Five Things To Note Before Making An Investment
Well, making an investment like in the previous post is a sure way of increasing your income and creating a form of financial stability. Even as this is known, making an investment is not as easy as it seems or that we have been made to believe. From educating yourself on your preferred investment platform to readjusting your personal finance; we will be discussing a few things you could take note of before making an investment.
EDUCATE YOURSELF ON YOUR SPECIFIC INVESTMENT CHOICE
From stocks to mutual funds to bonds, getting educated on the type of investment you have chosen is very important. Know the history, the profits rate, the pioneers, percentage involved q, and so on. This will help you start with a proper mindset and prevent a shock due to unforeseen events.
KNOW YOUR NET WORTH
First of all, what is a net worth? A net worth is the sum of all that you own(salaries, homes, cars, etc) minus the sum total of all that you owe(mortgages, debt, loan acts) the result from this simple math, is your net worth. Being aware of this gives you an idea of what type of investment you should begin.
A CASH EMERGENCY FUND
This is a separate fund set aside for the sake of emergencies. Investments are unpredictable; so It may work out and it may not. So creating an emergency fund will help to guarantee financial safety if a set back should occur.
ELIMINATE YOUR WORST SPENDING HABITS
In order to start an investment, you need to first have the money for it. Unless you are a billionaire or are financially stable, saving up would be the next step to achieving this. Now the enemy of a healthy savings is a bad spending habit. Cutting down on unnecessary spending will help you save faster. To reflect on your spending habits today and cut down on unnecessary spending.
Kindly click here to read the previous post on how to reduce wasteful spending.
INVEST ONLY WHAT YOU CAN AFFORD TO LOSE
I have seen and heard cases of people making investments with money that they don’t own, or with an amount they can afford to lose. Investment is a pursuit that comes along with numerous risks, but the worst that can happen is making an investment that will render you penniless if it fails. It is always smart to keep an emergency fund, but it is smarter to invest what you can afford to lose. This way, the risk of being penniless if there is a failure is completely reduced if not prevented.