Start as early as you can in your investment game. Time is a great multiplier. If you make sound investments early in your life, you are sure to make some money later on with no exceptions. The rules here are rules of investment that help you make more money and grow your investments hundreds of time multiples.
These golden rules of investment are no secret. they have been around in business families for ages and they hand down to each other generation after generation. Knowing them is first step. real gold lies in following these golden rules.
1. Never Be Afraid of Risk
One of the biggest mistakes investors can make is allocating too much of their investments in cash or bonds. A good rule of thumb is to subtract your age from 100. Allocate that % of your portfolio to stocks.
2. Never Invest All In Your Employer’s Stock
If you can get stock in your company subsidized, by all means invest as much as you can. That is free money. But don’t overweight your portfolio with company stock. What happens if your company goes under? Not only is your job income gone, but your investment portfolio is shredded as well.
3. Start Yesterday
The difference between starting at 20 vs. 25 or especially 30 is huge in the long haul. Developing smart investing habits now vs. later in life pays out exponentially in the future because of the "magic" of compounding returns.
4. Financial Advisor is Your Worst Enemy
Your financial adviser is not your friend. He or she may actually be your friend, but their first responsibility is to managing your investments. If you choose a financial adviser, know exactly how he/she gets paid and exactly how much of your money they are getting. Every dollar they get is a dollar less what you could be investing. Ideally, try to ditch the adviser and learn the basics of investing yourself.
5. Best Investment Is In Yourself
Running your own business is risky. It’s also one of the best ways to achieve financial freedom. Start a side-project in the evening while you keep your current Job. Starting a business has never been easier or cheaper. Heck, a personal loan borrowed through Lending Club can even help you fund your idea.
6. Think Long, Act Short
You don’t need to check your investments every week. A quarterly checkup is a good idea. Focus on the long term, and remember time is on your side!. but it is a good idea to minimize losses by ditching stocks that will be toxic in long term
7. Max Out Retirement Plans
Never pass up free money. If your employer matches retirement funds by all means take advantage of it. Again here, the earlier you start the better.
8. Automation is Key
Automation is the key. Set up all your investments in a way that they get deducted automatically from your paycheck or your bank account. If it’s not automatic you’ll make excuses and not put away as much as you should.
9. If You Don’t Understand It, Don’t Invest In It
Complex options, annuities, oil wells, currency, any "investment" that you don’t understand completely should be avoided. but that does not mean that you should not try to understand them. If you can grasp them you are better than 90% of all investors…. you will have an edge.
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This is nice detail by you , your are writing from heart.
Thanks
Indu
http://shaktibanna.blogspot.com/
It must be how you laid this article out that caught my attention.
Great article, great job =)