If you are reading this article, the chances are that you have been contemplating getting into an investment but not sure if you are fit for it.
There is no precise answer as to when you should start investing. The right time depends on your finances, how you intend to use the money, and whether you have found the perfect investment opportunity.
The word ‘investment’ instills fear in many individuals, thus making them feel inferior or like they are not good enough to invest. The reason is the stereotypical image of investors as men lined up at a bank, well suited-up and monitoring thousands of dollar exchanges.
In reality, you can start investing with the least amount and make significant returns from it, provided you have a strategy in place. Even if you only have a few dollars in your savings, your money will grow with time.
The trick is to develop good habits and do away with an unhealthy lifestyle. For instance, it’s time to forget about the takeout lunches and opt for homemade food. Or, it’s time to give up on the weekly parties and start going once or twice a month.
How Do You Start Investing?
Here are tips to help you reach your investment goals.
Understand How Investment Works
If you are getting into investment for the first time, it is crucial to understand the concept and how it works.
Do not rush into an investment just because a friend or colleague recommended an investment plan to you. By taking your time to understand the requirements and what to expect after putting your money into the plan, you will avoid mistakes and future regrets.
Luckily, there are hundreds of resources online with detailed information about investments. You can read articles or watch videos on the same to help you make informed decisions.
Establish How Much You Wish to Invest
The amount you are willing to invest depends on your financial status and investment goals.
Most investors are after having an easy time after retirement. If that is the case, you should determine how much you anticipate to have when that time comes, then consider the remaining period to establish how much to invest.
Do not beat yourself up due to the pressure from your friends or colleagues. Invest what you can comfortably afford. Do not strain yourself to the extent of going without food so that you can put all your income into investment.
Just like saving, you should only take a portion of your total weekly or monthly income and ensure that you can still pay bills and not pull in your belt too much.
Understand the Available Investment Options
Before opening an investment account, you should decide which investment option is right for you. Conduct in-depth research to understand each investment’s pros and cons to help you make a sound decision.
Some of the common options include:
This is where you get a share of ownership in a particular organization. Also known as equities, stocks are sold per-share price. It is up to you to decide how many shares you wish to get based on your investment amount.
Again, ETFs are sold per-share price. The price is always slightly lower than the minimum investment amount. Hence, it is a great investment option when you want to start with a small budget.
Ideally, you offer loans to companies or government entities. The organizations will then agree to repay you in a particular number of years, but you will be enjoying interests before that time comes. Weigh the upsides and downsides of each of these investments, then select one that fits your financial needs.
Look For a Financial Planner
The best decision you could make as a first-time investor is to seek a financial planner’s assistance.
It would help if you had an expert’s perspective to help you make informed decisions. Experts understand the different investment plans better than you do.
They can quickly evaluate the market to establish if you are likely to make losses or profits. The specialist will advise you on the ideal amount to invest after reviewing your financial status, not to forget that they will weigh each investment product’s risks before suggesting the safest.
Take your time to select an investment firm or financial planner that you can fully trust. They should be willing to answer any lingering questions you may have regarding different types of investments and also help you develop an effective plan.
You can find the best one by asking for recommendations from your bank, friends, or colleagues.
Moreover, check reviews on the providers’ sites to confirm their reputation. If you find more positive reviews than negative ones, then you can trust them with your finances, and vice versa.
Make sure the investment firm is certified and has been in the market long enough. Their customer service should also be a significant point of concern when determining if they are worth your trust.
The trick to becoming a successful investor is to start now instead of putting it off till the perfect moment that will never come. Do not wait until you have millions of dollars to spare some for investment. The little you have today can go a long way, provided you have an efficient plan.
With these tips, you have no excuse for not starting your investment journey and chasing your dreams. Do not let fear stop you from doing what you have always wanted for the longest time. Take a leap of faith and watch your money work for you.
Terng Shing is the Founder and CEO of SYNC PR, a PR and content marketing startup that uses technology to reduce time wasting and administrative tasks in delivering results. Based in Singapore, Terng Shing has been focused on helping startups and SMEs build their brand story through media and… View full profile ›