$$Basic Investing Plan$$
Simple and easy rules for a worry free, money making path to financial success. Wise advice for even a seasoned investor.
Step #1: Make money. The people who are the weathiest are those who own their own businesses. This doesn't mean regular, hard working people can't make money, it just takes a little more planning. In my Dad's words, "Get a job, you bum."
Step#2: Pay yourself first. No matter what you make, set aside a certain amount in your savings. It doesn't matter if it is only $5.00 every paycheck, make it a priority to put money away for the future...and not like they use to do by hiding it in a coffee can. We will discuss more about what to do with it later.
Step#3: Insurance Plan. Whatever your job, make sure you have some type of insurance coverage. Health problems and emergencies can derail the best financial plan. If you get hurt and can't work again, how will you survive? Risks may be exciting at times, but a safety net makes life a little more worry-free. You don't want your plan to fall, and not be able to get up.
Step#4: Savings for safety. It is recommended that every working person have at least 3 to 6 months of expenses in savings to cover the lost of a job, or a prolong illness not covered under an insurance policy. To put it in economic terms, it is a liquid asset, meaning you can turn it into quick cash. This is a necessary part of your plan as is insurance, but it hurts to see that money sitting there earning less than the inflation rate. The liquidity I see is in the form of a tear running down my cheek, but it is a must.
Step#5: Getting your money working. If you think that you need to keep your money in a bank's savings account, then you need to read "Are you really saving money in your savings account?" Sure, it might be safe, but with the rate of inflation, your money is losing value. If you didn't already know it, there are ways to make more money that are just as safe. We are now ready to move from that idea of saving, to the power of investing. There are so many ways for a person to put their money to work, what you need to do first is to establish your "tolerance to risks." Low tolerance people should look into CD (certificates of deposits), annuities, index funds, and mutual funds. High tolerance people will become more diverse in their portfolios including the ones mentioned before, but also allowing more opportunity to make greater gains by adding stocks and bonds. Keep in mind, if you bought just 1 share of Apple in 1986, that investment would be worth more than $33,000 today.
Step#6: Learning. Researching is the best strategy for any investment plan. You are now ready to read, "Start small and watch your investment grow" under "Beginning Investing." Think of it as your garden, plant the seeds and be patient. Traders are different than investors. Investors don't worry about the frequent changes in the market. The long term results are what's important. With a diverse portfolio following the guidelines in the article mentioned above, a person can on average expect to see a 7% return for their money...can your bank get you that?
Step#7: Just Do It. It is never to late to start, but starting early will allow you to compound your gains quicker. A term I don't like in the business world is "unearned income." This is money you make on investments like interest, dividends, and capital gains. It takes a lot of work to find the right financial plan, you EARNED it. Now go out and find a way to get your money working for you.
Step#8: Enjoy life...it isn't always about the money, so be sure to find time for yourself and do things that make you happy (as long as it doesn't interfere with someone else's happiness).
Simple and easy rules for a worry free, money making path to financial success. Wise advice for even a seasoned investor.
Step #1: Make money. The people who are the weathiest are those who own their own businesses. This doesn't mean regular, hard working people can't make money, it just takes a little more planning. In my Dad's words, "Get a job, you bum."
Step#2: Pay yourself first. No matter what you make, set aside a certain amount in your savings. It doesn't matter if it is only $5.00 every paycheck, make it a priority to put money away for the future...and not like they use to do by hiding it in a coffee can. We will discuss more about what to do with it later.
Step#3: Insurance Plan. Whatever your job, make sure you have some type of insurance coverage. Health problems and emergencies can derail the best financial plan. If you get hurt and can't work again, how will you survive? Risks may be exciting at times, but a safety net makes life a little more worry-free. You don't want your plan to fall, and not be able to get up.
Step#4: Savings for safety. It is recommended that every working person have at least 3 to 6 months of expenses in savings to cover the lost of a job, or a prolong illness not covered under an insurance policy. To put it in economic terms, it is a liquid asset, meaning you can turn it into quick cash. This is a necessary part of your plan as is insurance, but it hurts to see that money sitting there earning less than the inflation rate. The liquidity I see is in the form of a tear running down my cheek, but it is a must.
Step#5: Getting your money working. If you think that you need to keep your money in a bank's savings account, then you need to read "Are you really saving money in your savings account?" Sure, it might be safe, but with the rate of inflation, your money is losing value. If you didn't already know it, there are ways to make more money that are just as safe. We are now ready to move from that idea of saving, to the power of investing. There are so many ways for a person to put their money to work, what you need to do first is to establish your "tolerance to risks." Low tolerance people should look into CD (certificates of deposits), annuities, index funds, and mutual funds. High tolerance people will become more diverse in their portfolios including the ones mentioned before, but also allowing more opportunity to make greater gains by adding stocks and bonds. Keep in mind, if you bought just 1 share of Apple in 1986, that investment would be worth more than $33,000 today.
Step#6: Learning. Researching is the best strategy for any investment plan. You are now ready to read, "Start small and watch your investment grow" under "Beginning Investing." Think of it as your garden, plant the seeds and be patient. Traders are different than investors. Investors don't worry about the frequent changes in the market. The long term results are what's important. With a diverse portfolio following the guidelines in the article mentioned above, a person can on average expect to see a 7% return for their money...can your bank get you that?
Step#7: Just Do It. It is never to late to start, but starting early will allow you to compound your gains quicker. A term I don't like in the business world is "unearned income." This is money you make on investments like interest, dividends, and capital gains. It takes a lot of work to find the right financial plan, you EARNED it. Now go out and find a way to get your money working for you.
Step#8: Enjoy life...it isn't always about the money, so be sure to find time for yourself and do things that make you happy (as long as it doesn't interfere with someone else's happiness).
