How many people have you met who speak “wanted to start investing, but I have neither money nor time ? Many! Nevertheless, every now and then whenever we find a way to buy a new phone, plus a pair of shoes, a new TV and so on .. “I really wanted to ..”, “I have no time ..”, “I have no money ..” are the excuses that speak more to justify why not take good care of our own money.
We know deep down that we can do so much for taking good care of our money, but in reality what we lack is the discipline to do it. Fortunately, this problem is easy to fix and all you need is a little commitment to yourself.
Here are 5 tips on how to start investing now!
1. Understand the Different Types of Investment
Knowledge is power! For this it is important that you grasp the different types of investments in accordance with the risk that your money will run: conservative, moderate and risky. “Why would I invest in something risky?” This is a question that fits the answer yourself.
The more risky the investment, the greater the potential return it can give. Generally riskier investments should have a long-term perspective, since over long periods of time tend to overcome the profitability of the most conservative investments.
2. Choose a Broker
Many people invest based on the recommendation of the bank manager. Unfortunately bank managers receive commissions for each investment bank who can “sell” and therefore do not always do an adequate customer suggestion. To avoid falling into these traps, it’s always good to have a second opinion.
The Stockbrokers are institutions devoted to investment and anyone can open a brokerage account in the same way that opens an account at a bank.
The vast majority of brokerage firms do not charge anything for opening accounts, and contrary to what many think, it is much cheaper to invest through a broker than a bank. After the account open you will have access to a range of investments and their new brokerage will help you choose which ones are most suitable for you.
3. Define Your Goals
To be able to do anything more important is having a reason is not it? Take a sheet of paper and a pen and start writing down all the things you want to conquer in life, after all that is what you will be investing!
First think about the horizon of one year, after that, start increasing to 5 years ahead and go until you reach your retirement. Do not worry about the size of your list or dreams, what you’re doing is establishing what really is most important to you.
4. Diversify Your Investments
Ever heard someone tell you to “do not put all your eggs in one basket”? Investment that is very important: always try to choose diversified investments and different from each other, so if one of them is not going so well, others will.
You should not put up all the money on the stock exchange for example, although there are years in which actions are good, there are also years when they go bad.
The same goes for leaving all the money sit in savings if you do not plan to use that money in the short term, invest in something riskier it is a good idea for the future that money grow more.
There is a basic rule of 25%, which is basically always have at least 25% of their money invested in riskier investments, since you do not need that money in the coming months.
5. Be True to Your Goals
After starting investing, it is normal for many people to get excited and forget what led them to invest in the first place. As much as their risky investments are giving much higher returns than more conservative, not tempted to put more than you should on these investments.
As I said, there are phases where things are going well and there are phases where things go wrong. Do not let these cycles get in the way your goals and what you determined in your investment strategy. In the long-term investor who does well is one that was true to their strategies.