We’re back for another segment of financial planning and today we’re going to focus specifically on how to invest your money. Investing is not rocket science, contrary to what many financial advisers might tell you out there. When you think about it, it makes sense for financial advisers to try to “mystify” the process, because by so doing they can attempt to justify their fees,.
And, it doesn’t cost a lot of money necessarily and anyone can do it as long as your smart about the decisions that you make. Now, having said al that the opposite is certainly also true – I have seen a lot of people lose a lot of money, and the ones who lost all of their money are the ones who took big risks.
90% of people who invest their money with one company or who invested with the high FI interest stocks, they last, and you don’t need to lose. We all have a day job that we do and that helps us earn money and it help us grow well for the future. Your investments should be something you put on auto pilot. They are there for the future. It could be argued that if you cannot afford to lose any investments, you should not be investing in the first place.
And, I’m going to show you how to easily invest your money without costing you a lot of money. Now, one thing to look at is the example of having a diverse portfolio. What I mean by diversing your portfolio is investing a little bit in a lot of different things. And in this scenario we have $100.00 invested and in the first year, and the second year, and the third year, and the fourth year we’re earning ten percent a year. So, you can see at the end of four years you’re at a $146.00 so you’ve earned roughly 46% on your money by just earning ten percent a year. Steady growth like this is wht you should be aiming for – this is the kind of growth which will help fuel a good, stable future for you and your family, where you are not dependent on high interest borrowings like overdrafts, credit cards or even loans from pay day loan companies to get by.
Now, you compare that with taking risky investments and you invest $100.00. Let’s say in your first year you lose 50% of the value of your investment. So, in year two you’re at 50%, even if you earn 40% for the next three years you’re still not going to be close to how much you would have earned if you were just doing ten percent. And, my point is this, the risk is what kills people when they’re investing in risky investments, it’s investing where you have low volatility, low fluctuation, and consistent returns over time that help people create their wealth. So, now that we know this, lets figure out what type of investment makes the most sense for your situation