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How to start investing


Getting rich is nearly everyone’s dream. Nobody wants to live all their lives in poverty and begging. You want to make money that is enough for your living without exhausting yourself with a lot of work. Furthermore, you want the money that can support a luxurious living while also meeting all your wants and needs.

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However, the way to getting rich is not as easy as it may sound, mostly because most people find it hard to earn and save their money. Earning and saving are made chiefly difficult because the money you earn goes to paying multiple bills, meeting financial obligations, or even indulging in impulsive buying. However, you can acquire the discipline of saving that will help your money grow. This article discusses how you can do that.

What is an investment?

Investing can give your money approximately a 12% growth yearly, which allows you to meet your financial goals and also give you a good retirement package. For a firm starting point, financial experts might advise you to invest money either in bonds, mutual funds, stocks, or shares.

Though the highest numbers of working individuals have heard about investment, most of them do not get to invest at all. Studies attribute this to a lack of knowledge of investment, and some do not know how to start investing. Additionally, some fear to lose their money in case of financial risk. However, do you know you can invest, right? Below are some guidelines from financial experts that will help you.

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Investment diversification

In the case of diversifying investment, the best rule to follow is investing 2/3 of your savings, ideally long term savings in either stocks or equities. Retirement funds are an excellent example of long- term savings. On the other hand, choose bonds when it comes to short-term investment goals. Additionally, financial experts recommend investors to invest in many companies and not a single company. For example, you can invest in Amazon, Facebook, and Apple. Also, invest in other investment types like forex trading and mutual funds.

Failure to consider investment diversification while making investment decisions is quite risky. An excellent example of this is Enron, an energy company in the US. When the company was declared bankrupt, its workers lost not only jobs but also their retirement funds and pensions since they had invested most of their money in the company’s shares. Investment diversification minimizes risks while also giving maximum potential and growth to your investments.

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Do not fear taking risks

As an investor, you must be willing to take risks. Investing in what people term like “safe” bonds will not give your money maximum growth. Often, safe bonds have minimal interest rates that can even cover inflation only and not give you any profits. Moreover, many companies incorporate conservative investing while dealing with retirement funds to reduce their fees. Financial experts argue that, if you want your investment to grow, be willing to take a risk. For example, if you notice that the pension scheme in your company is low/ conservative, change it by increasing your contribution.

Focus on your charges Don’t give too much attention to your investment and forget your fees. Remember, your charges increase as your returns start and continue to compound. To minimize costs, you can eliminate intermediaries or adopt indexation

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