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Investment

Protect yourself as an investor

Do you want to invest a larger amount of money that is idle in your bank? Before investing, answer a few general questions.

When investing, in addition to the amount of potential return and the duration of the investment, it is also important how much money you want to value. This is also related to your current and expected financial and life situation. It is not very good if you encounter an unpleasant event that can result in the cancellation of the investment position. Read also: Transforming a savings bank into an investor

The basic lesson of the investor is that he can only invest so much that he is not unnecessarily endangered financially.

Avoid investing all your money in investments. Likewise, do not anticipate revenue that you are not yet certain about, in this case credited to your account. It is similar with the value of the underlying assets, which may easily fall below the acquisition value on the last day before the planned termination of the investment. Some of the risks can be minimized in advance or eliminated altogether. Also read: Assessing savings: A slow and fast alternative

We have selected four basic areas that you should have mentally mastered so that your investment does not take the wrong direction.

Liabilities

Housing loans, leasing, consumer loans. This is just a small list of loan products, according to which to decide how large a financial reserve to hold or to keep a sufficient reserve for an extraordinary mortgage payment, or to have sufficient funds for the initial amount of the mortgage.

Reserve over gold

The standard amount of the financial reserve should be three times the monthly expenditure. Novice investors make a beginner’s mistake in not keeping the minimum reserve and investing all their free money. I solve the complications by selling all or part of my investment. Forced sales of securities can in many cases mean a loss.

Why are you investing?

When investing a larger amount of money, it is good to clarify the reasons why you do so. One of the solid goals may be a pension. If you have more than two decades to retire, the right choice of investment strategy can bring you high surplus value. At the same time, it is necessary to maintain regularity and a certain financial discipline and be resilient to losses.

Future expenses

In this case, future expenses mean, for example, the arrival of a child, the acquisition of new housing or, for example, a car. When it comes to plans over a horizon of units of years, be sure not to spend money. It is better to keep them in a savings account or term deposit. Deposit products will maintain their fair value in the short term.