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7 Investment Lessons You Should Learn from the Successful Investors

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7 Investment Lessons You Should Learn from the Successful Investors

Investing is a great way to make your money work for you and you don’t need any special degree to learn. Not everyone grows up learning about investing, saving, and money matters, but if you want to learn more, here are some great investment lessons from other successful investors.

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Investment lessons

    1. Ask for Advice From Experts

    You can learn many things by reading books and blogs, but sometimes, talking to someone is much better. A certified financial planner, stock broker, or other expert may be the best option to help you figure out your situation. They can give you advice based on their experience or laws and regulations regarding financial instruments. Even if you have to pay them a small fee, at least you know you will be getting real, solid advice.

    2. Plan for the Worst

    Tragedy can happen at any time. You can get sick or lose your job. Or the value of your stocks might go down. You might even die and leave your dependents. So, you need to plan for the worst. First, before you even think of investing your money, make sure you have an emergency fund, which should cover your bills and expenses for at least 6 months. Next, you need to have a good medical insurance plan that protects you and your dependents. Finally, you need a life insurance policy if you have people who depend on you. The size of the policy should be relative to how many dependents you have.

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    3. Give, but Give Carefully

    Giving to charities, churches, and other organizations is a great thing. These organizations give great service to the community and they help those who cannot help themselves. However, you must give carefully as well. Do not give up all your money, and before you do decide on a giving plan, make sure you have yourself covered first.

    4. Keep Working

    If you are young and strong, the best advice for you would be to keep working. Keep working for as long as you can because you have the best asset of all: time. The longer you work, the more money you have to invest. If you don’t plan to have any retirement income (side business, properties) then you need to work as long as you can, so you can build up your retirement fund.

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    5. Invest in the Long Term

    It’s exciting to see movie scenes where the main characters are on the trading floor on Wall Street, buying and selling and making millions at the turn of a hat. However, the truth is, unless you had a lot of money, skill, and time, you can’t make a lot of money with individual stock purchases. However, something that has been proven is the power of long-term investing. If you invest now in good stocks from reliable companies (or even in an index fund) and leave it there for 20 years, you can have enough time to ride out any dips and still come out on top.

    6. Invest in What You Know and Like

    During the famous Dot Com boom of the late 90s, people asked investing maven Warren Buffet why he didn’t invest in tech stocks and start-ups. His answer? He simply did not understand how they worked and how they made money. While many people think him old fashioned for not getting in on the Boom, this was ultimately what saved him from the impending crash. So, before you invest in individual companies, think of it as investing in a real business. Study the company and how they make money. And if you like the company and actually spend your money buying their products and services, then this could be a bonus.

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    7. Don’t Forget About Taxes

    Any income you earn—including that from selling shares or even other ways, such as payments from when you buy a structured settlement—is taxable. That’s why before you sell any shares or take out money from your retirement fund, make sure you have enough money for the taxes so that your gains will not be wiped out by taxes alone.

    Featured photo credit: Investment lessons via cdn-5.lifehack.org

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    Last Updated on July 20, 2021

    Financial Freedom is Not a Fantasy: 9 Secrets to Get You There

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    Financial Freedom is Not a Fantasy: 9 Secrets to Get You There

    Have you ever considered your life now, and how it would be if you had more time to spend with your family and less worries about money?

    Nowadays, financial stress is one of the most troublesome weights in life. If you’ve ever encountered financial stress, you know the difficulty of not having enough income to pay your obligations or bills.

    Many people say that money is not the ultimate goal of life. While that’s true, money certainly plays a very significant role. The meaning of financial freedom changes with the different phases of our life, but ultimately, it is something that many people strive for.

    In this article, we’ll explain how to capture that financial freedom you’ve been looking for. Read on to learn the secrets to financial freedom.

    Break Free of Your Finances

    Financial freedom is about having a constant flow of cash from your assets to cover all your regular needs.

    When you are not worried about your income, or living paycheck to paycheck, you gain a great sense of freedom. It’s the freedom to be obtain and do what you truly need to make your way through everyday life.

    Gaining financial freedom, though, is a process of growth, making small improvements and gaining emotional strength.

    Though it seems hard to believe, it is really very simple to get financial freedom.

    To do so, you simply need to make sure that your assets exceed your liabilities. In other words, you’ll need to find the sweet-spot where your residuals meet or surpass your expenses. This is something that you can achieve with the proper plan.

    While not every person will accomplish financial freedom, the potential for anyone to do so is certainly there. Anyone can achieve this success, regardless of their income level.

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    Outlined below are 9 secrets that will help you in your goals of achieving financial freedom.

    1. Stop Unnecessary Spending

    We often spend money inwardly, instead of objectively.

    For example, you may spend when you’re anxious, depressed, restless, exhausted, from fear of missing out, or to please others. This is a very unhealthy way to handle your finances.

    To stop this habitual spending, log down all your spending over the course of a month.

    Just as some people keep a food diary, keep an expense diary. Remember not to just write down how much and what you spent the money on, also include the circumstances of why you spent the money. Was it an impulse buy at the checkout line or was it something you planned to purchase?

