Learning to invest money can be a daunting prospect. This article offers 5 simple tips to help the novice investor make their money work harder for them.
1. Take your time
We are all looking for the next great investment secret that will instantly make us rich. However in reality this very rarely happens. Ask any successful investor how they made it and the answer will nearly always include the word patience and consistency.
2. Make investing a habit
Not all habits are bad. Few people are lucky enough to have a lump sum of money kicking around to invest. As a result many say they simply cannot afford to invest their money, be it in a savings deposit account or in the stock or commodities markets. If you make a point of saving some money each month and investing regularly even small amounts you'll soon see the difference over a period of a few months when the investments add up.
3. The third rule
The is a great saying that says you should spend a third, save a third and invest a third of your income. Though this may not work for everyone it is definitely worth aiming for. By doing this you won't be investing at the risk of not building up savings for a rainy day and t should also ensure you do not overspend each month.
4. Set a budget for yourself
Following on from point three above, in order to achieve your goals you should set yourself a budget each month. Analyse all of you outgoings (down to the last penny) for a month to see where you can trim your spending. The usual examples are cutting out the expensive coffees each morning, over spending on socialising, making your own lunches instead of dining out.
5. Diversify your portfolio
Any professional investor will tell you that diversification is the key to success. If you don't diversify your investments you may end up wiping out your investment fund with one poor investment selection. Try to diversify throughout investments that are not highly correlated.
If you want to find out more about how to learn to invest money or are interested in learning smart stock investing or are lucky enough to have a lump sum investment opportunity, please visit the authors website using one of these links.