Essential things to know about investing
“How many millionaires do you know who have become wealthy by investing in savings accounts? I rest my case.” – Robert G. Allen
Saving your money is always a good habit at any given point of your life. However, keeping large amounts of saved money in bank accounts will not get you to go into that next level of being a fearlessly wealthy person. A savings account will give you a sense of security. But investing that money intelligently will make you a recurring income that will increase and make you wealthy.
One can never be too young to invest. Therefore, it is good to know about the essentials of investing even if you do not have a good amount of money to invest just yet.
What is investing?
First of all, it is important that you understand what investing actually is. This is since it is mostly considered a practice only done by the wealthiest stratum of the society. To put it in the simplest manner, it means putting your money to a certain endeavor with the hope of making additional money. This can be anything from purchasing stocks to putting your money on a fixed deposit. This way your money works for you and grow by itself without you needing to put an effort in it.
Learning the jargon that goes along with investing
If you have not been around finance related work, there are a few terms and expressions that come along with investing that can be a little confusing. Let us quickly go through a few terms in order to make you familiar with the jargon.
Stocks
Stocks can only be described as a small part of the financial ownership of a certain company. By purchasing stocks, you get a certain equity share that you will get paid accordingly as the company makes profits.
Return on Investment (ROI)
ROI is the amount of money you make against what you initially invest. When you divide the amount you gained by how much it cost you, then you get your Return of Investment amount. It is good to know if your investment is generating good ROI. If the ROI is low, bad or even negative, consider changing your investment.
Diversification
This is an important term when it comes to investing since it ensures that your money is divided in a way that minimizes the risk of losses. Rather than investing large amounts of money to a single place.
Process of Investing
If you have never done any major level investments before, it is better to go through an investment firm rather than reaching out to the companies by yourself. Although you have to pay a certain amount of money to the agents, you will be more secure in the hands of an experienced company.
To get the best advantage of the effect of compound interest, it is always good to start your investing strategy as earlier as possible. However, only invest the money that you will not be needing soon. Be updated and follow up on your investments. Do not make a one time payment and wait for the returning income.
Looking for cash to start investing? Borrowing money to invest can affect your profit margins. However if you borrow from the right moneylender, despite the interest rates, you will still be earning extra cash. Always approach a licensed moneylender. Fill in the application form to check if you can take a loan. Or contact us if you need a loan. We provide the lowest interest rates in Singapore.
