Just thinking about the possibility of investing even in small amounts, this step shows the awareness of the owner. Unfortunately, most people believe that investing is a complex process. Contrary to popular belief, investing money is not just for the rich.
But while investing money smartly is not easy, everyone can invest their money if they are patient and acquire the right knowledge and skills.
A)The concept of investment.
Investing is one of the best ways to build wealth and financial independence. The concept of investment generally is to take money (capital) and try to develop it by buying assets that you expect will increase over time. There are multiple types of investment and diversified according to the objective, the means, the return and the risk.
The goal of investment is to achieve financial freedom. The sooner you start investing, the more your investments will increase and the returns will start to increase, so that your salary or your monthly income will rise, and you will start to concentrate on managing these assets.
B) Qualifying the ordinary person to become an investor
Most people spend most of their lives working for pay, and forget that by saving and investing in a portion of their income they will increase their ability to meet their future expenses, such as buying a home, saving the cost of educating children, providing enough to meet the demands of life, The standard of living that one habitually enjoys after retirement and ceasing to work.
The vast majority learn how to master a certain skill for working for money, but in return, they do not learn how to make money work for them too. The following are steps that will qualify the average person to become an investor:
1. Investment is the branch .. Saving is the origin
Saving is the gateway to investment and wealth. Investment is the branch .. Saving is the origin, so you have to save first to be able to enter the world of financial freedom. “Save what is left after the exchange, but spend the rest after saving,” this famous advice Laurent Buffett summarizes a lot about saving. (Months Warren Buffett investment tips)
For those with high incomes, try to save between 15% and 20% of your income so that you can achieve the rule of doubling ownership every 5 years, which is one of the most important rules of financial intelligence and investment, where doubling your property every 5 years, which is an important investment goal.
For those with intermediate incomes, it is preferred to be 10%. Those with low incomes prefer to find additional sources of income or evening work so that they can save and improve the current living conditions. Saving here is between 5-10% of the monthly income.
2. List the investment objectives and requirements.
The first step to planning your financial goals is to organize them according to specific time frames, ie short-, medium- and long-term goals.
Whether you want to buy a car, invest in real estate/gold or save for marriage, whatever your financial goals, you can start to achieve it by clearly identifying and categorizing them within specific time frames.
You must know what are the terms and requirements of any investment before proceeding. For example, retirement investment, emergency or insurance, or the benefits of tax savings. If you know exactly what you’re looking for, you’ll get a clear picture of how much you should invest and where you should invest.
3. Set up an emergency amount.
If you do not have an account of this kind, it is a good idea to focus your efforts on providing a living cost of 3 to 6 months in a so-called emergency fund. The funds of this account are very important and must be available at any time, savings that you do not invest.
Do not use all of your extra income in investment operations, as long as you do not have a physical cover in case of an emergency; it may happen that the table turns on you and lose your job God forbid or investment markets are vulnerable to a violent shock or sudden illness. Failure to prepare for such possibilities is a lack of responsibility.
You should be interested in feeding this account. You can divide your excess income each month, transfer part of it to the emergency account, and the other part of your investment operations.
4. Avoid excessive spending.
Spending money on recreational items is common when a person is in his early twenties. In this period, when he works and earns a financial income, he has the power to spend money freely, and of course, in the absence of life experiences and experiences, there are consequences.
It’s okay to enjoy the money you’ve earned with your effort, but you do not have to spend it unnecessarily or impulsively.
Merely making a decision to save a fortune and invest it in a good plan is a better decision than irrational consumer spending. Sporadic spending leads to remorse later, while a good saving decision results in a sense of psychological peace and satisfaction.
5. Do not get involved in debt.
The most important part of financial planning is non-leveraging. If you have any kind of debt, do your best to repay your debts as soon as possible.
Debt is the biggest obstacle to saving plans because it holds up most of your money. Avoid getting a credit card unless absolutely necessary, because one pays interest and huge sums without realizing it.
6. Do not invest without knowledge.
Do not invest your money in things you do not understand at all, because not having the correct and complete information can lead to incorrect investment decisions, and therefore you will lose part or all of your head instead of making the gains you want.
If you do not know which options are best for you and your investment goals? Refer to a financial advisor who guides you to best investment practices. He knows market trends, investment strategies.
The advisor will help you know the best investment plans that are appropriate for your requirements, and how to diversify your investment options as well.
7. Invest at least 15% of your income.
Plan to invest about 15% of your income, this money will accumulate over the years and give you a huge return on investment.
The best you can do is apply an automatic deduction from your salary that is automatically directed to your investment plans or to a separate savings account to build capital that you can invest later.
If you do not make this process automatic and without interference from you, you will be subject to delay and procrastination. All you need is to adjust the actions required to automate things.
Whether the funds you want to invest are small or large, the goal is one: to make these funds grow and get additional funds. The investment methods of salary that help you grow your money vary greatly depending on the method and method of investment, the amount of money and the time frame of this investment and therefore you must invest according to your personal requirements and your ability to invest.
There are stories about people who become rich by investing in stock trading in the evening after they return from work, but they are very rare stories (9 investments can achieve one million dollars in a year).
One can actually achieve financial freedom if he follows a “good investment strategy”. Here’s a list of 13 ways to invest, try and choose what works best for you:
List of 13 ways to invest, try and choose from them.
1. Invest in stocks
Investing small amounts in stocks constantly is like a snowball that you see roll over and grow in front of you over time. True, earnings are unpredictable in the near term, but they are often profitable in the long term. We are talking about long-term investment, not speculation.
