If you want to reduce physical exertion, it is worth investing your savings. However, before you start investing, read and put into practice the following rules.
Invest with the amount of money you are willing to lose
Don’t allocate all your savings to investments in the stock market. The market situation can be volatile and in the event of sudden turmoil, you may be left destitute.
Don’t pack all your eggs in one basket
This is something obvious – everyone emphasizes the importance of diversification. And yet so many people do not follow this rule. No matter how confident you feel in your forecast, don’t base your entire investment on it. It is good to assume that a loss on one investment cannot cost you more than 2-3% of the entire portfolio.
Even if for some reason you let a single investment fall by 10%, diversification will not make the overall loss as painful. It is also important that the number of companies in our portfolio is limited to 5 entities, because you will have no chance to effectively control these investments.
You don’t accept risk and losses – don’t invest
Risk and loss are an inseparable part of investment, and yet so many investors fail to accept them. A successful investor is one who, before making an investment decision, knows how much they can lose and what the acceptable level of risk is for them.
Approach success with limited trust
It must be said directly. When everything goes your way, you don’t learn anything. This does not mean that you should not strive for success.
If you happen to make a mistake and lose money during your investments, be forgiving to yourself. Give yourself time to learn. Instead of blaming yourself, think about what you can do to prevent yourself from making the same mistake again.
Invest in knowledge
“Give your money to strangers, and they will work for them before they start working for you.” Unfortunately, this is a painful truth that most people are not aware of at all. Lack of knowledge always costs you, but sometimes you are not aware of it. Investing in your own development is by far the best and safest investment you can make in life.
You can, whenever you want, take the information in your mind and generate unlimited amounts of money with it.
Use the lever of time
Jim Rohn, author of “The Power of Ambition,” wrote in his book, “Usually people overestimate what they can do in a year and underestimate what they can accomplish in ten years.”
These are very wise words. How many investors are driving their finances to ruin because of their impatience? They want to achieve wealth quickly, which consequently excludes their rational thinking. They start making decisions under the influence of emotional premises, and it has been known for a long time that emotions are not a good advisor. The desire to achieve wealth is not bad, but if you have not earned money from investing so far, give yourself time to learn, draw conclusions, and even make mistakes.
Your life is about constant development and striving for perfection. Your work is limited to choosing the right investment, the rest is time and the power of compound interest. So if you have some money in your “sock”, invest it as soon as possible. To begin with, in his education. Later – whatever you want. If you have any questions, ask them in the comments. This knowledge is essential for successful investing.