Many people put off investing because they think it’s too complicated or that you need thousands of Rands to start. Taking the first step can be challenging. The key to building wealth is by developing good habits – like putting away money each month. It’s the little things that often make the difference between a life of prosperity and one of financial uncertainty. The sooner you start, the better!
Develop the right mindset
When it comes to investing successfully, developing the right mindset is critical. Investing is a long-term commitment – not just a passing fad. Decide what you want to achieve and then stick to your plan. If you make saving and investing money a habit now, you will be in a much stronger financial position down the road.
When it comes to your finances, do you have a 5-year goal? Perhaps you’re saving up for a down payment on a house, or planning up for your child’s university education – whatever your goal, it’s important to plot out a plan. Creating measurable goals will help you keep track of your finances and your investments – and will allow you to change direction when you need to.
Research your options
Do your research. With so many options available, deciding on the right investment opportunity can be daunting. Get in touch with a Financial Planner who will explain the different options to you. Choosing the right option will depend on your investment strategy – whether you want to preserve your money, or grow it. Different strategies will also have different risks attached. A high growth investment opportunity might be high risk as well, which means that your returns might be above average in the long term.
Learn the lingo
Start educating yourself around key terms such as inflation, interest rates and compounding interest. Understanding the lingo will empower you to make smarter decisions. Make a habit of reading financial publications and websites. Sign up for newsletters from websites such as Fin24.com or Moneymatters.com. Information is readily available and at your fingertips.
Don’t procrastinate. It’s easier than you think! With a bit of information, you can become a savvy investor.