Wednesday, February 10, 2016, AM | Leave Comment
It is never too early to start investing for the future. Anyone with spare cash, regardless of how little knowledge or experience they possess, can watch their money grow over a period of time after making some wise investment choices.
The key to success in investing, is to get started correctly.
Follow these pieces of advice to discover what beginner investors need know about investing their own money.
Establish Goals and Long-Term Plans
Money management is the bulwark of a long-term financial plan. To be good at it, you need to set long-term and concrete goals that are meaningful to you.
Your goals should reflect why investing is important to you. These could include building up a college fund, buying a house, starting a business, or funding your retirement.
Establish Your Personal Level of Risk Tolerance
First-time investors frequently struggle with the concept of risk.
Professional financial consultants are famous for reminding clients that risk and reward go hand-in-hand.
However true this axiom may be, it’s wholly insufficient for the early-stage investor who needs more meaningful information related to risk.
The one important aspect you need to know from the start is, the sooner you need to get your money back, the less risk you should assume.
Every investor needs to decide for themselves what level of risk they are comfortable with before they make their first investment.
Consumer Credit: Good or Bad?
In the absence of specific facts, it is impossible to determine for sure if the use of credit is a good or a bad thing.
Clearly, if consumer debt is used to support a certain lifestyle, and such spending makes it difficult or impossible for the consumer to save and invest for the future, then the use of credit may not be a wise or desirable choice.
Folks who go overboard with consumer debt may encounter difficulties repaying it and getting a good standing in their credit.
The Two Faces of Debt
Not all debt is bad. The beginner investor who uses debt to purchase some kind of valuable asset (such as shares of stock or real estate) that is likely to grow in value, can be considered wise for doing so.
Professional financial consultants believe that taking on debt that can easily be cancelled by selling off the asset purchased with the borrowed funds should not be considered bad debt.
Debt is a reality of modern life and will always be with us as long as people use borrowed money to achieve their financial objectives. This can be a double-edged sword since what we choose to do with borrowed funds tells us more about the nature of debt than anything else.
Getting to a place where you can’t repay it, or are thinking about bankruptcy can be scary.
K. Hunter Goff, an Orlando Bankruptcy Attorney, says anything from uncontrollable credit card debt, medical bills, repossessions, and foreclosures can lead people to think bankruptcy is the only option.
Luckily, when you know the type of debt you have, you can use it to your advantage.
This article about investing for beginners can help anyone with the desire learn get launched on the right foot.
The very first step in the matter is learning why an early start is so important. Strategic investing is more effective when investors think long-term.
By allowing themselves adequate time to withstand the ups and downs of volatile markets and economic cycles, shrewd investors can safely and steadily build wealth across time.Facebook.com/doable.finance