Practical Tips To Financial Investment Prudence
1. Feed Your Mind Aright
Ever wondered why many people, including very smart and educated people, fall for investment scams and ponzi schemes? It’s because there is a deep emotional aspect to managing your money. Getting it wrong is a lot like fornication; the same way many people find marriage as a perfect way to avoid it so also will you have better luck focusing on doing the right type of investment rather than avoiding all investments.
I would suggest you try what I do. I am subscribed to over a dozen investment and financial planning websites, from Investopedia to CFA Institute. I installed a couple of investment and business news apps — Seeking Alpha, Rubicon, Yochaa and The Street. And on Flipboard, I set it to scour Investment, Personal Finance and Business news for me. All these enable me to daily learn from older experts, gain deeper insights into how the investment world works and be aware of the right types of opportunities.
2. Act Small First
I find it very difficult to give people investment advice because it is a lot advising someone on what their best food should be: the only way they’ll ever know is to try many types. You will have to put in your real hard earned money in the beginning before all what you are reading will be of any use or turn to profitable wisdom.
I was very lucky that I started small, despite putting most of all I had, and I promptly lost all. It was the beginning of investing wisdom for me. I learned a lot of lessons that I can never forget and I got to see that book knowledge is not same as experience. Now that I am 10 years in my investment journey, most of all I remember and profit from are not what I read in books but what I got from experience. So you have to just brace up to start small and expect some bitter experiences. There is no book nor advice that can prevent you from your own stumbles as you learn to walk the investment world.
3. Make It Interesting And Addictive
Years ago, whenever I get some unexpected bonus or side cash I would head straight to computer village or amazon.com to buy some fancy new gadgets. The whole process of reading up on new tech, reading through reviews, being one of the first in my small world to own the gadget and doing cool things no one else around me is doing was very interesting and addictive. I would sometimes start scouring the market (offline and online) for the new gadget to get before I even get the alert. The entire process was fun for me. Usually more fun than after buying the product.
Now it’s investing I have swapped out the tech gadgets with. You would have even noticed it from my blog posts: I now write more about what investments I am planning to do unlike a few years back that I used to write about what new tech gadget I can’t wait to own.
The advantage of this is two fold. One is that the very process increases the amount of money I set aside for investing as against spending on other fun things. I know of people who travel and shop whenever some bonus money come into their hands. The other is that the deliberate research based way I take in investing the money makes me a better and more experienced investor by the months. People are amazed by how much I know and do in not just the Nigerian investment market but also the global market; it is all because I spend days, even weeks, researching online and offline the best way to put my money to the greatest investment use.
And those are my practical tips to financial investment prudence. Collectively, all these things I detailed that I do have made me a lot less tangible asset light. I have very little material assets to show for my money and if you had known me over the last seven years you wouldn’t see anything indicating that I now earn over five times my 2014 salary, sometimes even more than my entire one year (2013) salary in just one month. I have slowly turned into L’Avare (a miser). So if you follow my practical steps be prepared to for that side effect too.
Originally published at www.olafusimichael.com.