Investing can be exciting, rewarding, and can lead to financial independence but investing is also risky and you need to know what you’re doing. Here are five tips to keep in mind before you begin to invest your money.
Have a Strategy that Aligns with Your Goals
You first need to set goals that you want to accomplish by investing. After you have thought about your goals you need a strategy to execute those goals. By having a strategy in mind to accomplish your investing goals you won’t be jumping into the markets blind.
Get Your Finances in Order
If your personal finances are all out of whack there’s a good chance your investments will be also. Be sure to pay off any high-interest debt, such as credit card debt before your stick money into investments.
Be on Your Guard
It’s always a good idea to question any investment advice you receive from others, such as friends, media sources, analyst, and even financial advisors. I say this because everyone is human, and humans make mistakes and even lie.
Some financial advisors get paid commissions for putting you into certain investment vehicles, and many times they’re more concerned about receiving a commission than what is in your best interest.
Stick to Funds and Indexes
Unless you’re a professional investor and are good at valuing individual stocks and finding their intrinsic value, it may be in your best interest to stick with funds and indexes. Many individuals hear about a hot stock they should buy up from an analyst or media source, and end up buying the stock at an over inflated price, this is a mistake!
Household Investors are happy during bull markets but as soon as the market takes a turn for the worst they think it’s the end of the world and sell. Don’t Sell! Instead of selling off your shares when the market goes down and selling at a loss, buy additional shares.
When the market is down or in bear mode there is an opportunity to buy shares because those shares are usually selling at a discounted price. When everyone else begins to panic and sell their stock shares, that’s when you have an opportunity to buy stock and get good deals.
Author: Tyler DeBroux
Tyler started Oddball Wealth towards the end of 2014 after graduating college, as a way to stay relevant in his area of study, stimulate his mind, and to educate and help others.
Tyler has worked in the financial services industry, as a financial advisor, helping his clients make wise financial decisions and personalized long-term financial plans. Since graduating college in December of 2014, Tyler has paid off more than $15,000 in student loan debt and counting, his goal is to have all his student loans paid in full by the in of 2016.
Tyler is an entrepreneur and an expert in personal finance. Two of his many hobbies include investing and building online businesses. He is also a big advocate of early retirement and an aggressive saver, who utilizes any financial resources and tools available to him to help reach his goals for achieving financial independents.