The two most frequently asked questions by investors are:
- What investment should I buy?
- Is now the right time to buy it?
Most people want to know how to spot the right investment at the right time, because they believe that is the key to successful investing. Let me tell you that is far from the truth: even if you could get the answers to those questions right, you would only have a 50% chance to make your investment successful. Let me explain.
There are two key influencers that can lead to the success or failure of any investment:
Passive Investment Income
What are some ways a person can generate passive investment income? There are a number of ideas about it. Everyone has his own ideas about which one can be a passive investment income. We should have our own choice of investment. The wealthy, the marginalized, and the middle class people differ in their own preferences about investing their money. Now, let’s compare ways and opportunities according to some considerations such as safety, profitability, and also liquidity.
Safety means that your investment and the income are stable. The money that you invest could be prone to the changing market condition, economic slowdown, and social unrest. The point is that your passive investment income should always be there. In that case, it is safe to invest.
On the other hand, profitability is what we usually consider when we invest. We are supposed to believe that what is profitable is ideal. That’s right. But is it risky? Is my money stuck? Obviously, everyone would go for whatever gives them profit. Whenever we consider gains, the highest amount is always the best passive investment income. What we should consider here should not have been about the top gainers only. It’s should also be the safer ones.
Investing Basics for Beginners
Investing money is a way for individuals to save toward their goals, whether it be retirement, a child’s college education, or some other financial goal. Beginning investors need to take time to determine their goals and learn some basic concepts of investing before jumping right into making an investment. Successful investing takes much research, time, and patience. As beginning investors start to have some success in making money through investments, they will develop a degree of skill. However, there is still a degree of risk involved even the most seasoned and skilled investors. Finding the answers to some basic investing questions will help make the efforts of beginning investors more successful.
How much money do I need to make an investment?
One common misconception by beginning investors is that they must have a large sum of money to make an investment. The truth is, many investments can be made for as little as hundreds or perhaps a few thousand dollars. One way to begin investing small is through dividend reinvestment plans or direct stock purchase options. Investors may be able to invest in a company’s stock options by paying a minimal start-up fee, often as little as $25 or $50 and making an initial investment. Once the money begins adding up, it can then be transferred to a brokerage account, where the investor will be able to begin investing larger sums of money.
What are the different types of investing?
Once investors determine that they have enough money to make an investment, the difficult part is often deciding where to invest their money. There are many different options for investors; some of the most common investment options are mutual funds, bonds, futures, and real estate.
Making Investment Plans
Step 1: Meeting Investment Prerequisites-Before one even thinks of investing, they should make sure they have adequately provided for the necessities, like housing, food, transportation, clothing, etc. Also, there should be an additional amount of money that could be used as emergency cash, and protection against other various risks. This protection could be through life, health, property, and liability insurance.
Step 2: Establishing Investing Goals-Once the prerequisites are taken care of, an investor will then want to establish their investing goals, which is laying out financial objectives they wish to achieve. The goals chosen will determine what types of investments they will make. The most common investing goals are accumulating retirement funds, increasing current income, saving for major expenditures, and sheltering income from taxes.
Step 3: Adopting an Investment Plan-Once someone has their general goals, they will need to adopt an investment plan. This will include specifying a target date for achieving a goal and the amount of tolerable risk involved.
Ease Into the World of Investing
The United Nations does it. Governments do it. Companies do it. Fund managers do it. Millions of ordinary working people – from business owners to factory workers – do it. Housewives do it. Even farmers and children do it.
‘It’ here is investing: the science and art of creating, protecting and enhancing your wealth in the financial markets. This article introduces some of the most important concerns in the world of investment.
Let’s start with your objectives. While clearly the goal is to make more money, there are 3 specific reasons institutions, professionals and retail investors (people like you and me) invest:
Investment and Its Importance
nvestment is important from many points of view. Before doing investment, it is essential to understand what is investment and its importance?
“Investment is an act of investing money to earn the profit. It is the first step towards the future security of your money.”
Need of Investment
What Is an Investment?
One of the reasons many people fail, even very woefully, in the game of investing is that they play it without understanding the rules that regulate it. It is an obvious truth that you cannot win a game if you violate its rules. However, you must know the rules before you will be able to avoid violating them. Another reason people fail in investing is that they play the game without understanding what it is all about. This is why it is important to unmask the meaning of the term, ‘investment’. What is an investment? An investment is an income-generating valuable. It is very important that you take note of every word in the definition because they are important in understanding the real meaning of investment.
From the definition above, there are two key features of an investment. Every possession, belonging or property (of yours) must satisfy both conditions before it can qualify to become (or be called) an investment. Otherwise, it will be something other than an investment. The first feature of an investment is that it is a valuable – something that is very useful or important. Hence, any possession, belonging or property (of yours) that has no value is not, and cannot be, an investment. By the standard of this definition, a worthless, useless or insignificant possession, belonging or property is not an investment. Every investment has value that can be quantified monetarily. In other words, every investment has a monetary worth.
The second feature of an investment is that, in addition to being a valuable, it must be income-generating. This means that it must be able to make money for the owner, or at least, help the owner in the money-making process. Every investment has wealth-creating capacity, obligation, responsibility and function. This is an inalienable feature of an investment. Any possession, belonging or property that cannot generate income for the owner, or at least help the owner in generating income, is not, and cannot be, an investment, irrespective of how valuable or precious it may be. In addition, any belonging that cannot play any of these financial roles is not an investment, irrespective of how expensive or costly it may be.