Do not invest your money in just one company, but invest in several companies always, putting all your money in one company may lead to a loss. Also, not only invest all your money in the stock market but distribute your money in various investment plans.
Investing in financial markets (stocks, funds, bonds, bonds) generally suits you if your income is not high. Try to invest even a small portion of it in small investments at least initially. Although it is not possible to obtain a large return on small-scale investment in the short term, it may be profitable in the long term.
2. Investment in bonds
Bonds are interest certificates issued by government institutions such as central banks without risk. Governments have mechanisms for printing money and can print the amounts they need to pay back capital, making these investments relatively safe and making them a great way to diversify their investments.
Preferred by many who wish to earn a regular income.
3. Try investment funds
Is a set of financial funds that contain stocks and bonds that investors buy their contents, and then work to invest in accordance with their own areas, and may be sold later at a price higher than the purchase price, and so the concept of investment is applied correctly, Conversion of the value of bonds and small shares to a large value, if the owner does not want to sell at a price higher than the price of their purchase.
5. Invest in tax-free funds.
There are many investment plans or options with tax incentives. You may find, for example, tax-exempt savings accounts (maybe retirement savings schemes or savings plans …), a way to invest your money and earn tax-free income.
There are different types of tax savings available, so you should go back to a financial advisor to guide you to the best type that is right for you. Find the right plan for you and invest in it. This will save you a lot of tax money and add to your savings.
6. Invest in retirement plans.
An individual can not work for the rest of his life. When he grows older, his abilities will decrease and his productivity will decrease. Thinking about retirement is very important and one must start working on his retirement plan as early as possible.
Retirement investment plans should be a top priority for your investment list but should be ranked first and followed by other investment plans.
You should continue to analyze your retirement goals and investments, and as your salary increases over time, increase the funds you invest in your retirement plan.
7. Invest your money in a project
By starting your own project, productive, commercial, or service-oriented, it is possible to start from the things that you have volunteered to do, and of course, take advantage of the skills you have acquired during your career and career. Or turn your hobby into a project.
If you are interested in fishing, open a shop for its tools. If you read a book and love to write a book about your love for sweets to love for making sweets … employ your art to serve your business. The giant works are where art, science, and hobby mate.
8. Increase the scope of your investment plans.
Distribute your money in a variety of plans and not only adhere to one form of investment.
Diversification of your investments means putting part of the stock market investment, for example, in bonds, part of it in cash (to be at your fingertips when you have opportunities to buy income-generating assets), and investing in something like real estate. Diversification reduces the volatility of your investment portfolio and risk.
Expanding your investment will help you earn money from a variety of sources of income and keep you away from real financial trouble if an unexpected crisis strikes one of your investments.
8. Consider getting a share of ownership in a business.
When you invest in a business, you create or buy part of a production system that hopes you will earn a net profit from selling the product or service to the consumer at a price greater than the cost.
There are many ways to invest your money in a business: Create your own company, enter a partner in an existing project, buy another person’s stake in a private company or partnership, or buy a stake in a public company.
Historically speaking, having a successful business has been the biggest source of wealth among self-employed men and women, outperforming properties that represent the second most important category of assets.
9. Investing in real estate is a good investment.
After making small investments here and there, when you start reaping the fruits of your first investment you can decide later to invest in real estate. It is a traditional investment pattern, but it remains the most popular investment option.
If you buy a land or a house you will make a profit because the price of the property will increase after a period of time. The likelihood of real estate prices rising is generally low. Property is sick and does not die, so this is a long-term investment.
The gains are realized either by reselling or renting the property, which is different and requires a different approach in choosing the property and dealing with the process, so it is important to decide which one you want to follow from the start.
10. Invest what is more money.
The best investment is what you spend to develop yourself. This is the only investment that no one can take away from you. Recent studies confirm that what you invest in yourself must change some aspects of your life for the better.
You do not have to be an expert in everything but you have to know very well what are the limits of your circle of knowledge and what is outside and what is in the circle of your goals you must learn. You need to know well what your strengths are and what your weaknesses are, which are the most important things you should know now.
11. Beware of attractive investment ads.
There are many advertisements that depict you investing an easy and quick process and try to attract customers and sometimes “victims” using tempting methods. Avoid entering into any investment plan by simply viewing an ad, avoiding fraudulent schemes that are tempting to make a fortune quickly.
Avoiding unsuspecting commercial adventures such as speculating in the currency market and investing in companies that promise to distribute obscene profits all eat your money as you eat wildfire. Stay away from people who promise you unrealistic returns.
12. Invest patiently
Keep in mind that investments need patience, you will not generate revenue in a few days; it takes months and years to achieve a good return on your investment.
Check your investment every three months instead of checking it daily to give it a chance to grow. Continuous monitoring can cause undue pressure. The market may not be in a good position at times and the value of the investment may seem low, but over time, the invested amount will make a big profit.
Hence, consider the long-term yield and invest accordingly.
13. The poor
The world’s wealthy who have achieved their own successes, such as Warren Buffett, Bill Gates and Mark Zuckerberg, are advised to donate a percentage of income, whether it is a salary or a gain from a charity business, and to help others.
Giving a part of your income gives a clear signal to the unconscious mind that you have enough and above it, and when you stick to that belief, it will become a reality.
The most important thing to do if you have not started investing yet is to start paying off any debts now. Quickly build your emergency account and then start thinking about the investment options that fit your financial ability and suit your financial goals.