What would you do if you could make millions with a 1 shot investment on 2010?
Well, I'm going to tell you what you should do...
WAKE UP!!!
Investing is not for everyone. There is no free lunch.
There are several rules to follow if you don't want to end up like a drunk guy after a crazy night gambling at the casino.
If you don't know the rules, you'll fail!
If you know the rules, there is also a probability that you'll fail!
Take Care of Your Personal Finances First
Before even thinking of investing, you need to have clean personal finances.
There are plenty of very interesting blogs about it:
http://www.getrichslowly.org/blog/
http://www.thesimpledollar.com/
http://www.consumerismcommentary.com/
http://personalfinancehour.com/
Invest Money You Don't Need!
Sad to say, but some people have the "gambling" syndrome.
They think they can solve all their problems by investing. Instead of trying to see the bright side of a successful investment, try to see the downside.
Imagine nothing happens as planned and worse, you lose ALL the money you invested, What's next?
Can you pay the bills? Can you eat???
Well, this scenario can happen!
Get Professional Help
Go to your bank. Ask a professional what he/she would advise you.
His/Her first questions (if he/she doesn't know already) should be about your financial situation and your budget. If he/she doesn't do it for you, ask yourself:
Do You Have Enough To Live On If You Lose All The Invested Money?
Next step is to...
Wait
Once you have defined with a professional what would be good for you.
Don't Sign Anything, Say You'll Think About It! You need to take your time!
You haven't started investing yet and you wanna go fast? That's the best way to crash against the wall. You need to really understand what everything means.
Help Yourself Too
If you don't know anything about investments, about the instruments you are investing in, about how the market works... EDUCATE YOURSELF!
As simple as that.
Buy books!
If you don't have money to buy books check online.
Actually if you don't have money to buy books, you should reconsider investing in anything but your personal finances :-)
Read about it, Discuss with people what they think about it.
Go to blogs of experts to see what the professionals are saying about the type of investments you are interested in.
Start Small By Making a Test
Take the maximum amount you can invest without impacting your life and divide it by 10.
You are certainly wondering what's the point?
Well you certainly think that you gonna limit your profits to 10% of what they could be.
But I can tell you that once you have read all the books and blogs we were talking about,
once you know what you are doing, you'll see that you limit your LOSS to 10% of what it could be.
Repeat The Test As Many Times As You Want
Big profits are not what you should run for.
You should simply seek at investing small amounts, that you can control, don't go crazy when the markets do, be as insensitive as possible (this is where the "money you don't need" is important) to make rational decisions.
It is more valuable if you make 1$ of benefits 10 times in a row, that 10$ of benefits in 1 shot.
In the first case you know what you are doing, you are investing, not gambling.
Seek For Mid/Long Term Investments
Day trading is not a game you want to play.
Once again don't see it like "I can make in 1 day what I make in 1 month", but see it like
"I can lose in 1 day what I make in 1 month".
Does it sound as attractive?
Cash Out Your Benefits
Do not re-invest your benefits all the time.
Cash out and ENJOY!
Set a rule.
Say every 6 months you take your benefits and either put them on a special account or spend them for extra pleasure with your family. You earned it.
If you found this blog interesting, you might want to read
https://www.finextra.com/blogs/fullblog.aspx?blogid=3517
(Original post http://b32trust.blogspot.com/2009/11/some-people-cant-resist-chocolate.html )
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