5 Basic tips to start investing
Investing consistently and avoiding financial risks are some of the key factors to bear in mind if you want to be on the right path to investing in your future. Follow our basic tips if you’re an investment beginner.
Do you consider investing as something to only do later on in life?
The reality is you’re never too young to start investing your money, and as soon as you start earning, you can start making your money work for you. But as an investing first-timer, where do you begin?
Ultimately, an investment is something you put money into to make your money grow - this involves varying degrees of risk. Safer investments provide a greater assurance that you’ll keep your money, but your rate of return may be lower. Higher risk investments offer a higher rate of return, but there’s a greater risk that you may lose money.
Start investing
Here are five basic tips for the investment beginner:
1. Budget
The key to being able to save and invest is spending less than you earn.
2. Reduce your debt
The interest charged on credit cards and loans will most likely exceed what you would make from an investment. Think about using any extra cash to settle debts first.
3. Have a goal
Investing in an end objective, like a holiday in Thailand or a new car, can help keep you motivated.
4. Branch out
Don’t put all your eggs in one basket. If all your money is in one investment that doesn’t do well, you’ll be hit harder than if you have money in different places.
5. Fine tune
Keep track of your investments, and make adjustments that are in line with your goals.
Based on your budget and goals, you can decide what type of investor you are and what risks you're willing to take. But as an investing newbie, it’s always best to chat with a professional financial planner, before investing your money, to figure out what would work best for you.