Whether you’ve just won the lottery or you’ve decided your savings account isn’t living up to its potential, investing is a good decision. As a first time investor, your best option is probably to go through an investment firm – they know what they’re doing and have good reason to make sure your money grows. There are, however, still a few things to keep in mind.
Do a Thorough Background Check
Choosing an investment firm isn’t as simple as googling the nearest office. When you’re entrusting someone with your money, their reputation is important. Do as much research as you can into the company’s history – how long have they been around, are they reputable, and do they make good money for their clients? You’ll also be looking at the percentage of earnings they take, but this won’t be as big a factor.
How Much are you Investing and do you Need it to be Accessible?
When you invest, this will be one of the major deciding factors on where you invest your money. If you’ve just received an inheritance, or any other large sum, your first priority should be to pay off debts. The interest you’re paying on debts is almost certainly higher than the interest you’ll receive on investments The next step is deciding how much of the balance to invest, and how much to save.
Typically, investments involve purchasing assets, such as property, shares or foreign currency, which you would then sell to free up your money. They’re also long-term, whereas savings are more readily accessible, sometimes with a term of notice, and more often than not go through a bank. Decide how much money you need to be accessible with fairly short notice, save this amount and invest the balance. Depending on your investment, you could start earning dividends, but this will primarily be on long-term investments and only once you’ve had them for some time.
It’s Your Money
Your investment firm or financial advisor probably has a lot more experience than you, but it’s still your money. If you feel an investment carries too much risk or start to have second thoughts about a recent share purchase, you can decide when to get out. If you really don’t know what you’re doing, feel free to leave it in the hands of the experts, but you should still be doing some research. Keep up to date on share prices, financial analysis articles and exchange rates so that you have some idea what’s happening with your investment.
Deciding to invest is always a risk, but more often than not it’s one that will pay off. Try not to put off investing – every day you wait is potentially a missed opportunity, as the market grows and share prices increase. If you stumble into money, pay off your debts before you invest. Whether you want your investment to fund your retirement or your grandkids’ tuition, remember, you’re in it for the long-term.