Thinking about finance and investment might be too complicated for several people. But put money to work for your sake is easier than working alone. If you intend to be a millionaire for example, you need to work twenty four hours a day before you can leisurely enjoy your money. Investment will work alone to earn money while you are doing the hard work and get busy with your life.
Wrong Impression Of Investment And Before You Invest
1. Investment is not gambling
The meaning of gambling is hoping for a benefit in uncertain condition. A true investor will calculate, observe, and complete analysis before, during, and after investment. Though people cannot escape from the risk and financial lost of investment there is a rational expectation to get income from it. People who gambling is like walking with closed eye, while people who invest is like walking with a pair of glasses.
2. Investment is not customer purchase
Consumer purchases – beds, cars, TVs and anything that naturally depreciates with use and time – are not investments (investopedia.com). Investment specializes in finance not others. Bad example is investing an entertainment by buying a LCD TV or investing healthy by buying a massage chair. It simply says that everything cannot be an investment or to be invested.
Hearing the risks of investment might cancel your intention to invest. Depend on your condition and situation; investment should not be taken as the only way to get profit. Rather you invest as an additional income. It is beneficial as your saving when you get old and take retirement. To earn money with less move is how investment working.
3. Determine your true objective.
As it has been said before an investment objective is varied for each person. Somebody can give all of his life to investment because need money to survive. He will observe carefully so that he doesn’t lost money. Another person is a rich and has more time. Here he can take longer time to earn profit and he will not be disturbed severely if sometimes he loses the money and face a bigger investment risk.
4. Consider your time.
To recover from loss and investment risk is not easy especially for older people. Therefore, the calculation should include any change that might happen suddenly. People never want to lose more than they can handle.
5. Knowing your personality.
“Peter Lynch, one of the greatest investors of all time, has said that the ‘key organ for investing is the stomach, not the brain.’ In other words, you need to know how much volatility you can stand to see in your investments” (hsbc.com). The stronger you are to tolerate and fight investment risk the more suitable you are to involve in investment.
You’ll get rich faster through this way, but by knowing the most common investment mistake above before you put your money into it, you will get a higher chance to reach the goal.