Hello all those who are just starting their journey in the world of finance. Today’s article is devoted to the issue of investments, making money by investing with minimal risk, or getting rich by leaning back in the chair and forgetting about pressing problems. Some of you, reading the first paragraph, will say: “investments from scratch result in zero profit.” Well, nobody is going to dispute your opinion …
At the beginning of the journey
Experienced investors are guided by two principles of doing business – organization and management, which are based on psychology and strict adherence to plans. The psychological attitude is important in any work, especially regarding investment, which involves the risk of being left with nothing. The wrong attitude towards investing, fueled by fears or passion, is a major risk factor. If you do not how to start investing, consider firstly the exclusion of risk factors. To do this, get rid of doubts and fears that prevent you from taking a step and starting to earn money.
5 risk factors:
- poor understanding of the investment plan;
- incompetence in matters of a technical nature;
- acute shortage of money to start in the planned project;
- psychological pressure of friends, colleagues, relatives;
- depression, accompanied by disbelief in one’s strength as a businessman.
Get rid of fears
All boundaries and frames are just in our heads. Ask yourself: what prevents me from taking a step into the world of freedom? Misunderstanding of friends or relatives? Do not inform anyone of your plans, and if so, do not ask for an opinion. Remember that no matter what you think, there will always be those considering your ideas a nonsense. Listening to the opinions of others, especially taking advice, you are unlikely to start your business. The first part of the plan on the path to financial independence is the right psychological attitude: the way out of depression and the refusal to receive opinions from the outside.
The key to investor success is a rational approach to business, which includes a financial plan, goals and objectives with an accurate calculation of the return on investment. The basic rules of investing will help you to start earning without risking. While setting goals, drop fears, be guided by rational thinking, in no case give in to emotions. A clear goal is half success and minimal risk.
Calculating the term
One of the most difficult aspects of investor activity is timing. Accurately calculating the project time according to a business plan is difficult even for an experienced entrepreneur. There is a rule according to which the best investments are those that have long-term prospects, but this does not mean that in short-term projects everything is the opposite. In order to better understand the planning of work terms in investment projects, you should master the methods of accounting for financial flows, read a lot of literature on financial literacy. Calculating the time spent in investment projects is the most difficult. Remember, easy and affordable money can be made only in fairy tales.
Cost optimization – a step towards financial freedom
Proper cost optimization is another key to success in investment projects. Inadequately planned financial activities lead to problems and large debt obligations, and we want to warn you against mistakes made more than once by beginners. The first and most important thing in the correct planning of expenses is the termination of all issues with banks and credit organizations. The second is to adhere to the previously approved financial plan. Third, keep records and plan for each subsequent step. If you have difficulties with mathematics, use the investment calculator with reinvestment.
Golden saving rules
Before buying things, whether it’s a TV, a vacuum cleaner or a microwave, think about whether you need this item at home. If it is difficult for you to cope with emotions, just postpone the purchase the next day to fall asleep and wake up thinking about it;
Start a notebook and write down all income and expenses there. Do not like to write? Put the application on your phone and keep an automated accounting of the money you earn and spend every day;
Make it a rule to save 10% from each salary for an inviolable reserve. Under no circumstances lend money, help close friends and relatives, not financially, but with advice and moral support.