Got some extra money lying around? Want to make it work for you and generate more money? Then you really should consider investing it. Although never straightforward, with some sound research, good advice, and careful planning, investing money can pay serious dividends and could revolutionise your life.
Consider the following four tips to enhance your prospects.
Tip 1 – Ensure your finances are in the correct condition
The no.1 rule of prudent investment is this: don’t do it unless you your finances are in good shape. Firstly, ensure you pay off any outstanding loans or credit card debts you have before you consider investing: earning interest doesn’t make sense if you’re paying it at the same time.
Secondly, ask yourself: do I have a financial safety net? What would happen if the worst occurred and I lost my job or my home, and all my extra money was tied up in investments? Make sure you set aside a pot of money in a savings account that will see you through if, for some unforeseen reason, you encounter tough times.
Tip 2 – Consider your Financial aims, and Invest accordingly
The best way to gauge what type of investment is right for you is to think about your aims and expectations. If you’re looking to earn some extra savings money for retirement, a future down payment on a property, or any other solid long-term ambition, you ought to look for a low-risk, but perhaps potentially less-lucrative investment. In this case, you might consider established, safe stock, bonds, or a high-interest savings account.
On the other hand, if you’re willing to enter into some slightly more high-risk ventures to see where they take you, or if you’re considering a ‘career’ in investment, you ought to consider investing in low-price but high-potential stock, or perhaps developing a property portfolio.
Tip 3 – Get advice and do Research
Getting advice on investment is a must, especially if you’re a novice or investing large amounts. If you’re serious, considering employing a financial planner might be wise. Although they are costly, they can still be cost-effective as, if they are good at what they do, they will be able to make you some serious money. If you feel you can do it alone, or don’t intend to invest too heavily, you still shouldn’t simply plunge in head first: do some careful research into your potential investments, and obtain free advice wherever you can.
Tip 4 – Thing Big–Picture and long-term when Investing
Attempting to make a quick buck is often a sure fire way to losing one quickly, as Mike Pursey at www.michaelpursey.co.uk, an internet businessman points out: “The most successful investors are frequently the most patient – those who are willing to sit-back and wait until they are absolutely sure they have either found the right investment, or identified the correct time to cash out at a profit.”
Assessing investment opportunities is about thinking long-term and appraising the big picture. You must consider factors as large as the general direction of a nation’s economy, and the potential future impact of technological and methodological innovations on society.
In order to do this, you must make sure your finger remains on the pulse of global social, political, and economic affairs, so make sure you’re reading the papers!
Wendy Lin is a successful entrepreneur and freelance writer. She also sells original watercolour art and enjoys sailing with her family.