Investing has a common definition that is spending money in order to make more money. But Warren Buffett said that investing means:
Planting money for harvesting more in the future.
In fact, all people who spend their money in investing, their main goal is to earn more than they spend. Otherwise, we must say that even in the shortest time, the people have faced with financial losses.
If you are interested in this field and do not know exactly what to do to become an investor, in this article, we will discuss about the points that you should pay attention to them before and after entering the investor’s world to prevent possible failures.
Start with the least money
Contrary to someone’s idea who say that creating and having investment is only for wealthy people, it is possible not to be wealthy and start investing. For the first time, since the person have a little awareness about the financial market and the world of investing, starting with the least money is the best idea for starting an investment.
Investment is different from gambling
Maybe they seem to be similar in appearance, and the goal is benefiting from the money you spent. But in gambling or betting, the most important factor for profiting is the chance. But in the world of investment, the skill is the most important factor to benefit from your money. The investment criterion is based on the risk not the chance.
How much and where to invest
Knowing where to invest is very important. But before that, you need to know how much money you want to invest. If you do not know the exact amount, have a list of your exact costs. Costs such as the money paid for the Internet and intra-city trips and … the left money can be used for investment. But if there is no money left for investment, ignore your extra monthly expenses.
Do not expect high profits in the short time
When a person starts investing, he expects to earn the highest profit in the shortest possible time. If you have just begun, you should realize that in a place that you change your money into an investment, it is not possible to profit in the short term, and you may also lose your money. So if you are not patient, know that you will have a hard work.
Your goals affect your investment strategy
Your goals in life affect the type of your strategy. If your goal from investing is to reach a rate of 20% profit per year, your investing strategy will have low risk and be secure. But if your goal is to reach 70% profit, it will be more risky and you will have to change your investing plans. For this reason, most financial advisers in this area will first ask you about your long-term goals and your opinion about the investment before discussing and presenting the solutions.
It’s never late
The wrong idea that exists between people is that investing needs the appropriate time and age. When we know the exact definition of investment, it will be proved that this thinking is wrong. The investor’s main goal is to increase the money. But there’s the point that the sooner you start investing, the more profit you get.
What do you think about this? If you have had an activity in this area or just started to do this, share your thoughts and experiences with us.