A profitable investment of money – the two most proven ways
The experience of millionaire investors is a profitable investment that works. Where does competent investing begin and why the rich are not in a hurry when it comes to investing.
Invest in yourself. A profitable investment without risks is knowledge. This is not our idea. The fact that investing in your own education and health is the first step to increasing your income was publicly announced by Bill Gates and Warren Buffett.
Now let’s imagine that this step has already been completed. You have invested time and money in self-development and learned about how financial instruments work, as well as the risks associated with it. It’s time to move on to practice.
Profitable investment of money, option number 1 financial pillow
If you do not have a monetary base, millionaire investors strongly discourage (and even prohibit) investing. But you should not despair. To fill the “financial pillow" open a bank deposit first. This tool will help you raise money for a rainy day. And if that day does not come, you will have time to invest this money in a profitable and traditionally risky enterprise.
How to measure your financial cushion
Calculate the amount you need. Calculate how much money you and your family as a whole spend in a month and multiply this figure by 6. This is the formula by which the “stuffing” of a standard financial pillow is calculated.
How to "stuff" a pillow?
If you don’t have the equivalent of 6 months of monthly income on hand, you can start saving part of your salary in a bank account or sell some property.
Let’s say your monthly income is 50,000 🪙. In order to become an investor, you need at least 300,000 🪙. If you have a source of passive income (monthly receipts of money into the account without any effort on your part, for example, from renting out housing), you can open an account and save money from your passive source for interest on it.
Profitable investment of money, option number 2 risk control
Remember how we mentioned risks at the beginning of the article? This is the main "problem" of the investor at any stage. Before investing in a particular enterprise, first of all evaluate how much you will lose if something does not go according to a positive scenario. And only then analyze the possible income. The main mistake of novice investors is that they do exactly the opposite.
Haste and greed are not the best colleagues in working with finances. First about risks, then about profit. Do not confuse.
Do not overestimate your capabilities and do not strive to immediately achieve results. This is especially true for aggressive investing. Try to start with conservative tools. Investment is not a roulette, it is a science. To achieve professionalism here, as in any business with numbers and analytics, you can only move from simple to complex.
- Don’t invest in something you don’t understand.
- Start with small amounts. It can be $100 or $1000. It all depends on your stable budget.
- Another fatal mistake that will most likely make you bankrupt is borrowing money at interest and pulling off some quick deal that promises a super-high income.
- Never borrow more than you can give. Try to get rid of the habit of borrowing money. It is not characteristic of successful investors.
Enough information to get started. We will also turn to the topic of investment – it is extensive and interesting.
In the meantime, review your monthly budget. Think about long-term investment projects and most importantly – do not rush into anything. Millionaires are never in a hurry and therefore they notice profitable deals and use the opportunities that come up to their maximum benefit.