What criterias should be considered for new investors?

How is the year 2023 of yours going? Some of you might get your bonus money. Some of you might earn money from your second job. Some still wonder how to make the money you have to grow. Should you put the money that you have in investment? Today we provide good knowledge for new investors about the criteria that they need to consider before investing. 

What should be considered before investing?

  1. How much of your “Money you can afford to lose”?

    If you need to use money for the next 1-3 months or 6 months, you should not do any investment. If you really want to invest, do a short-term investment without any risk such as saving your money in the bank account. To assure that your money will not be lost. If the money for investment  is your savings and you do not need to use it, it is fine to use the money in the investment.

  2. Do you have enough back-up money?

    You should have back-up money for at least 6 months or more. If you have remaining from the back-up money, you can use the money in investment. When the day you need to use money comes, there will be no need to borrow money from other people or withdraw money from the investment. The investment will turn negative if you stress out about making more money. 

  3. What is the investment objective?

    You must have a goal of what you are investing in so that the investment is worth the time and value. For example, this investment is for studying both domestically and abroad, paying University Tuition, buying or modifying a house, buying a car, getting married, expanding a business or using it in retirement. So that you can properly plan on which assets to distribute your investments to.

  4. How long is the investment?

    Investment period is also important because it will affect the assets that are used in the investment. For example, If you invest for two years, you may choose to buy savings lottery tickets, but if you can invest for 10 years or more, you can also buy long-term bonds.

  5. What is the desired rate of return and how much risk can you take?

    The higher the rate of return, the more risk you have to take(High risk high Return) Thus, you need to carefully think before investing. Think that you can accept it or not if one day you have to lose 50% of your investment money. If you think you cannot take the risk, there are lower risk rate investments with the lower rate of return for you to choose. 

    In this regard, what should be always emphasized is that before making any investment, you should study a lot about what you will invest in to gain confidence and understanding about that investment model.

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