The Golden rules of the investor
In order to avoid many mistakes in the process of investing personal savings for profit, it is recommended to adhere to certain rules that will help anyone to act competently, including a novice investor. They are compiled based on the experience of many investors. If possible, it is always better to learn from other people’s mistakes and blunders, reducing the risk of personal financial losses.
Rule No. 1. Each investor should have a personal fund for opening deposits.
Figuratively, you can imagine it in the form of a piggy bank, all the funds of which will be used only for investing funds, in order to make a profit. It is rare when it is easy to find money to open a deposit in an unexpectedly high-quality project. In this regard, potential investors miss profitable opportunities to increase their savings. In order to have a solid foundation for investment activity, it is necessary to organize a separate fund that will be used only for its intended purpose.
Rule #2. Always pay yourself.
Experienced investors recommend replenishing their own investment fund, saving 10-15% from each income. This should become a habit, do not neglect this rule. 10% of the income is not such a significant amount that will be noticeable to the budget, but it will allow you to form a stable fund for investment.
Rule #3. Soberly assess your solvency.
Another important rule for every investor is that you can invest only the amount whose loss will not be catastrophic for the family budget. Naturally, such losses will be significant on a psychological level, especially when money for investment was earned with difficulty. But they should not concern natural needs (in food, food, clothing, housing). If there is not enough basic income for periodic contributions to your investment fund, you should find other sources, for example, refuse to buy an expensive gadget, and invest the saved amount in your “piggy bank”, or find a side job to replenish it.
Rule #4. Never invest borrowed funds.
Any investment project, especially high-yield programs, is a certain financial risk. Therefore, in order not to end up in a debt pit, you can invest only your own funds. There can be no exceptions to this rule, even if the project seems reliable enough.
Rule No. 5. Expenses should not exceed income.
Often, with an increase in profits, the costs of users also increase. Sometimes, thoughtless and unplanned expenses force you to burden yourself with debt obligations. This rule should not be ignored. It is important to plan your expenses correctly so that they do not exceed the income level.
Rule No. 6. Diversification is an opportunity to increase your profit.
Among investors, this rule is actually considered “golden”. Every depositor, without exception, should follow it. According to it, the investment portfolio should be divided into several parts, which are invested in different reliable companies, their number is individual, from 3 to 7. It is impossible to keep all the capital in one profitable program, no matter what hopes are placed on it. Diversification will increase the overall profit, and if a project closes together with the depositor’s deposit, he will be able to make up for the loss at the expense of profits in other programs.
Rule No. 7. The profit should be withdrawn regularly.
Reinvestment is allowed, but it is reasonable to use only part of the profit for this, the rest should be regularly withdrawn to form the depositor’s personal fund. After all, even projects that have shown themselves on the positive side will sooner or later stop working, in this case the investor risks being left without his savings. In order to minimize risks, it is better to withdraw the profit received in the program, and after the deposit is returned in full, in a good scenario, invest already net income, leaving your own savings with you.
Rule No. 8. Money should work for the investor.
It is unwise to spend the profit immediately received, it is necessary to look for new assets to generate income. For example, by making a short-term contribution, a participant in a highly profitable program received good interest and immediately spent it on the purchase of expensive equipment. In this case, the money stopped working for the investor, turning into a liability.
It is more reasonable to invest them in your investment fund, and having accumulated a decent amount, diversify it and open deposits in several high-quality projects. In this case, the investor can expect a much larger profit.
Rule No. 9. Investments are always a certain risk.
Not one investment company, especially one that offers high-yield programs, will not be able to give 100% confidence in the return of the entire deposit amount or profit on it. Even if the project shows stable work and payments according to the current regulations for a long time. The greater the profit– the more the investor risks opening a deposit. You should not trust projects in which 100% guarantees are prescribed, most likely, such a resource is fraudulent. When deciding to earn money on investing, the user must be prepared for the inevitable losses. Adhering to the above rules, their size can be significantly reduced. The main thing is that the resulting profit always covers the losses.
Published: 6 October, 2021