorcycle without a helmet.
4. Set up an emergency fund
You should have at least 6 months salary saved up in a liquid account like savings, checking or even money market. Save as much as you can for emergency situations like sickness, loss of job, a faulty car etc. you never know when an emergency will occur so it is better you prepare before hand for it.
Perhaps the greatest benefit of an emergency fund is that it presents you from withdrawing from your retirement accounts, which of cause prevents withdrawal penalties. These are the best tips how to start investing.