1. Get to know how investing works
“Investing” is a term often confused with “saving”, but it is important to distinguish them. “Saving” means setting aside money which, although it does not increase in value, allows you to accumulate interest in your savings account. “Investing” means, on the other hand, buying assets such as stocks, shares, bonds with the intent of increasing their value, earning them on the occasion of a future sale. However, before you begin, it is wise to check your financial resources through the overview of your income, expenses, existing debts, savings and assets. Define an investment plan that matches your financial situation and goals.
2. Follow your investment plan
Let’s go into the specifics now: have we awakened your interest in stocks and convinced you about cryptocurrencies? Do you want to invest in risky assets that offer you greater earning potential or do you prefer to play it safe? Which strategy is best suited to your goals? Don’t forget to consider which companies and which sectors you want to support (for example those particularly committed to the environment or those who share your interest in technologies). Consider whether it is short-term or long-term investments that best suit your time horizon. If all of this scares you, consider Trending Themes, a low-risk option where many of the decisions are already made for you. Either way, once you’ve worked out the plan, stick with it!
3. Take calculated risks
Risk isn’t always a bad thing, but finding the right balance is what leads to the reward (as well as some potentially painful lessons learned from!). It is vital that you only take the risks you feel you can manage. Do research, research to learn all you can about planned investments so you don’t get caught in the financial grip.
4. Be honest with yourself
While we would all like to see ourselves as savvy investors with large portfolios, the truth may not be that exciting. The most important principle of investing is to recognize your limitations and those of your financial situation. You need to focus on actionable moves that help you achieve your goals and not sink into stress and debt.
5. Don’t put all your eggs in one basket
Diversify, because changes in the markets can happen overnight and don’t give you the time to react. Diversify your wallet and this will be useful to you while diving by giving you the time you need to make the right decision. Some methods, such as Trend Themes, consist of diversified portfolios and react intuitively to market fluctuations.
6. Keep calm
Bad days, bad investments and wanting to overdo it can negatively affect your investment strategy. Stick to your plan and resist the temptation to make hasty decisions.
7. Follow Warren Buffett’s two golden rules
Billionaire, businessman and philanthropist Warren Buffett is a champion in investing and valuing valuable stocks. It will take you a while to get to his level, but in the meantime he respects these two golden rules:
- Rule number 1: don’t lose money.
- Rule number 2: don’t forget rule number 1.
It is hoped that following all the previous 6 rules will lead to also respecting rule number 7, but the secret is to proceed gradually and consistently. Instead of the heart, listen to your financial intelligence, seek advice before making your next move, and you will see that your nest egg can undergo exponential growth. For more tips and recommendations check out YuhLearn and good investment!
