6 Simple Tips for Better Money Management While Investing
Investing is always scary, especially for beginners. Investing during a global recession can be downright terrifying. That’s why using common sense is more important than ever.
In this article, we will share 6 easy tips for better money management for investors. Many of these hints are also recommended by CNN, Fortune, and Money.
1.Invest on a schedule.
Sticking to a schedule is good advice for many of life’s pursuits. Every month, put the same amount into a mutual fund. You will be able to keep track of your money better. Plus, this allows you to pick up more shares while they are cheap and fewer when they are expensive.
2.Take multiple investments.
Your mother probably told you not to put all your eggs in one basket, and she was right. Diversification cuts back your risk. Of course, you can never totally get rid of risk, but mixing up your portfolio helps.
Please don’t invest solely in company stock. If the company takes a dive, so does your retirement plan. Company stock should be only 10% of your portfolio, no matter how much faith you have in your business.
3.Buy foreign stocks.
This fits in nicely with the second tip on our list. Yes, the global recession has hit the entire planet, but buying overseas stocks is still a smart move. You should invest 20% of your money abroad, at the least.
4.Spend time with other investors.
It’s always smart to pick up advice from other players in the game. If you network with other investors, you can hear about new opportunities early through the grapevine. Even if you live in a remote area, you can join online investing forums, such as OnlineTradersForum.com.
5.Feed your 401k.
Place as much money as you can into your 401k. Your company might match it dollar to dollar, at least to a certain point. Or, they might match 50 cents on the dollar and a percentage of your salary. Either way, you’re getting free money to fund your future retirement.
And please don’t cash out when you leave your job. You’ll cough up a 10% penalty as well as income taxes. Plus, you’ll miss out on tax-free growth later.
6.Don’t make any investments you don’t understand!
It’s sad to think of how many people buy investments or take out credit cards without finding out any of the important details first.
Don’t allow a financial planner, broker, friend, or agent pressure you into buying an investment that doesn’t make sense to you. Ask them focused questions and take notes. If you just don’t get it, skip that investment.
This applies to just about anything, from credit cards to home mortgages. After all, a credit card is a financial investment also, so read the fine print. Do you know the APR? Do you understand how the rewards program works? Good money management is all about staying informed.
Yes, many of the above tips are pretty obvious, but as French author Voltaire famously said, “Common sense is not so common.” Sometimes good investors make bad money management decisions because they’re pressured by other people, in a bad financial position, or just misinformed.
Thanks to Sierra Dawson for sharing some simple tips for better money management. She says your common sense is one of the most powerful money management in your arsenal, so don’t underestimate it!
For more information better read Fisher Investments press to gather great advises on future investment.