Investing is challenging, it can be scary, disheartening, and confusing.
However, it doesn't have to be. With proper education and experience almost anything can become easy, fun, and perhaps most important, profitable. So how can you succeed where so many others fail?
Start by using the investing hacks below.
#1 Never Fall In Love.
This is an extremely important and overlooked aspect of investing. People always say, yeah yeah I know, I need to diversify and keep my money separate. Well, I can almost guarantee all of your major losses have, or will come from falling in love with an asset.
Whether it's the latest penny stock, or currency pair, you will become attached to the asset, and continue to buy, or sell, even if you are at a major loss. The investment almost never works out. You end up with nothing or close to it and could have spread the money out in much safer and profitable places.
You should have different industries covered, with different investment vehicles to minimize risk. This way you can bounce back, even if one of them goes bad. Don't leave yourself open to unnecessary risk and heartache.
#2 Compound Interest
Compound interest is the greatest financial tool you have. More powerful than any indicator, strategy, or pattern. It's the difference in making a living and making a fortune. However, for compound interest to work, you need to take action now.
It doesn't work for the people that say, "I'll get to it when I have the time". If you don't take action now, you likely never will. That is something you will regret in your future. Do yourself a favor and start taking the necessary steps to start growing your wealth, all you need to do is take action. Chances are you have money sitting in a savings account collecting dust. The real question is , why?
#3 ETF's and Funds
ETF's are an incredible opportunity. More and more pop up every week but if you can find the best ones that align with your financial goals, it may lead to great fortunes in the future. We are on the ground floor right now, and it appears the only place to go is up.
If you do your research, and find a few ETFs that you can hold forever, chances are that they will provide a nice cushion for your retirement and family. Don't just take my word for it. Check out some of the popular ETFs out there and you will see there charts are slowly but steady. When it comes to investing steady is what we are about, it doesn't matter how slow it is, the time will pass anyway.
#4 Don't Carry Debt.
This seems pretty obvious, but I need to mention it because so many people continue to come to learn how to trade or invest with tens of thousands of dollars in debt. It's insanity. By having lots of debt and trying to invest you are basically running in place. Any money that you can gain through the compound effect on your investments, will be cancelled out by the interest you pay on your debt.
If you can, focus on your debts first, before you get involved with investing you will be much better off. You will be less stressed and won't be relying on that next big stock pick to put food on the table. The first step to financial freedom is getting rid of your debt. If you don't, your efforts to make money by trading, investing, or whatever else will have been for nothing and virtually washed out.
#5 Review Your Investments.
It is vital to always check up on, and review your investments. An asset may look good today, but there is no guarantee that it will in a year from now. Go over your investments often, and make sure that the reasons you got involved is still valid, or if it was really even a good investment from the start. Once again falling in love with a stock can end up biting you in the end.
You're here to make money, not buy things because you like them. Whether you like it or not, you must take this seriously, and understand that if you need to cut a loss, then you need to do it. At the very least, every few months you should review your long term investments to make sure you are still on track.
- Educate yourself.
- Make a habit of saving and investing. if you can, automate the process.
- Buying Bonds is an extremely good way to get started in the investing world, it is safe, and can give you a very nice introduction into the idea of buying and holding, not touching the money.
- Individual stocks is not always the best investing option, usually buying a basket of stocks or assets in an etf, fund, or index is a much less risky and balanced investment.
- Setting up a separate saving account to put money away for investing can help you take a proactive step into saving. If you can set up direct deposit for 10% of your income you will have a nice egg to invest after a few months.
- Don't check up on your long term investments, there is no reason to worry about something being up or down today when we now 20 years from now it will be way up.
- Don't wait to long. It's okay if your not ready to get started with your investments today, but you need to atleast start making a plan today about how you will secure your financial future. You owe yourself at least that.
I hope you've enjoyed these little investing hacks.