Daily Bulletin

Business Mentor

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  • Written by NewsServices.com

Deciding you want to invest some of your hard-earned money is an exciting but, at times, overwhelming process. With so many options out there, it can feel like you need to be a financial expert in order to make any money.

In reality, anyone can make money from investing. There are some key things to consider, however, before investing.

  1. Have a plan

It may sound obvious, but effective financial planning is vital if you want to make money from investing. Having a plan will prevent you from making hasty or emotional decisions - you could even get in touch with a financial planner for more information to aid your decision making.

An investment plan means deciding how much you want to invest, what your investment goals are, and how and when you want to achieve these goals. The rest of the steps in this article will all contribute to putting together a great investment plan.

  1. Consider where you want to invest

There are lots of investment options out there - cash, property, shares, and many more. If you’re unfamiliar with the different types of investments, make use of a guide and educate yourself.

You should also figure out whether you will split your money across multiple assets or focus on just one. The advantage of investing in different assets means that if one doesn’t perform well, you won’t lose as much money. On the other hand, investing in multiple assets requires a lot more maintenance.

  1. Decide on your timeframe and risk

Figuring out how much time you are willing to take in order to meet your investment goals is very important. If you’re happy letting an investment slowly tick up, you could go for a riskier investment since it won’t matter if the market takes a downturn for a short period.

Risk is also important to consider. It’s vital to know how much risk you are willing to take. Timeframe plays a part here too. If you will need to access this money easily and quickly, you probably won’t want to invest in a high-risk asset.

  1. Undertake a full audit of your finances

It’s not exciting, but undertaking a full audit of your finances is a must if you plan on investing. This will give you a clear view of your finances and help you decide how much money you can afford to invest.

When investing money, it’s important that this money is not your main savings or emergency fund. Even low-risk investments carry some risk and they may not be easy to access in an emergency. A financial audit will help you be realistic when making an investment.

  1. Get the right guidance

If you want to invest your money, sound professional advice is worth its weight in gold. If you’re just getting started in investing, speaking with a financial advisor early on will help you find your feet.

This isn’t to say you will need a financial advisor forever. Once you get to grips with investing, you may find you can make decisions on your own. But some expert input from the outset, whether you follow it or not, is always helpful.

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