5 Investing Tips to Become A Successful Investor
You’re reading this article because you’re probably aware that some wealthy people today grow their wealth through investment. Maybe you’re already investing or just starting and you want to know how to do it right. While there are no hard and fixed rules to financial investment, you need to equip yourself with some foundational knowledge so you can get your money to work best for you. Below are 5 investment tips you can practice to become a successful investor.
5 Foundational Investing Tips to Succeed as an Investor
Tip 1#. Organize your Finances First
These days, it’s easy to start investing even with as low as $5. Investment apps such as Robinhood and Stash allow people to invest in fractional shares at $5 with very little or no commission fee attached. Even companies such as Future RE Capital Management have options for all investor levels. While that is great, still you must first organize your finances orderly before venturing into investing. For example, you need to establish an emergency fund, set up and contribute towards retirement accounts such as IRAs and 401(Ks), and pay off all your credit cards with high interest before you start out investing.
Tip 2#. Come with and stick to an investment philosophy
Don’t be the “Jack of all trades” that runs after every hot stock they hear about in the investment market. Becoming a successful investor entails thinking about the bigger picture and creating goals around it. What financial objectives (buying a home, building up your retirement, funding your children’s college costs, etc.,) are you striving to achieve, and how best can you achieve them? The clearer your investment goals are to you the better you’d stay motivated and be on track.
Tip 3#. Use your Established Goals to Guide your Financial Investment
Once your investment goals are established, all other categories of your investment strategy would become clearer, including your risk tolerance and time horizon. For instance, assuming at some point in life you want to use a part of your investment fund to support your retirement, investing in long-term assets (holding investment for long-term) will be a better option for you than day-trading, which may be riskier. However, supposing you plan on using part of your investment income to purchase a home in a few years, you’d invest within a shorter timeframe.
Moreover, remember that most investment portfolios include both bonds and shares. Depending on what your objectives are, you may consider allocating more of your investment portfolio to stocks because they provide a higher rate of returns than bonds, which, on the other hand, offer lower returns but have lesser risks. You can do it either way. Just stick to a philosophy.
Tip 4#. Commit to Keeping your Costs Low
No matter the investment vehicle type you chose, make sure you pay careful attention to the administration fees charged. Some investment platforms charge a percentage of investment growth, others, a flat fee. Supposing you’re investing $1000 or $500, you may find the percentage more favorable. When later you start making good money, you can revisit your trading platform or advisor’s fee structure.
Additionally, while selecting an investing platform or Robo-advisors as they’re popularly called, make sure you stick with the one that offers a straightforward enrollment, with a user-friendly interface and low minimum balance. This means you won’t have to spend more on services any time soon. Shop around for a Robo-advisor with the best fees.
Tip #5. Understand the Importance of Compound Interest
Interest isn’t only important when it involves debt, you can also convert interest into a beneficial tool when it involves investing.
As the experts at Forbes put it, converting the benefits of compound interest to suit you, is a guaranteed way to gather substantial wealth. The ultimate key that unlocks this goldmine is to start investing as quickly as possible and ensure you reinvest the interest and dividends your investment brings in. After a while, the compound interest will speed up your investment growth. Put your money into smart investments to start working for you.
Future RE Capital Management taps into the US investment property assets market, valued at over $162.8 billion. With over $25 million in Assets Under Management, Future RE Capital Management is focused on the acquisition, renovation, leasing, and sales of multi-family and residential assets in affordable housing markets, helping investors realize a ten to fourteen percent annual return on their investment. Visit our site to find out more information about short-term opportunities.