Investing Money for Beginners
Before you dive into any sort of investing, there are some important items you need to know first before doing anything. These are not tips for how to get started, more of a checklist of things to understand.
You Should Have Money Saved First That’s Not for Investing
This is what you’d call an emergency fund or your “rainy day” fund. Build these up first, typically 3-6 months of expenses (I aimed for 6 – 12 months), before considering investing.
Get Your Investing Literacy On
This does mean spending some time reading books and other trusted publications a bit each week. But if you have no background at all with investing money, this is probably the most important item.
Pay Off High Interest Debt Before
Many credit cards have 20%+ interest rates, which no investment will beat. Instead of pro-longing this debt and trying to invest, just knock it out.
Only Risk What Won’t Crush Your Finances
It’s okay to be on the aggressive side if that’s your path, but understand the stakes and ensure you won’t be left with nothing if something happens.
Getting Rich Overnight Should Not Be Your Priority
We all want to get rich overnight. Can you imagine? Ah, how exciting life would be! However, it is the wrong mentality to have when you are investing money. Sure, sometimes a big investing win can happen, but it’s rare.
It’s Okay to Make Small Investing Mistakes
Even the best investors in the world make mistakes from time to time. The goal is to ensure they are only small mistakes, which provide great learning opportunities and lessons.
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