This “ Things To Do Before You Invest “ post describes what you might want to do before you invest anywhere. These tips may or will help you avoid some financial and personal problems down the road.
In my book, Investing especially investing in the stock market is a must. I believe that long-term investing may or will help you achieve financial independence or a good cushion for retirement, emergency situations, among others.
But as I always say to the many people I come across with, investing is not for the faint of heart. It’s not something that you think and want to do it right away. You can make a lot of Money; you can lose a lot of it, or don’t make anything at all. Investing is partly gambling, in my opinion.
If you are among those who think of investing, then, good for you. Not a lot of people think about investing. A lot of individuals believe that they’re too busy or don’t know a lot about investing that they stop trying even before they begin.
Let me tell a secret that a lot of people I know said to me. It’s not a secret but let’s pretend it is one. The secret is that a lot of elder people wish that they invested or started investing early on in life. Always remember of the compounding interest concept. Compounding interest means that your money will interest and both of those will earn interest on top of interest on top of interest and so on. This means that your investment will likely grow.
Best Tips Before You Invest
Having said all these, there are things that you need to keep in mind, consider, and need to pay attention to before investing. Here are some of the things you need to take care of before you invest.
Know your assets and liabilities.
One of the first things you need to do is know your assets and liabilities. If you have more liabilities than assets, it may be a bad idea to invest when you owe more than what you have.
Don’t be discouraged if you don’t have enough right now. There are ways you can work around that. You can always go for some side hustles that will help you earn additional money. You can always take surveys and make money doing that. You can also blog and eventually make money.
I took a chance on blogging and now, I make $5,000 a month. My wife and I also make over $400 a month just by taking surveys. Doing these may or will help you increase your assets far more than liabilities.
For those who don’t have much to invest, I highly recommend Acorns. You can invest as little as $0.01 through Acorns. Acorns will roundup your purchase and invest your spare change. For example, you purchased an item for $9.59. Acorns will round it up to $10.00 and invest the difference, $0.41, to various ETFs? It invests your spare change automatically. If you sign up via this link, you will get $5 BONUS. With Acorns, who says investing is difficult and costly? Not me.
Read: 7 Perfect Jobs For Stay-Home Parents To Earn Money
Build and stick with a budget.
This will help you not only see what your assets and liabilities are but it will also help you understand what’s coming in and out in terms of money. A budget plan or a budget can help you understand where you are overspending, underspending, or doing just fine.
Building a budget will also help you identify which areas you may or should pay attention to or cut to make sure you have enough money not only to cover your daily expenses but also to finance your investments.
Read: Personal Budget Categories To Start Your Budget
Build emergency fund.
Always have a safe cushion for rainy days. If you invest all of your money let’s say on the stock market and you need money right away, you don’t know if you are making or losing money by pulling it out. Not only that but you have to think about the tax implications of pulling your investment if you put your money into an IRA, educational plan, etc.
Always make sure that before you invest, or before you make a big financial step, you need to put money in your emergency fund. It is recommended to have at least 3 to 6 months’ worth of living expenses stashed in your emergency fund account(s).
Read: Survive Stock Market Crash – 4 Tips You Need To Know
Pay down your debt.
I always recommend that if your investment is making money for you than what you are paying on interest on debts, then, go invest. But in reality and most of the time, the interest rates or the annual percentage rates (APRs) on credit cards, loans, and other debt instruments are far higher than what rates of return from your investment.
For me, there’s no sense in investing when I know that the interest I pay from servicing the debt is far more than what I get from my investments.
If you ever want to pay off your debt fast, you may want to try taking surveys. My wife and I make thousands a year just by taking surveys. If you do go for surveys, I highly recommend that you sign up for as many as you can. This way, if one site doesn’t work for you, then, you have more to choose from.
Here are some of the survey sites that my wife and I go to. Well, I should say these are the sites my wife goes to because I don’t put in as much as time as she does since I focus on my day job and blog. The surveys indicated below are FREE to sign up.
- American Consumer Opinion Panel (My wife and I earn $150-$175 per month)
- Toluna Opinions (We’ve earned over $300 worth of prizes and gift cards in just a couple of months)
- MyPoints (earn back $10)
- Opinion Outpost (My sister earns $50/month)
- Vindale Research (My wife and I earn $100-$150/month and around $200/month for friend referrals)
- Neilsen Digital Voice (Earn without taking a survey)
- Pinecone Research (Earn $3 per survey)
Educate yourself.
A doctor doesn’t become a doctor without studying. A lawyer doesn’t become a lawyer without studying. In short, you need to educate yourself on what and where you want to invest.
Investing especially investing in the stock market is not easy. You may or will lose a lot of money if you make the wrong moves. If it were so easy, then, a lot of people would be doing it and be making a lot of money.
There are basics of investing you need to understand. You need to have a foundation to help you decide which investments to choose or stay away from. Don’t get wrong. Even when you have all the knowledge and experience in the world when it comes to investing, investing still carries risk. The good thing is with knowledge and experience, you can make better and more informed investment decisions.
Read: Make Thousands A Year With This Most Comprehensive List of Survey Sites
Set your goals and priorities.
On whatever, you, always make sure that they are aligned with your goals and priorities. This means that if you are to invest money in the stock market, the investments should be tied to your goals and priorities. To do that, you first need to define what these goals and priorities are.
Don’t make a move when you haven’t figured out what you want to do. For me, this is a big mistake, and it can cost you a lot of money later on or hinder you from achieving your true goal.
If your goal is to buy a house three years from now, then, short-term investing may not help you gain money to pay for that house.
Always make sure that your goals and priorities dictate what you need to do. It should be the other way around. I always this simple example to everyone who asks for tips from me, that is, you don’t go to a battle without a plan because if you do, chances are you are going to be defeated.
I made a goal last year to start blogging even when I didn’t know anything about coding and creating websites. I took a chance and it paid. In year 2016, I made over $34,000 from blogging as a new blogger.
If you want to create your own blog, I created a page where I detailed a step-by-step guide on how to setup a blog in 15 minutes or less with Bluehost. If you use my link, you can start blogging for just $3.95 per month… can’t beat that. Never in a gazillion years did I think I would make great money from blogging. But I did and am still making money.
Read:
- How Blogging Strengthens Marriage
- How To Start A Blog
- How I Made At Least $29,000 In 10 Months As A New Blogger
Are you thinking of investing? What else do you think one should pay attention to before investing?
The post Best Tips Before You Invest appeared first on The Practical Saver.
