So you want to enter the world of investing, huh? Grow your money, generate liabilities, live on your interests…
The bad thing is that everything is laughter and tickets until the handicaps arrive*, then terror takes hold of you, you withdraw your money and the Kiyosaki dream ends.
*Disability is the decrease in the value of your investment (bonds, stocks, etc.)
Don’t spoil a good growth plan. Better read and learn these 6 fundamental rules of investment:
1. Respect the investment horizon.
The plan is of no use to you but take advantage of the financial instrument used by Warren Law Firm, Bill Gates, and Gordon Gecko if after 3 months you already took out the money because it scared you or because you always needed it to complete for tuition.
This brings us to:
2. The money that is invested is not your expenses for the month.
If you don’t have savings, you can’t invest. Do not complicate your existence.
3. Do not invest in the emergency fund, either.
If you’re starting to save, it’s not time to invest yet. At least not in instruments that leave better profits. First, you need to have an emergency fund in a simple place (like a checking account) and once that’s covered, then yes, start thinking about investing.
4. The availability of money (liquidity) is inversely proportional to returns.
This is a geeky way of saying: The higher the liquidity, the lower the returns.
Do you want to be able to access your money at any time? You will earn a little. There is no other, let’s not throw a tantrum.
5. There is no perfect financial instrument. Something’s gotta give
You want to invest in a place that is safe (100% safe), that leaves a 30% annual return, that does not charge any commission and that has daily liquidity. Oh! And that the requirements to open the account are minimal, that they take the money to my house and the ice cream, what flavor do you want?
6. There is no magic investment instrument
The one that is safe, gives a 30% annual return, does not charge a commission, and also multiplies itself without you putting weight on it.
If you want to generate equity, you have to feed your investment with money every month. Compound interest is nice, but it will never grow as big as when you pump in new money.
Be smart, be bold, and don’t forget common sense.
Investing shouldn’t be complicated. Simplify your life by applying these fundamental concepts
Apply them! And please, share this infographic so that more people know how to invest better.