    This increased self-awareness could enable you to avoid triggering situations in the future when you are considering an impulse buy.

    2. Plan a Monthly Budget

    This is a great opportunity to get serious.

    Take a seat with your spouse or partner and make a monthly budget based on your income, not your expenses. You are never again going to spend more cash then you have on hand.

    Overspending is the thing that led you to more financial obligations. Make sure you decide every month what is coming in and what will be going out and stick to that budget… no matter what.

    3. Cut-up Credit Cards

    Perhaps you are the type of person who always pays your credit card balance in full before the end of your billing cycle, and enjoys the reward points you gain. If this is the case, then you’re already way ahead of the game.

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    If not, you may want to consider ridding your life of the burden that credit cards bring.

    Many cards have strategies set up so that if you make a certain number of late payments, they will raise your interest rate much higher. This can really add up in the long run and you won’t be doing your financial situation any favors. If you’re prone to late payments or have a large balance due on your cards, cut them up!

    Without proper self control on credit card spending and payments, you are basically throwing your money away. To ensure that you have better control over your spending, use only cash or debit for all future purchases (and don’t forget to pay at least your minimum payment on your cut-up cards each month!).

    4. Increase Savings

    There is no doubt that for a comfortable retirement you must accumulate satisfactory savings throughout your working life.

    It’s good practice to save up to 15% of your income.

    Start with your workplace 401(k), if you have one. If not, a Roth IRA (if you are eligible) or a traditional IRA (if you are not eligible for the Roth) are the next logical steps.

    Increase in longevity means you might be able to look forward to 25 to 30 years in retirement, or possibly even significantly more. Investing now in good retirement plans will ensure that you have a guaranteed a stable monthly income when the time comes to stop working. [1]

    5. Invest Wisely

    Consider investing in funds.

    Specifically, you will gain higher returns if you invest in different types of mutual funds such as Debt funds, Equity funds and Hybrid funds with a proper balance, although it absolutely relies on your personal preferences and sense of risk taking.

    To get the most of these benefits, make sure you are investing in a variety of assets. Another resource of investing in mutual funds is SIP (Systematic Investment Plan) where you invest some money every month in funds. SIP works by averaging the per unit price of the stock.

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    Mutual fund investors are aware of the benefits of an SIP (Systematic Investment Plan). For one, it is the most secure way to invest in equity mutual plans so that wealth is created over a long period of time. This plan also helps you to gain a better sense of financial discipline, which will come in handy in all your financial endeavors.

    6. Invest in Gold

    There isn’t really a better way to invest in gold than to have the physical gold itself in your possession.

    You can purchase gold coins and bars from mints as well as from coin dealers and other private sellers.

    Another way to invest in gold is through ETFs (Exchange Traded Funds).

    These are is similar to mutual funds but they are exclusively investments of gold. ETFs are great because they offer more liquidity; the ETF owns the actual physical gold, stores it, and retains the value of the shares. These shares can then be bought and sold in the stock market, and one big benefit is that the transaction costs of gold ETFs are much lower than the that of physical gold.

    With its consistently-increasing demand, investment in gold can be very wise long-term investment to make.

    7. Stash Emergency Funds

    Whether it’s a cash gift or a work bonus, always try to save any extra money that comes your way rather than making unneeded purchases.

    If you get paid every other week, you’ll get an “extra” paycheck (three rather than the usual two) twice a year. Either save those paychecks towards your emergency funds or utilize the money to pay down other obligations, such as loans, credit cards or other debts.

    Make it hard to get your cash.

    Put your savings in an alternate bank, maybe an online bank that forces you to delay for several business days before transferred money hits your regular bank account.

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    8. Find Fabulous Mentors

    Find a mentor, such as a friend or family member, who has exceptional control over their finances and pay attention to everything they do.

    If you do not have any friends or family that are enjoying financial freedom, then find a mentor online! There are numerous blogs and guru websites featuring the advice of many people who have reached financial freedom, and they exist primarily to let you in on how to achieve it for yourself.

    There are also plentiful forums available that share tips and tricks on how to best achieve financial freedom. Read as much as you can and start changing your habits for the better.

    9. Be Extra Patient

    Patience is the key of financial success.

    Being patient can be quite tough, especially when you’re struggling with your finances, but having faith is worth it. You’ll continuously be on the right track if you are taking the proper steps above.

    So don’t be discouraged, even if you are only saving a few dollars a month; it all adds up. Within just a few years you’ll look back proudly at your accomplishments and be glad that you had the patience to get there.

    Financial Freedom for All

    Anyone can achieve financial freedom, regardless of their financial circumstance.

    Use the tips provided above to get yourself on the track to financial freedom and toss your monetary concerns out the window. If you wish to achieve a life with financial freedom for yourself and your family then you must adopt a disciplined approach towards your finances.

    Following the simple secrets above is a great start to making your money work for you, so you can work less and live more!

    Featured photo credit: rawpixel via unsplash.com

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    Reference

    [1] Hartford Gold Group: IRA Retirement Accounts

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