Who wouldn’t want to have a steady flow of income? With today’s economy, it wouldn’t hurt to have a financial backup plan. There’s simply no guarantee that things will remain peachy all throughout, and one never really knows when they’re going to get hit by the blows from the market.
Young investors tend to be overzealous when it comes to their venture. For first-timers, expectations are high, and their excitement becomes palpable in the air. Amidst that excitement, however, one must remember to keep grounded not only with their mindset, but also with the practicality and feasibility of their business goals.
Long-timers will tell the new ones that there is no set of solid rules for investors to follow so that they can be successful. There are some guidelines that govern the system invisibly, though, and it would be good to have a reasonable grasp of it before making risky decisions. Know the rules before breaking them, as they would say.
Here are some tips that new investors could very well use for their own aspired success:
Capitalize: For any investment that one intends to make, financial readiness is an absolute must. Money, after all, is the medium of the trade. No transactions will ever be completed without money, or at the very least, a commensurate value of it. As such, it goes without saying that if you want to become a successful investor, you should have the capacity to actually invest. And by that, it simply means you need money.
Of course, it’s not all that easy to come by. In fact, that’s precisely why you want to get into investing. You want to be able to generate more money without having to do more work. If you’re really bent on being an investor, therefore, the first thing you have to do is save up for your capital. Unless you have some rich relative willing to give you a loan, with no interest and payable when you’re able, you will really have to assess where your finances are right now, and if you can afford your dream investment.
Preparation will always be key, and so apart from the start-up capital, you should also be ready to throw in some other tranches of amount to see your enterprise through. It’s not a one-stop shop, so you might as well be ready and stock up on your own fuel.
Don’t be Easily Sold: Once you express your intent to pursue an investment, expect that you will be getting a lot of offers left and right. They will promise you a smart investment, returns that will come at the snap of a finger, enormous amounts of money that you wouldn’t know what to do with anymore, and all that jazz. The takeaway tip from this: do not be so quick to bite it hook, line and sinker.
Anyone who promises you a quick buck from your investments is most likely out to earn a quick buck – at your expense. To make sure that you are following the right lead when it comes to investing, do your own research. Follow your instincts, yes, but it would be great, too, if you can back your instincts up with empirical data.
Ask around and compare answers to your question. How viable is a particular investment, really? Is it actionable at this point in time? What are the risks and are the benefits enough to offset the same? For first-time investments – or for any kind of investment, actually – you wouldn’t want to jump the gun before actually doing some heavy research.
Manage Expectations: The hard truth is that once you’ve invested on something – a restaurant, a plot of land in the countryside, a three-door apartment – there are varying degrees of returns for your investment. What is constant, however, is that these returns will not come easily and immediately.
Think of your investment as a plant. You would have to water it, give it enough sunlight, allow it nourish and flourish, until one day, it blooms. Your hard work will pay off, but it will require your patience. You cannot rush a plant to grow, nor can you expect to earn from your investment overnight because you thought it would be easy money.
Realistically speaking, investments on items like stocks and real estate, you can expect a nine to 10 percent return of investment per year – after a while. Many folks refuse that qualifier, “after a while”, because they want results good, and they want it fast. In investments, that’s not going to happen. You have to bide your time, play your cards right, and manage expectations. The more realistic they are, the less disappointed you will be if they don’t shape up as you hoped for it to.
Branch Out: If you think you’ve already garnered enough experience playing it small, probably dabbling in minor property investments or trading small stocks, then don’t be afraid to level up. Diversification is one such way of branching out and leveling up without exposing yourself to greater risk. By diversification, you could, for example, try getting stocks in the international market, and not just the local ones. If you want to focus on real estate, you can jump from a residential to a commercial one.
You don’t necessarily have to have a business degree in order to become a successful investor. Of course, you would have to make the right choices when it comes to entrusting your capital into a particular venture, but overall, any investment is bound to yield you benefits with the right perseverance and patience.
About the Author:
Rabie Fares is the founder and CEO of Australian company, Associare.com, a professional social network that aims to help investors and entrepreneurs connect with each other to build lasting business relationships
Originally posted on February 5, 2014 @ 8:45 am