There is this picture of green and red lines that pops up in the mind when you hear the word investment. That is not your life flashing before you. They actually signify gains and losses on the stock exchange board.
Every new day, the markets open and present new opportunities. About fifteen years ago, it was Fintech, and we all know the early birds are cashing out big now. It’s okay, you can stop rolling your eyes at Paypal and Alipay already.
But, we also know that a new business, an emerging market, and low competition doesn’t automatically add up to success. In fact, there is no 100% assurance that an investment will yield good returns. But following the tips below is a great way to start.
Be open-minded
Approach investment opportunities with an open mind. Even if it came highly recommended or cancelled by someone, you should look at the facts and figures for yourself. Don’t let someone push you into a Ponzi scheme or out of a good investment. It is easier to live with if it is a decision you made based on your analysis. However, this is not to say you should ignore expert opinions and red flags.
Diversify
This is literally the egg and basket advice. You should not tie up your money in just one investment, no matter how good the promise of returns is. While it might seem wise to invest in it since it promises good returns, you could lose all your money if anything goes wrong. Spread out your investments.
Reinvest
The way to get the juice of investment is to keep reinvesting. That is when the money begins to make sense because the same capital keeps bringing back a percentage of increase every time. Over time you will realise how much your initial capital has grown to be. Some people invest, get a 10% return and move on saying it’s too small when reinvesting that capital four more times would bring them to a 50% return on the same capital.
Understand the risk
Don’t invest if you don’t understand the risk and if you cannot come up with a plan to manage the risk. To understand risk, it is wise to engage a financial advisor. At this point, I should tell you there is no “safe investment”. Every investment is a risk. A safe investment is simply a low-risk investment, and, of course, on the other side of that, we have high-risk investments.
One more thing, a low-risk investment is not necessarily a good investment, and a high-risk investment is not automatically a bad investment. Getting an expert's view is quite helpful in making an investment decision, there is a reason they are called experts. But most importantly, if you can’t afford it, don’t do it.
