So you want to invest your way to riches through some wise money investment tips? There are as many tips as investment advisors. However below are five money investment tips that are sure to get you on your way to riches.
The Best Time To Invest Money Was Yesterday. The Next Best Time Is Now.
The best-known open secret of investment is compound interest. Ramit Sethi illustrates this in his book ‘I will teach you to be Rich’. If you start saving $100 a month at age 25 and stop doing so at age 35 your nest egg will be $80,000 more at age 65 than if you started doing so at age 35 and invested for 30 years.
Such scenarios make me want to shake my twenty-year-old self and make him start investing. However, if you missed the bus and didn’t start investing as a youngster, the next best time to start is today. Of course, the older you are the more conservative you need to be to preserve your capital.
Assets Make You Money, Liabilities Lose You Money. Always Invest In Assets
Many people, particularly those in the middle class tend to confuse assets and liabilities. Ricard Kiyosaki of Rich Dad Poor Dad clarifies that Assets put money in your bank while Liabilities take money out of your bank account. If you have bought your family home and every month you spend money on maintenance, property taxes etc. then the house is not an asset but a liability.
If you have bought a car that you use to provide Uber services and at the end of the month you cover your car payments and make a profit then your car becomes an asset, not a liability. In order to become rich spend most of your money on acquiring assets, not liabilities.
Keep It Simple
There are many sexy investment vehicles that come up every year the latest of which are cryptocurrencies. Yet there are other vehicles that have withstood the test of time such as bonds, stocks and savings accounts. Stick to what you know and understand and don’t go chasing after every new fad.
Don’t Waste Your Money On Investment Costs
One rookie mistake we all make when we start our investment journey is paying for financial advice from financial advisors and brokers. You will come to realize that they aren’t any more successful at investments than you would be. Any interest you earn from following their investment advice will be eaten up by their fees. This is why many investment gurus tell investors to buy index funds rather than mutual funds because mutual funds have high management costs that eat up your profit. Additionally, when seeking advice you would be better off asking a rich man to mentor you or read up proven investment books such as rich dad poor dad instead of seeking advice from a financial advisor that will charge you exorbitant fees.
Scarcity Is Often A Sales Tactic – A Money Investment Tip
We have all come across that investment opportunity that seems too good to be true and is only available for the next 24 hours. I would pass on those. Scarcity is a proven sales tactic and that’s why crooks love using it. Most of my investment mistakes have been due to the salesperson pressurizing me into buying the property or the investment vehicle before a certain offer expired. If the offer expires another better one will come along so don’t fall for such sales tactics.
How about you? What is your best investment tip?