
(Photo: Guul Group)
Let’s look at this 5
things that you need to ensure you have in place before taking the next step.
Level of Involvement
It is very important to
know how much or little you'd like yourself get involved. Do you want to
do the investment part-time or full-time?
If you have the time to
do it all, you can solely responsible for all the activities needed in
investing. You can also find a partner to share the responsibilities and
seed money to start-up an investment. You may also consider being an angel
investor
For example, you may
only want to be an angel investor where you provide the start-up capital to an
investment. As an angel investor, you are given shares of the investment
and be part of decision-making.
Time Frame
How long do you want to
keep the investment? Success stories do not happen overnight. Even
you are a long-term investor, it is very important to know the length of time
you want to do and keep the investment. You will need to evaluate your
expectations from such investment. The return of investment must be
foreseen by anyone who wants to enter in investing.
Return of Investment
In any investment, the
return of investment must be foreseen by anyone who wants to enter the world of
investing. Expecting a 10%, 20%, 30% annually is normal to know if such
investment is worthy of your time. This is where market research and
feasibility studies come in handy. Again, returns depend on the type of
investment.
Diversification
To maximize earning,
investor must strike a balance between the goal and its risk. Diversifying
is to spread out the risk to create a solid portfolio. In stock investing,
spreading the risk thinly could mean money loss. More money wouldn't
necessarily mean more earning.
Exit Strategy
In any kind of
investment, there is no assurance that you will reach the goal even if you
fulfill every step of the way. Exit strategy is a requirement in any
investment. One must know when to tell enough is enough. As an investor you
must be clear when you want to withdraw your money and how you can do it.
Investing is a very
good opportunity for you to grow your money. But getting into investment is
not a walk in the park. As an investor, it's your responsibility to know the
facts and learn the way around it to be successful. What looks good on
paper may not look good in reality if you become careless with your investment.
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