5 Tips for Making Your First Investment
I don’t have a lot of money isn’t a good reason not to invest
Investing can seem both a daunting and exciting experience. On the one hand, investing is a way of helping entrepreneurs reach their goals by providing them with the necessary funding to kick-start their companies or ideas. On the other, investments can have profitable returns for you, granted that you make wise decisions. This is the part that seems to deter us from investing, the idea that investing includes a degree of risk can be an off-point for many people.
Typically, people are afraid of investing for one of two reasons; 1) the risk that comes with placing money in the hands of something unfamiliar or unsure, 2) the misinformation or lack thereof that leads us to a state of confusion and discouragement for making investments. As an investor today, I understand the beginning stages of becoming an investor and so I wish to encourage you with this article to take the first steps as an investor with the following 5 tips to ease your entry into the world of investments. Ready for the ride?
1) Only invest what you’re comfortable with
This sounds like an easy step, but it’s important to remind everyone and to continue to remind yourself, “Don’t bite off more than you can chew.” Ultimately, investing should be done with those extra savings, those savings put aside to make profitable, but never the income that you depend on month-to-month. As a standard rule, always remember that your total portfolio should not be more than 10% of your income or net worth, meaning you should never invest what you need, like rent.
Regardless of the tempting offers or exclusive deals, keep in mind that most investments take time to give returns. Therefore, especially in the beginning stages of your investment portfolio always ask yourself, “Can I live without this quantity?” before investing it.
2) Anyone can invest, no matter the income
People tend to assume that you need a large amount of capital to become an investor, this is a common misconception because not having a lot of money is not a good reason to not invest. Rather that is one of the top reasons to invest, no matter the size of your capital, investing is what makes those savings grow. Focus on investing a little bit at a time, until you understand the rules of the game and grow to feel more comfortable investing your capital. Platforms like Housers, allow you to invest with as little as 50€, meaning you can start small and work your portfolio up depending on how you feel.
3) Dig in deeper, do reaserach
At first thought, we go straight to the known and familiar, we look to invest in products and companies that we’re passionate about or have some sort of expertise in. This is a good start, but liking something isn’t always an indicator that it is the best investment, becoming an investor comes with the homework to really dig in deep into the research and find out where you are putting your money. Your personal background and as well as your career can always be an influencing factor of your experience over certain markets over others. Regardless, all investments, like purchases must have the necessary research done.
4) Honesty is the best policy
It all comes down to being realistic and honest with yourself about what kind of investor you want to be. Are you looking to become a long-term investor, or are you seeking quick returns and cash flow right away? What are the quantities you are willing to invest, or the maximum check you would invest? Decide what are your limits as well as restrictions, don’t invest just because everyone else is doing it, but rather because you have studied it and decided it’s a good fit for you. By deciding what type of investor you want to be, you can better research and diversify your portfolio to fit the right kind of opportunities.
5) Be patient, results take time
If you don’t think you have the patience or tolerance to watch over your investments, then maybe this isn’t for you. One of the main disadvantages of investing is that it’s typically slow moving and results are not quick. You will definitely experience the highs and the lows of investing because it’s a roller coaster of changes. Beware of that from the get-go and you will handle your investments better. Don’t panic when you see falls in your investment. You have to remember that investments have volatility and can change in a matter of minutes from negative to positive, and vice versa. Don’t try to be like the active traders that are in-and-out of their investments, because ultimately you have to focus on the long-term gains of your investment and maintaining a balanced portfolio.
At this point, you may be wondering how Housers plays into all this. Well, easy, here at Housers we specialize in welcoming first-time investors by allowing people to access a market that could otherwise be inaccessible to them. Housers allows investors to begin with an investment of 50€ to begin learning about the world of investment. So if you think you’re ready to become an investor, or you already are and want to expand your portfolio, head over to Housers.com and check out the latest opportunities available for investment.
To read more about the investments at Housers, or learn about the different opportunities of investment, head over to our blog.