Contrary to popular belief, saving and investing are not the same thing. Savings are used to meet immediate needs and emergencies while money invested are used for long-term goals. Here are a few questions you must ask yourself before entering into the world of investing:
- Do I really have the money to invest? Examine your financial status very carefully. How much money is coming in, and what are your financial obligations, and how much is left over? Experts recommend that you set aside a reserve fund of three to six months take-home pay to handle emergencies. That money should be safe and liquid and pay you the highest amount of interest. Consider adding up all what you can invest, have you adequately met all of your insurance needs?
- What are my goals? Assuming you want to buy a home or take a long vacation, or you need to accumulate money for your child's education or maybe retirement income is a major concern. You must prioritize your goals, put a price tag on each, and establish time frames for goal attainment.
- How comfortable am I with risk? Surveys show that many of us think we can handle more risk than we actually can. In general, higher-return investments require more risk. So be sure you are ready for this before investigating investment options.
- What investments should I choose? The list of possibilities is long and wide. Fortunately, there are many forms of media available to answer this question. You must educate yourself about your money. That will be the single best investment you can make in your future. Never put your hard-earned money into an investment idea that you do not fully understand.
- Who should manage my portfolio? You can go at it alone or seek out, and pay for, the services of a stock broker, financial planner, tax planner or a combination of money professionals. Even if you prefer to make all decisions by yourself, you may still need to go through a brokerage house to buy particular investments.
This article has been submitted in affiliation with http://www.StockBee.Com/ which is a free online stock ticker quiz.
