Many people are quick to mention that investing is not suited to their personality. This can become a very confusing statement as investing does not require any special talents or skills. It only requires one thing…
Obedience to follow the rules.
But what are the rules to follow? Well, the initial process is to identify what steps are required to become a good investor. I have made use of the following steps to stabilize my investment principles
Invest in paying off small-medium debt
This must be step one to ANY set of investment principles. Whether it is credit cards or clothing accounts or small loans, it must be settled. All interested weighted payments up to 25% of your annual income should be settled prior to entering any other forms of investments
The easiest way to make money through investing is by not spending it.
Start a savings planner
A savings planner should also amount to 25% of your monthly income. Ie. If you earn R 20,000 per month then you should be saving R 5,000 of that money.
This money should be allocated to savings at the beginning of every month so it is not spent. The following steps will be viable steps/ options to use your savings policy for.
Invest in your own skills development to further your income opportunities
The greatest investment is in yourself. You need to become the most valuable investment that produces the highest return on investment.
If you can further your skills development in your area of profession that will lead to furthering your financial earnings.
You need to ensure the skills you acquire will be relevant to your current work situation. It will be futile to study into new areas unless it is your intention to move into a new field of work.
Begin with long- term savings
The sorrowful line of pay now or pay later directly translates into the dilemma that most retirees are facing in the world.
Finding ways to invest money that can be turned to liquid cash when you retire is a corner-stone to investing. Retirement policies and unit trusts can be simple ways of storing money away for a rainy day however, this can yield lower returns that other forms of investments.
Other options like investments into property and assets that will appreciate in value over a 20 to 30-year plan.
Some investors will invest in precious items like canvas art, antiques and historic momentous like old bank notes, military rank badges and memorialized items from major historic events.
These options are usually original, one of a kind and of no value if altered or changed. This means that the investment has some level of security.
Jewelry is an example of an insecure investment. If the type of jewelry is no longer popular than most buyers will break the jewelry down and re-build it into newer forms of jewelry. This can reduce the value of your investments greatly.
And My next step is?
Well, now it is time to put it into practice. Do you have outstanding debt? Good, Pay it off. Do you have spare cash available to save? No? Good, find a way to cut down on expenses and earn more money so you CAN save more.
Why does it sound so easy yet sound so hard? Well, that is because it is a mindset. Anything is as easy as you want it to be.