By Eddy Montilla.
Depending on the level of their finances, when it comes to investing, most people take one of these two paths: a high-risk, high-return investment environment or a low-investment, high-return method called lottery ticket. In both cases, they expect that by a stroke of amazing luck they will become rich. However, in most cases, they end up with different luck, something like the same as a turkey on Christmas. Let’s see some ideas that will not make you a millionaire overnight, but at least will put you on the right track and, above all, will keep you away from serious problems.
Step 1: Start with your own money (savings)
I still remember the day when brother told me that many Americans are rich because they use other people’s money to invest while they keep theirs at the bank. He is not wrong, but he is not right either because the United States also holds the dubious honor of being at the top of the list of countries by foreign debt (the total debt a country owes to foreign creditors), which means that someday, believe it or not and even though a lot of generations will have to pass first, that country will crash economically in a way that nobody would have imagined before.
If you are reading this, it is because you have neither the experience nor the certainty that you will succeed in investments. Then, why are you going to run the high risk of going into debt if you are not absolutely sure you will succeed? To take a loan for your first and new project of investment is tantamount to putting a dagger to your throat. Avoid problems and start your business with the things and savings that you have (few or many). If you win, it will be all yours, if you lose, the hit is painful, but you can survive. Besides, there are dozens of stories on Internet of rich people who started their business at their houses or with low investments, for example. Use them as role models.
Step 2: Make a gilt-edged investment all the time even though your profits could be very low
The main reason for which a lot of people failed in the past when investing was their lack of knowledge and information. Today, it is their lack of patience: They want to see profits on their first or second day after their investments of money. They get nervous after a week and are thrown into a panic a month later. This modern society policy on money has undoubtedly bad influence over this point and leads to mistakes since it pushes people to go for quick actions and very effective results in a short period of time.
In general, a gilt-edged investment provides low profits, but what is truly important is that you are winning and making money. Steady growth at a slow pace is dozens of times better than risky business decorated with promises of being rich overnight. Besides, the key is not the amount of money you get from certain business, but your ability to repeat dozens, hundreds or thousands of times the same or similar action (business) until you get your goal. One dollar might be meaningless for you, but it reaches a significant figure when it is multiplied by 1000.
Step 3: Invest in things related to needs
To go to a restaurant on weekends is something optional, but it does not turn out to be the same when the matter is to eat food, to drink water or to sleep with a roof over your head because these things are pressing needs. When you invest on them, you really have good chances to succeed. Depending on the amount of money you have to invest, you can go from a simple hot-dog stand, for example, to a small supermarket, from a room in your house to rent to apartments. Food and rent are and always will be two excellent markets to invest for a very simple reason: They are priority things.
Step 4: Invest in things you know well
Good investments are a matter of good administration and knowledge rather than like or preferences. We live in a society dominated by information and technology. However, the latter is just a platform. It is your ability to get the information you need to know the market in which you are investing and your ability to be the first in handling information related to buying and selling that tips the scales in favor of yourself.
Step 5: Adjust your budget for projects of investments to the profits coming from your business
You have probably read similar stories before: The small company is growing fast and it has decided to extend its radius of action by taking a loan. Things do not go well and now the company owes a debt that cannot pay. They’ll have to start now not form zero, but from minus because of the loan. To avoid such situations, any expansion of your business should be done by using some kind of special economic fund created from your profits.
Any investment is infallible in the same way that any business is risk-free. However, if you handle your investments in the way we explained above, you will be armored to resist any contingency. Finally, do not forget that to invest money with the only idea of being rich is as sad and useless as a dry river. Invest in things to make money and invest in happiness too by making the life of those who are working with or for you better and later, extend your generosity to others in need. Your happiness and somehow your money too, will grow for years.
This article was originally published in the digital newspaper World And Opinion.
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