12 Things You Need to Know Before You Start Investing - Ratinah

Start Investing - Don't waste your money in vain! Do a checklist of 12 things you really need to know before you start investing. Investments with profitable results are information that is sought after by various groups. 

12 Things You Need to Know Before You Start Investing - Ratinah

Every year, of course, everyone will have a new wish that adds to the list of desired achievements. Likewise for the future that must be prepared carefully. This is what motivates people to invest.

1. Know your current financial situation

Know your debt level. Calculate your income and expenses with the following in mind:

  • Mortgage payments
  • Personal tax
  • Loans and overdraft
  • Cost of living
  • emergency fund
  • Car production
  • Entertainment
  • Holiday
  • School fees
  • Credit card debt
  • Family commitment

Before you start investing your money in any investment product, you should know how much you can set aside each month for investments. The general rule is, you have to pay off your debt first, then save and invest later. This means that the more money you put aside now, the better for your future. I would say set aside 10% of your income for rainy days. 10% is a small amount that you won't feel a pinch. Save until you have successfully built a "dam management fund".

2. Prepare funds for dam management

This is in line with point 1. You must save at least 3 to 6 months of your earnings as a dam operator. Once you have done this, the extra money you saved can be used to invest.

3. Protect yourself and your family first

At this point, I mean you should have basic life insurance that covers you and your family against terminal illness and accidents. This is very important because even though you may lose all your money through investments and if you or a member of your family needs medical treatment, it will be well taken care of.

4. Know your risk level

If you can't take big risks, short term investing and swing trading are not for you. It is better to invest in a mutual fund or trust fund that will provide fixed payments and have lower risk. If you are a high or medium risk taker, you can try investing in stocks, growth and hedge funds.

5. Diversify your investment

Experts will tell you that diversifying your investments is a must. Your investment should have a stable mix of stocks, mutual funds, and/or bonds. Also, you should invest in a different industry and/or region. This will help you minimize risk as fluctuations in the market will not have a major impact on your investment. Your ideal mix is ​​20-40% stocks and the rest are mutual funds and bonds.

6. Do your homework before you invest

It is good to seek expert advice. But, the money is ultimately yours. So you need to do your research and make an informed decision about what to invest in even though your financial advisor may have it all set up for you. This is to make sure you know what you are investing in and can track it. If your investment suffers a loss, you will be able to make an informed decision whether to sell or hold if you know your items well.

7. Do annual stock take if not often

Your investment may already be reaping the benefits. But, it's good to know how well your fare is at the end of the day. Reinvest profits and celebrate if you are successful. This will motivate you and will make you more determined to achieve your financial goals.

8. Knowledge in investment

Never start investing with zero knowledge. This will be difficult for you later. You should at least have a general knowledge of the type of investment chosen. In addition, before investing, you should ask for input from people who understand it first.

9. Find out about the risks

Before starting to invest, you need to understand about the risks that you are very likely to face later. This is done so that you can prepare a solution when something bad happens.

Risk is the main consideration for your type of investment. There are various kinds of risks ranging from low, medium and high. You can choose according to your tolerance for risk.

10. Total income

To be able to invest, of course you have to know how much income each month. This is a measure of whether you have stability in terms of income. If your income can be allocated for investment, then it never hurts to try. Start with the type of investment that has a small risk.

11. Assets owned

You must first list the assets you own to be able to estimate the profit you can get from your investment. The more assets you have, the greater your chances of being able to benefit from investing.

12. Advantage

The purpose of investing is to make a profit, for that you must know what kind of profit can be achieved. There are several types of investments that are capable of generating large returns, but with great risks as well.

Risk is an estimate of possible losses, but if you are careful and choose the right strategy, you will not experience big losses.

Investment instruments that are much loved today

Before starting to invest, you also need to know about investment instruments that are currently in demand by many people. What are the types of investments, the following is the information.

1. Property

Property is one of the most profitable investments. The longer the value of the property will increase. This allows you to invest for a longer period of time. In addition, property can also be used alone when needed and can be returned as an asset when not used. This type of investment is very flexible so many are chosen.

2. Gold

Most people would like to wear gold as jewelry. Apart from being an accessory, it turns out that gold has many more meaningful benefits. Gold has a fairly stable value. So, if you want to start investing, it can be in the form of gold first. If gold bullion is too expensive, then you can buy jewelry first to make it an asset.

3. Mutual funds

This type of investment is said to be very profitable because you can directly monitor its movements. You can analyze the amount of profit that will be obtained easily.

There are several types of mutual funds, such as money market, fixed income mutual funds, equity mutual funds and mixed mutual funds. Each type of mutual fund has its own risks. For that you should choose the type of mutual fund that suits your abilities.

4. Bonds

This type of bond investment makes you have to invest a certain amount of capital for a particular company. Later you will get a letter regarding the bond. The letter will state how much and how long you will provide a loan to the company.

5. Stock

For those of you who want to jump into the capital market, you can choose stock investments. This investment allows you to jump right in to find out the state of the market. You can make purchases online, the amount is not limited so you can manage it yourself.

Those are the things you need to prepare before starting to invest and what investments are in demand lately. Choose the type of investment that suits your funds. Don't let your investment make it difficult for you to meet your daily needs.

It is better to make a budget in advance to be able to allocate funds appropriately. Investing is also as important as meeting daily needs, but the effects will only be felt in the future.

That's 12 Things You Need to Know Before You Start Investing - Ratinah

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