Some of my friends were asking me on how to invest in stock market. Since, I’m a newbie investor, I don’t know what to say! Really, I’m still learning! All I can say is that before you invest, you have to be financially free!
- Get out of debt
- Build emergency fund
- Get insurance
- And then INVEST!
Now, if you already achieve steps 1-3, and you have extra money, you are ready to start investing. Whatever investments you have in mind, whether it’s a small business, networking business, UITF, mutual fund or stock market, you have to consider these 4 techniques from Marvin Germo’s book “Winning Strategies for Investing.”
- Define a goal for whatever reasons you are putting your money in any investment vehicle. Your goal might be retirement, dream house or car, a business, vacation, education of your kids, etc.
- Make sure that you are only investing excess money that you would not use for any immediate needs like food, tuition fee and electricity or emergency needs. Only invest money that you don’t need.
- Make sure your emergency fun is intact. You never know when emergencies would occur, make sure that you already set aside enough money for emergencies. Ideally 3-6 months worth of your living expense.
- Make sure that you diversify your investments. Warren Buffet advise ““Do not put all your eggs in one basket.” Allocate your investment based on your profile as investor, then allocate accordingly. You may want to put percentage of your money in stock market, mutual fund or UITF. But before investing, study, research and understand your investments.
- Think long-term. Be patient with your investment ROI. Consider regular investing or not withdrawing your money for at least 3 yrs, 5 yrs or 10 yrs
- And lastly, honor God with your finances. Money is not bad, but the love of money is. So we really need to guard our hearts on why & how we invest, we may want to invest to honor God. As we invest, we may also consider giving to those who are in need, this is another form of investment, as the Bible says “give, and it will be given to you. Good measure, pressed down, shaken together, running over, will be put into your lap. For with the measure you use it will be measured back to you.” (Luke 6:38) As we give, our investment can be our storehouses that the Lord can bless so that we can live this life to the full and be a blessing to others.
Now, ask yourself, if your answer is yes to these 3 questions, then you’re probably ready to invest your excess money:
- Am I debt free?
- Do I already emergency fund?
- Do I already have insurance? (health, life, car, house)
If your answer is YES to all these 3 questions, it’s your time to INVEST!
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