More than 50% of people are absolutely financially illiterate. Instead of saving money, saving and investing, they take out loans and borrow money... And then they complain that there is not enough money for anything. If you want to live better - invest! What is investing? How to start investing from scratch? It is worth saying that this is a process in which investing money in assets brings income over time.
What is investing?
Investing is the exact opposite of loans and borrowing. If credit drives you into slavery, then competent investment gives you financial freedom. Everything in your life will change radically if you start investing. Get into the habit of saving and multiplying money, and teach your children to do the same. First, open a deposit in a bank and save 10% of your salary there. After a while, when you know that you have money in the bank and bring even a small, but income, your self-esteem will increase significantly.
Many people are tormented by the question of how to become a successful investor. You will definitely not hear a definite answer to it. Each person has a different income, and therefore different investment strategies. But they all have one main goal - it is to generate income. Allocate 25% of your savings and choose the right investment instrument for you, having previously determined liquidity and profitability. It is necessary to invest - this is a guarantee of your financial security!
Liquidity.
Liquid assets are those that can be sold (or exchanged for money) at any time. This is of course gold, silver, securities (shares), real estate and movable property.
Yield.
The return on all assets is different, but the more reliable the asset, the lower the return it usually brings. It all depends on your investment strategy, and there are only two options here - either profitability (aggressiveness) or reliability (conservativeness). You choose.
If you have a solid capital, the best investment is stocks. Of course, there are many advantages to investing in stocks (securities). But you need to understand that this is a long-term investment. You definitely won’t have to wait for a quick income or profit. To put it simply, when you purchase shares, you get your share in the OJSC.
You can use the services of a private financial advisor. Yes, it will cost money, but on the other hand, you will be able to navigate normally in exchange matters. Do not rush to take everything at once, buy shares of companies in equal shares, waiting for the onset of a cycle of high profitability. You can also turn to an investment mutual fund, in which the work will generally be done for you.
Investments in PAMM accounts. Is it beneficial?
If you do not want to invest in stocks, then you can use PAMM accounts. What it is? First of all, this is the so-called trading account, which is managed by the trader. In particular, a striking example is the Forex market. You can also call such a system of investment trust management. If you choose a good platform, you can count on income, and the management system does not allow traders to use your money, protecting investors from scammers.
When investing in PAMM accounts, one should not forget about diversification. This helps to achieve maximum efficiency. It is better, to reduce risks, to work simultaneously with several managers.
Many beginners begin to worry, fearing that they will simply be deceived. However, it is not. Every broker who works seriously is required to have a fully transparent and public rating for their potential investors. Such monitoring allows the investor to allocate his resources efficiently and without threats. Before working with an investor, a public offer is concluded, and the profit is withdrawn, as a rule, once a month.
This is a more profitable investment than working with banks. Let's say a deposit in a standard bank brings an individual about ten percent per annum, and on a PAMM account, along with a talented trader, you can get.
Bank deposits
Let's talk about such a familiar way of deposits as deposits in banks (deposits), which are familiar to all Russians. Standard bank interest covers inflation in the country. The average interest in our banks ranges from 6 to 10% per year. You won't make much money on that percentage. However, it is necessary to keep a deposit in the bank, not so much for income, but for a stash for a "rainy day" (reserve).
Choosing the best investment method
Any investor independently chooses an investment portfolio and profitable instruments for it. We have already talked about buying shares, talked about PAMM accounts. But you can still invest in profitable business ideas or start-ups. It also happens that organizing your own business requires a lot of effort and time, which is simply not enough. Therefore, you can become an investor with the allocation of a mandatory share with a high yield.
An old and proven way to make a profit is to invest money in real estate. Of course, if you have such serious funds. Even an apartment taken on a mortgage pays off after a certain time, if you rent it out. Many people simply buy a home and rent it out or make money from earnings based on the difference in resale prices.
Investor Mistakes
The maximum benefit in investment is built on the minimum number of mistakes made by the investor. You should not buy any shares or trust the management of your PAMM account to the first trader you come across. Most often, beginners simply do not have enough start-up capital and investment experience, so it’s better to save up, but don’t give away the last and gain experience.
You should never aim for huge amounts. At the first stages, you simply will not get them. Minimal risks with relatively reliable returns are approximately 12-15% per annum. And it should be comparable to the interest rate on. Trading is especially difficult to understand. Indeed, trading on the stock exchange seems to be something alien and incomprehensible for a beginner. Without experience, you can drain the deposit very quickly. Therefore, carefully study any information, since it is always available on the Internet. And still try to invest, albeit in a small amount. You do not need to use loans or consumer loans for investment, as there will be risks in any scenario.