Investing Strategies-principles of investing(1)
1. Start Investing Now
We say this not just to discourage procrastination, but because an early start can make all the difference. In
general, every six years you wait doubles the required monthly savings to reach the same level of retirement income. Another motivational statistic: If you contributed some amount each month for the next nine years, and then nothing afterwards, or if you contributed nothing for the first nine years, then contributed the same amount each month for the next 41 years, you would have about the same amount. Compounding is a beautiful thing.
2. Know Thyself
The right course of action depends on your current situation, your future goals, and your personality. If you don’t take a close look at these, and make them explicit, you might be headed in the wrong direction.
* Current Situation: How healthy are you, financially? What’s your net worth right now? What’s your monthly income? What are your expenses (and where could they be reduced)? How much debt are you carrying? At what rate of interest? How much are you saving? How are you investing it? What are your returns? What are your expenses?
* Goals: What are your financial goals? How much will you need to achieve them? Are you on the right track?
* Risk Tolerance: How much risk are you willing and able to accept inpursuit of your objectives? The appropriate level of risk is determined by your personality, age, job security, health, net worth, amount of cash you have to cover emergencies, and the length of your investing horizon.
Posted: July 9th, 2010 under Knowledge of Stock, Stock of Knowledge.
Tags: Investing Strategies, Knowledge of Stock, principles of investing, Stock of Knowledge