Investing correctly isn’t everyone’s ballgame. In this post we’re going to analyze the top mistakes people make with investing and how you can not fall trap into those.
Get a financial plan
When you take an investment decision, it’s important to first have a better look at the financial situation first. If you’ve never made a plan before this is the time to really sit things out and decide what you want.
Figure out what your goals are and what your tolerance for risk is. You can take the help of a professional for this. There’s zero way to say if you’re going to make money off investments and savings. The only thing you can do is plan and see how things work out.
What’s your comfort zone?
When considering an investment it’s always ideal to think about the level of risk you’re willing to bear.
When you buy mutual funds or bonds, understand what you’re spending your money on first before launching into a scheme. Otherwise you stand to lose everything.
None of the money you invest in stock markets is fully secured and that means you can lose all amounts invested along with profits gained. That’s to say even if you’re investing through a bank there’s no safety net
The rewards? You get a much better and bigger investment return on your principal. If you think of the long term the money keeps growing.
Consider an appropriate mix of investments.
INclude different types of assets in your portfolio.
This means the investor can protect their money through stocks, bonds and cash.
These all things don’t really collapse all at the same. This is the classic way of diversifying your eggs in several baskets so that the market conditions don’t really determine what you win or lose.
Don’t listen to expert advice on social media
For better or worse, social media has changed our lives and that means we’re generally surrounded by a constant barrage of advice and stock tips that come from amateurs masquerading as experts.
That’s not really the way to follow or ask for advice.
Since it’s your money you’re playing with, there’s always the chance that you’re going to lift your guard and become careless.
Have six month’s worth of expenses saved up
An emergency fund has become one of the most coveted dreams for many people today in times of Covid. Faced with sudden unemployment and high healthcare bills most are looking at high credit card debts to service the costs of their daily life. It’s been a rainy few months with most of us caught unawares and in a debt cycle that refuses to go away.
Throw away high interest credit cards
They’re eating into your money.
No investment strategy works as well as paying off credit card debt on time.
You might be carrying a lot of due payment on credit cards that tend to charge a big interest. Either transfer the amount to another low fee card or pay off those debts by taking another job. If you do a quick search you will be able to find several low interest credit cards to use.
What do you think of our tips and tricks?
Also read: money management planing to avoid mistakes during lockdown
