How to make money: 11 tips to learn how to invest your capital

how to invest your capital

Would you like to invest your money but do not know where to start? We offer you a series of considerations that will help you to analyze which is the best option.

Investing is not a luxury of people, but a quality that feeds on patience, discipline and diligence. You can perfectly increase your financial resources if you set clear goals, mark a frequency to feed the investment and choose the appropriate mechanisms to carry it out. The easiest way to start an investment is the snowball effect, which proposes saving small amounts to make them an important economic boost. Discover how!

What is an investment?

Investment is directly related to saving. An investment can be the purchase of a good considering its resale value or its productive value (the money you can generate thanks to what was bought). We also talk about investment when we place a sum of money in an economic activity with the purpose of obtaining a return, or profitable return, of the benefits that derive from that activity. The premise of gold is that you must invest only the extra money or small amounts that do not influence your daily economy. Financially, it is not advisable to risk more than you are willing to lose.

how to invest your capital
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How to start investing?

1. Analyze available resources

If you have enough money in your savings account to cover you for six months, then you can invest in the long term and raise objectives on a larger scale. Instead, when you generate less savings you need to evaluate how willing you are to lose part of it. The goals will be less ambitious so as not to lose the stability of your savings.

2. Considers profitability and risk

The return or return is directly linked to the level of risk involved in an investment. If you aim for a high return, then the risk will be greater than if you decide to start small. The choice will depend on the goal you want to achieve.

3. Define your goal

It is different investing money to pay your studies to invest to pay for a trip. As a result of your goal, you can take more or less risk. Be sure to delineate your goal to see how much you could lose.

how to invest your capital
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4. Investigate fees for money services

The investment involves an expense because it requires time. The banks and savings plans charge fees for the provision of services, like any other company. You will need to find out what costs the system you have selected to invest involve, so you make sure that a failure in the plan does not end with the profitability you were going to receive.

5. Select the system that best fits your financial objectives

Sort about the different plans and accounts offered by your bank to establish which fits your goals but mainly, your economic reality. Remember that the investment starts from extra money, not from a need. Usually an instant cash account does not involve big changes in your economy and you can withdraw money when you want it, so it is considered a safe investment if you have the perseverance necessary.

You may also like to read another article on heygom: Where to invest in 2017?

6. Ball of snowball effect

Study your salary in relation to your daily expenses to analyze if you are able to set aside a small sum each month. For example, it analyzes if saving 3% of your salary implies economic obstacles in your day to day. Being consequent, you will get a snowball in a few months – small proportions that become a considerable sum – and perhaps you have managed a better administration that allows you to increase some percentage point of savings. Of course, the higher your income, the higher the percentage you can invest.

7. Stand firm

When investments give the expected results, even in small proportions, the temptation to withdraw money from the system in which it was placed to reach its profitability is generated. Stay firm with your decision and avoid using the money invested for other purposes, at least for a considerable time so that it does not affect the growth you are experiencing.

how to invest your capital
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8. Be patient and constant

The lack of immediate results frustrates first-time investors who want to see their evolution in the short term. The investments require a long time to achieve significant impact and a great deal of perseverance. So do not raid the world of financial profitability if you lack patience and perseverance.

9. Make a rhythm

Making contributions with an established frequency will help you achieve the consistency you need to slowly accumulate money. In addition, it is essential to follow the direction of your initial goals. Maintaining sound decisions instead of permanently changing your goals is the key to ensuring your resources increase as much as possible.

10. Avoid debt

Using money, you do not physically own to start your investment can generate the opposite effect and the potential increase in your resources will become a debt. Any investment has a component of uncertainty, so study your resources and find out the available mechanisms.

11. Diversify your resources

Distribute between different products and asset classes the money you want to invest. In this way, if an investment does not yield the expected results you will always have a plan B.