The whole idea of investing is, of course, to create income, so while you're out on the football game, hanging with friends or whatever, your money should working for you, rather than you working for it.There are ten golden rules to investing that, if follow, will lead you to great wealthy life and financial freedom!
The first golden rule is get started! One of the biggest reasons people fail to create wealthy life is because they do not understand the power of compound interest as they think to invest just a few dollars, or even putting coins in a vase will never be enough to invest, so why do you bother.
The truth is few successful wealthy people started out by just investing a small amount then watching it grow and thanks to the power of compound interest.The second golden rule is to start when you young! If you invest say, $5000 when you're 25 you will end up with much more money than if you invest that same amount at 40. The main reason is compound interest. Try to imagine planting a seed, then fertilizing it for 25 days.
That seed will grow and grow, spread more seeds and then turn into a big bush! Now, imagine planting the same seed 2 years later and only giving it half the amount of fertilizer. This plant might grow but will not catch up in size to its counterpart. That is what compound interest is like!
The third rule is to have a plan. There is very old, and true, saying: Fail to plan - plan to fail. Always write your plan down, review it all the time and above all, keep your eye on the goal. Property has been a popular form of investment for thousands and thousands of years and with good reason The keys to this are to invest in a very high demand area, do not borrow too much and be ready to hold the property for at least five to ten years. Always look for property in a prime location and that needs only minor maintenance or repairs that you can do at minimal expense to add thousands of pounds to its value.
When buying property, always have an expert check the property for the structural soundness and never buy anything that requires major work unless you have a trades person or builder in the family!One of the best investments for most people is the stock market. When you investing in the market, you are actually buying stock in a company, which then uses the money raised to run its business, expand, pay down debt, or buy another good profitable company.
You can either buy shares through brokers and they will charge a fee or start trade on your own online. The advantage of a brokers is that they follow the market all the time and should know what the stocks are doing. If you trade online on your own, you need make sure always study the market and learn how it works as it can be very confusing. The fourth rule is to get someone to pay off the debt while your asset increases in value. The fifth rule is do not get your emotions attached to stocks: Some people tend to stick with certain stock even know they might not bring them good profit. Sentiment can be for a few of reasons: you had yourself smashed on a company's stock thinking it will do very good but now you are too egotistic to accept your mistakes can retreat.
The sixth rule is do not rush to sell your stock. Hold onto the winners and sell the losers. Consult professionals and then you can act accordingly. Do not let a drop in the stock market after your long-term investment plans. The seventh rule is do not commit very large amount of money: Even if you have a strong believe in risk-bearing capacity, we recommend you do not commit amount of money at this stage. A sharper correction would just leave you bleeding more.
The eighth rule is try to invest in things you know The ninth rule is do not blindly imitate investment decision of others who might have profited from their investment decision. The tenth rule is buy stock if there is a 6-9 per cent drop in market prices. That will offer you a good opportunity to get profit.