Start investing with these rules!

Start investing with these rules!

Starting to invest can seem like a leap of faith for beginners. However, you can get the most basic doubts clear on time to start investing! Plus, learn everything about the Golden Rules of Investment!

5 Basic Investment Questions Answered

1. Why?

Investing is all about generating a profit and increasing your savings. If you choose to do it correctly, you can save enough money for your future plans, which can include buying a house, a car, or simply growing your retirement funds.

2. When?

Since you're planning in advance, it's best to start investing ASAP. Whatever your goals are, you'll need less monthly investments the sooner you start making them. The power of compounding is big and you should try to keep it on your side.

All in all, waiting to invest for any possible reason is essentially costing you money. You're losing all profits you could've gained if you'd already started investing! This is why you shouldn't postpone it, no matter how distant into the future your goals seem to be. Here are some tips to invest during the Coronavirus pandemic.

3. What?

The issue of what investments to make is much more complicated because there are many different factors to take into account. These may indicate a company's growth potential to some people, but others prefer to take other variables into consideration before deciding what to invest in. It's a personal choice, which you'll be able to make once you're informed of what can affect a company's growth and decline.

4. How much?

As said before, the sooner you start to invest, the less you'll have to pay each month to meet your expected goals. There are also many calculators that'll help you know how much you should invest at the beginning and its results, taking into account many changeable variables.

5. What for?

Before investing you'll need to know what to expect in order to see if you're ready to face it. It won't be an easy and smooth trip, but you can take some measures to pretty much guarantee your success. It's important to stay through the good and the bad years of the market because you'll have more chances to receive positive returns the longer you stay invested.

5 Golden Rules of Investment 

There is a myriad of investment products and getting to know each one is a full-time job, let alone understanding how they work. But you don’t need to be a financial expert to start investing your money. There are rules that will help you get the basics of investing and if you follow them, you are likely to avoid major investment mistakes: 

1. Know your starting point

Whenever you are making plans, you first need to know where you are at in order to determine which steps to follow. Investing is no exception. Know your net worth and determine your goal. This will allow you to create a long-term plan to get there. Take regular measurements of your financial situation to monitor the process and adjust your plan, if necessary.

2. Don’t invest in a financial product you don’t understand

You don’t need to know it all to start investing, but a good practice is to stay away from products or industries that you don’t fully understand. Think of this way: if you are unclear about the overall performance and behavior of a particular product, you have no way of knowing when to sell, for example.

3. Don’t forget about your investments

And we mean it. Usually, most investments require monitoring and follow-up. Market fluctuates and conditions can change rapidly, so make sure you check your investments regularly to make the necessary adjustments. Stay on top of your portfolio!

4. Consider inflation

If you really want to know the real value of an investment, you don’t need to just look at the price and the performance. You need to go a bit further and consider inflation as well. Investment is looking towards the future, and that’s where inflation can take a toll on your money. It is important that you consider this factor when planning.

5. Add insurance

Bad things can happen and emergencies can have a huge impact on your finances. Whether it is a medical emergency or a huge storm, you need to have insurance coverage to respond in case something should happen.

These 5 rules should define your investing behavior. Make sure to keep them in mind whenever you invest your money and you will manage to develop consistent and strong financial habits.

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