How Can Investing Make You Financially Free?Investing - Why It Affects You
Today we are going to deal with a fascinating topic, and in which countless doubts arise, especially with most novices in this online business. It is about how to make money investing in the safest, correct and most profitable way possible.
First Of All, What Is Investing?
The fundamental idea that underlies any investment is to put our money to work looking for it to grow more or less quickly over time. There are many ways to do it: investing in stocks, real estate, precious metals, profitable franchises, works of art, and so on.
Both in the offline and online world, the options we can find to invest our money are immense. In any case, in this article, you will hardly find information about this type of conventional investment systems, since most of the pages that we use and recommend are to generate income utterly free of charge.
However, a small part of our portfolio is made up of sites where you can only earn money by investing capital out of your pocket. In most cases, they are not the typical investment systems that we have just discussed (except for some cases that you will see below), but other methods that, as a general rule, sound entirely foreign for most people.
In any case, regardless of the type of investment we are looking for to get a return on our money, there are some guidelines that we must always follow (if we do not want it to volatilize instead of what we are looking for; to multiply).
How To Make Money Investing In The Right Way
The first question that one has to ask before investing in any business is this: how much money am I willing to invest? Once resolved, the following would come: how much money am I willing to lose? And finally, you should ask yourself: will it affect my daily and family life if I lose that money?
The Fact: Although these are self-explanatory questions, many people do not ask them before investing their money anywhere, which usually leads to all kinds of upsets, disappointments, family dramas, and so on.
Let’s Analyze The First Question: how much are you willing to invest? This is a decision that you must make personally, without letting yourself be carried away by anyone’s opinions. Only you know how much money you have, where you got it from and if you are going to need it in the short, medium or long term.
There is a fundamental rule that every investor must take into account before putting their money anywhere: there will always be investments in which we will lose money. It is impossible to be right in all the businesses where we go.
And this is where we find the first mistake of a newbie in this of investing online: investing money that he cannot afford to lose without affecting his daily life and that of his family. You never have to touch the money you need to survive.
The Two Essential Guidelines
The two guidelines to follow in order not to commit said money, in any case, are very simple:
- Do not invest money that comes from your work salary destined to necessary expenses (food, electricity, mortgage, etc.).
- Never invest anything that has to do with your house, car, pension plan, family savings, etc.
Now you will ask, “so… where do I get the money to invest in those attractive investment offers that are on the Internet?” Well, very simple: from the cash, that little by little you are earning in the many free pages that are on the net to generate income, and if that’s not the case with you, then you should invest from your savings.
Another option is to use the best saving techniques that allow you to accumulate capital to invest in those projects that you consider most attractive.
Definitions And Essential Terms
To make money investing in the right way and start your career in online business on the right foot, you must know some completely essential terms. They are as follows:
Portfolio: It is the set of investments that you have active at a particular moment. You must make a strict and continuous follow-up of it, making the modifications that are necessary to maintain a balance between profit and loss.
Liquidity: It is the money that you have available (and that therefore is not invested) and that you can use at any time. In any winning investment strategy, it is essential to establish liquidity guidelines in your portfolio.
Profitability: It is the ability to generate or produce an additional benefit to a job, effort or investment made.
Return On Investment: Commonly known with the term ROI, it is a value that allows us to evaluate the performance of an investment taking into account the benefits obtained from it and dividing them by the expenses that it has generated.
Compound Interest: This term indicates the ability to reinvest our money. An example:
We invest $ 100 in a site and make a profit of $ 10 after a year. This would be a 10% return. For the following year, instead of the initial $ 100 we would have $ 110, which invested in the same place and with the same profitability, would allow us to start the third year with $ 121.