Saturday, November 28, 2009

Basic Financial Investing

Basic Financial Investing

Despite what several books that are on the market have to say about the subject, successful investing is not difficult. But it takes experience, skill, patience and both a long term plan and a short term plan. Take a look at the helpful hints below before you invest.

• If you are investing for the first time, get a pen and paper and make a list of your future financial goals. Where do you want to be financially, next year? How about five years from now? You have to have outlines that are designed to work over different periods of time and understand what you goals are. Once your list is created, you can alter it, as time passes, to make it more effective in reaching your goals.

• What resources do you have? How much can you afford to tie up in investments and still have enough to live comfortably on for the period of your investment? Figure you monthly expenses, and subtract that number from your monthly income. If the sum of your income is at least 30% more than your income you should be able to invest comfortably.

• Once you have your number, this is the amount that should be in your savings account. This is your investment money. Look at your short term goals to see if what you will have in savings is enough to reach those goals. If not you will need to cut back on expenses, add to your savings until you reach your investment goals.

• Are you in a stable job? Is there any chance that you will have to take a pay cut or even get released? How is your car running? Do you have any unforeseen expenses, like medical or education? Your investment total is linked to your income and expenses. A drastic cut in income or unexpected major expenses can greatly affect your success as an investor.

• Now you can invest your money. Remember, before you invest that you must have enough emergency savings, and retirement savings to cover you.

Planning your secure financial future is essentially a numbers game. Income verse's expenses. The worst mistake people make is in not planning for emergencies. Make certain before you invest that you are not in any sort of debt, have plenty in savings to cover emergencies and understand that investments are fluid; your capitol can take a nose dive at any time.

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