Tips as you begin your investment journey

The only way to make money work for you is by investing it instead of setting it aside in a conventional saving account or anywhere else where it’s not generating returns. So here are a few guidelines to support your goal of achieving financial independence:

1. Clearly outline your savings goal
   What is the drive behind your intention to have an investment plan? Is your decision geared towards having an emergency fund to cushion you on a rainy day? Growing your travel fund? Homeownership? Laying out your short, medium, and long-term financial goals and giving a time frame to each puts greater clarity on your investment goals. From this, it is easier to come up with a personal financial roadmap that details the frequency and size of contributions depending on your cash inflows.
2. Evaluate your risk tolerance
   All investments have a risk element attached to them. What differs is the intensity or degree of the risk. Investors usually desire the highest return possible with the least amount of risk. However, financial markets typically do not offer this. Instead, the investments with the highest risk offer more attractive returns and vice versa. Money market funds like the GenCap Hela Imara attract conservative investors due to their conservative risk nature. Carefully weigh the risks of each investment and only take up as much risk as your guts (and accounts) can bear!
3. Do your due diligence
   Never invest in a product/service/idea that you do not understand. Ask pertinent, critical questions and cross-check answers with an unbiased source. Ensure you research and get as much information as possible to make an informed decision. Taking time to grow your financial literacy will never go unrewarded.
4. Don’t put all your eggs in one basket
   Consider diversifying your investment to incorporate more than just one asset type. Creating a balanced mix of investment cushions against potential losses should the performance of one of your investments be affected by prevailing market conditions.
5. Automate your finances
   Creating a standing order from your bank account to your investment account will eliminate the chances of skipping contributions. It will also come in handy to ensure that you are saving or investing before you spend.
6. Avoid procrastination
   Always remember that your money starts earning for you as soon as you begin investing. Putting off your investment journey can lead to losing valuable time where your money may have been growing thanks to compound interest. Therefore, it is wise, to begin with what you have at hand and keep adding to it as your income and prospects improve.
7. Stay informed
   Investing is an ongoing process that should not stop at making the initial deposit in the account. It is crucial to stay informed and keep up with financial news that affects your investments. Staying in the know also plays a significant role in identifying other investment opportunities that would be of great interest and benefit to you.

Conclusion

Robert Kiyosaki said, “It’s not how much money you make, but how much money you keep, how hard it works for you, and how many generations you keep it for.” Keep this in mind as you take the first steps on your investment journey, hopefully, made easier with the above tips.