Sound Advice on Becoming an Investor

Wouldn’t it be nice to just lie around in the house, watch business channels, read your favorite book, and play golf even on a weekday, maybe? It probably isn’t the most dynamic career, but investors obviously get paid generously if the company they’re investing in is yielding good profits.

Are you saving for a retirement fund (pension)?

Depending on the country you’re in, there will still be options for your retirement plan. In the United States, employees and workers can choose from 401K, 403B, IRA or Roth IRA retirement savings plan. Investing on these is crucial especially in the unsavory times ahead of us. You can invest in both a 401K and an IRA, but do be advised that the 401k is an employer-sponsored plan, meaning you can’t apply for it if you’re a full-time freelancer.

Are you pining for the stock market?

You can apply either for a discount brokerage or a full service brokerage. Discount brokerages are easily the cheapest, intuitive, and the most addictive for beginners, since most of these brokerages are based online, meaning you can access your account anytime, anywhere, and gain total control over your assets. Full service brokerages on the other hand, are the more expensive alternative, but do offer you more soundness for your investment and top-notch communication with their brokers.

Know Who It’s For

Is it for your retirement? Your wife and daughter’s? Or are you just bored and want to try something new these days? It’s apparently the rule of conscience that will decide if you’re going to invest or not. A lot of investors in the stock market had doubts before if they’ll be able to withstand the pressure of possibly losing all of their money (and still be covered in debt) in just a week’s time. It’s also imperative that you have the time to monitor your investments. The stock market isn’t a lottery draw where you just wait for the numbers to be flashed on TV.

Be Mathematically-Inclined

If you’re pondering why you hated math in the first place, it’s mainly because the decimals really had no real-world practical use when you were a kid. In the business world, however, just a change in the decimal place of a share price of stocks may mean tumultuous risks for both the shareholder and the business.

It’s never too late to learn financial math, especially when all the groundwork has been laid out for you. All you need to know are the basic formulas, like the expected return, the payback period, earnings per share, etc. With your analytics skills, these laid-out formulas, a computer, a trusty calculator, and of course, money in the bank, you’re basically good to go.

Using your trusty calculator, you can assess how much in a year (or even in ten years’ time) your investment is going to yield. There are a lot of external factors to consider, but it will be helpful if you are anticipating something rather than sailing in the middle of the ocean with no compass.

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