Invest Only Of What You can Afford to Lose

I read this blog from: http://affleap.com/invest-only-of-what-you-can-afford-to-lose/
and thought it might be worth sharing.



The reason why people invest is that they wanted to improve their lifestyle, with the hope of achieving financial security.

As an investor you need to acquaint yourself that in investing of any scheme, it takes a lot of patience, a careful planning and the courage of how much money you can afford to lose if in case your investment would not turn out to be successful.

The reason, why this is very important because if you have this kind of approach, quitting is surely is not your option if in case you have failed in your first investment.

Nevertheless, such failure is not the end of the world to you, but it would be a brainstorming lesson of why you fail. There must be something wrong along the way that you have done that needs to be rectified.

Anyone can make a few investment mistakes but the biggest mistake that one can do to himself or herself if ever he or she wanted to become a successful investor is not to invest at all or to put off investment on a later time.

Why not adopt the mindset of those proactive successful people, that they cannot afford to wait for tomorrow of what they can do for today. Besides tomorrow is another day and surely that ‘later time’ would never come.

It’s a wrong concept or perception then, to even consider that in investment, you need a big capital to start with. It’s a normal procedure to start small to muster and get familiarize the a to z of your investment. Make your money work for you – even if all you can spare is $20 a week to invest!

Putting off investment until later time and waiting for the opportunity that you are in the financial position to do so is another wrong notion. Why not start small but then think big. It’s a healthy sign of your optimism to succeed. To maintain that positive approach of your investment, herewith, are some pointers of what you can do to improve your cash flow before embarking of any investment :

*** Get your current financial situation in order first, and then you can start investing.

*** Get your credit cleaned up if there’s any, pay off high interest loans and credit cards, and put at least three months of living expenses in savings. Once this is done, you are ready to start letting your money work for you.

*** Don’t invest into a get rich quick scheme. That is the riskiest type of investment that you can make. Don’t be hyped with lucrative returns, it’s part of their strategy in enticing would be investors.

Instead, invest for the long term, and have the patience to weather the storms and allow your money to grow. Only invest for the short term when you know you will need the money in a short amount of time, and then stick with safe investments, such as certificates of deposit.

Diversify your investment, you don’t have to put all of your eggs in one basket. Spread it all around in various types of investments not only for best returns but for safety and security as well.

If you are in the stock investment, you need to monitor meticulously the trends of your invested stocks on a daily basis and don’t move your money around too quickly. Let it ride for a while. Don’t panic if the stock drops a few dollars. If the stock is a stable stock, it will then go up after it goes down a bit.

The similitude of investment is just like nurturing a plant , it needs a lot of patience and a commitment to watch it grow. You are committed to yourself that it grows well, healthy and stable, so that someday you can reap the fruits of your labor and sacrifices in return