Learn to Invest

Return and risk are main concerns while investing financially in things. We have to pay bank fees for money transfers, brokerage fees, and lawyer fees along with inflation and tax, so the return we are getting from our investment need to be reasonable.

These, of course, are all reliant on what you are investing in and how much money you are looking at investing. When it comes to risk the big thing is to be able to trust the organizations you are investing with. Given the recent turn of events with some of the worlds major financial organizations it seems good, solid low risk money are becoming harder and harder to find.

This is where, alongside we all want to have it on easy street, and an investment looks like it could pay us to do nothing, the reality is that we may end up just risking everything we have worked so hard to get in the first place. Therefore the first rule of thumb, when it comes whether or not we want to choose investing as a way to create wealth, has to be "do not put all your eggs in one basket". If that basket drops, you loose all your eggs at once. So, you must expand.

For example, if you had, say 100,000 to invest your portfolio might look something like this: 20,000 trust fund, 30,000 Stock market, 30,000 long term banked, 20,000 property. Not 100,000 long term banked. The reason for this diversification is simple. Some investments pay better than others and you do not want to be tying all your funds up in a long term, low yield venture when you could be making a lot more money by diversifying.

The second rule of investment has to be, for me at least, to do the homework. And if you cannot do that yourself then don't even bother with investing. I am serious. Just leave it up to your local bank manager to earn you the standard 5 - 10 % per year. If you want to make create out of investing you are going to have to become business minded.

Now I don't know about you but I would not be too comfortable allowing anyone else to mind my business for me not unless I understood the workings of it before I left it to go on holiday. And that is essentially what you do when you invest. You "go on holiday", you 'take a break' from your money (business) in the hope that when you come back, six or nine months later, or whatever, that you will be richer than when you left. How else would I know if I was getting ripped off or not unless I knew how my business worked and what I should be getting charged in order to make it work?

Making money has never been an easy game, but that is only because people have deliberately held back the information. Anything is easy when you know how, right?

You see, a savvy investor is also one who knows a good deal when they see one. A savvy investor is always on the lookout for another good, money making venture, especially one which costs very little to get into and has the potential to make a lot. You don't need to look very far to find one, you just need to be able to recognize what one looks like.