Three Ways To Educate Yourself
Investing requires money commitment now in the expectation of retrieving more in the future. As there are several investment options out there for consideration, an investor requires good investment skills and knowledge.
Once you are familiar with the landscape of the financial world, there are three major areas one has to keep an eye on before making investment decisions.
1. UNDERSTAND YOURSELF
One, take some time to know more about yourself and the amount you are willing to commit. During paycheck, decide on whether to (1) save it or spend more and (2) make a bank deposit or invest.
In income investing, if you are already holding onto a few stocks, you should question if spending more & investing are necessary.
If you are getting started, then question yourself the risk willingness and duration of your investment.
2. UNDERSTAND INVESTMENT PRODUCTS
Two, acknowledge that there is a plethora of investment products out there with varying liquidity levels. Liquid investments such as stocks are more appropriate than properties for they are less costly and you attain your returns faster.
After analysing the product’s liquidity level, find out how safe it is, risks involved, if any measures can be taken to manage the risks, and if any fees or penalties for sudden withdrawal are present.
3. UNDERSTAND INVESTMENT STRATEGIES
Three, if your investment choice is stocks, what are your investment strategies?
Is fundamental analysis really necessary for each stock? Would you opt for value investing or income investing? Income investing would be more appropriate because it already requires the investor to pick companies that provide a steady stream of income at the very beginning. It also doesn’t require a huge capital.
It is one straightforward technique for picking stocks (Investopedia US, 2014). In other words, income investing is safe because risks have been minimized once you choose the right stock. More importantly, where and whom do you find to acquire the mentioned skillset?
Again, after self-analysis and product knowledge coupled with good investment skills, can you reap more returns, lose less or lose nothing and retire earlier.
Once you achieve these three major features of your financial decisions, you are in total control of your financial destiny.
Jade Lee is the Chief Editor of Giants Learning Technologies. Her life purpose is to help; thus committing to youths like herself through articles regarding early financial planning. Jade is an alumnus of Ngee Ann Polytechnic where she attained a Diploma with Merit in Early Childhood Education, having dedicated three years in understanding preschool children. Under a scholarship, she reads Bachelor of Arts in Psychology from Nanyang Technological University. Jade is also a commercial model and engages in Hip-Hop dance. Find out more about her insights via firstname.lastname@example.org
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