Investing can be a scary proposition for the uninitiated. After all, who wants to risk their hard-earned money on something that might not pay off?
Why put in so much work to earn it in the first place?
The answer lies in the risk vs. reward factor. Investing with your money is a surefire way to grow it over time and create long-term wealth.
Read on as we share our insights on investing.
The Good of Investing
Picture by QuinceCreative on Pixabay
Investing is the ideal way to grow your money over time.
Let’s face it – even if the stock market goes up tomorrow or down next year, the amount you have will be the same (unless you withdraw it).
You’re taking risks every time you put your hard earned money into the market (or any investment for that matter). However, if you don’t take any chances, then you’re not taking anything at all.
There are a million investment vehicles out there. You can put your money into stocks like bonds, real estate, commodities, or even Forex. There are hundreds of different ways to get your money working for you.
Risk and Return
When you’re first starting, you have to consider the risk of investing your money.
How much are you willing to lose if investing in something that goes against the grain?
What is the expected return on your investment?
These are important questions you have to ask yourself before investing. The expected return is the rate of return on your investment that you have to expect to get back your money.
Nobody knows what will happen when you invest your money into different market structures. You have to consider the risk involved in it and hope that your return is more than the risk. Most people are hoping to get an 8-10% return on their money, so investing in something that gives a high risk might not be the best idea.
The Bad of Investing
It’s not uncommon for investors to spend thousands of dollars to set up their brokerage accounts and research different investment vehicles.
You have to be in it for the long haul.
The stock market can go up or down in a short period. That’s why so many people try to time the market.
Most long-term investors know that it’s next to impossible to predict the market’s future movements, so they’re willing to take a long way and invest their money over time.
The Ugly of Investing
Bad investments can wipe out years of profit.
Investing is not a get-rich-quick scheme. However, what it is is a long-term strategy to grow your money over time. And sometimes, you’re going to make a lot of money and other times you’re going to lose a lot of money.
What you don’t want to do is invest your money and expect to get a return and then have a bad investment wipe out your profit and take you back to square one.
You can’t predict the future. Investing is about taking a chance. You can’t predict what’s going to happen in the market. You can only make an educated decision on what’s worth putting your money into.
Conclusion
Good things take time. It’s a lesson all successful investors have learned.
Be patient with yourself and don’t let your fear keep you from reaching the financial security you deserve.
No comments
Post a Comment