Keep it simple and balance your short term income with your long term savings and investments. The books and level of risk need to always be in proportion with acceptable loss.
With risk remember, if you worry about losing it, ie it will cause a distinct change in your livelihood, simply play it safe because you can always revisit the issue in the future. You can reinvent losses in company shares, so beyond index linked ISA, direct stock market investment is a risk.
When payday arrives, save something, open up an ISA and put 15-20% of your net pay in savings for a rainy day. Instant ISAs are assessable and the money is out of sight and out of mind.
As this nest egg builds you can think about other investment opportunities, bank supervised stocks and bonds which offer a higher rate of return than 3%, but anywhere between 1k-8k an instant access ISA is ideal.
Good Financial Habits
Keep going with the good habits – prioritize:
- Bills (especially credit cards)
- Clothes and daily living
With an organized mindset you’re halfway there. Get the large bills out of the way and what you left over sum can be divided between saving and leisure, it’s that simple.
Budget your money. When times are good treat yourself to that new mobile, car, holiday. Whatever raises the spirits and brings in some new to keep the home fire burning.
Proceed with: Caution
Here are some tips for the stock market, but i have tell you from personal experience after investing in Bitcoin shares, get advice and pursue with small steps and caution:
Short time frames don’t tell you much
Looking at the rate of return for a single year is not particularly useful, as any investment can have a hot 12 months. To get a sense of how an investment may perform in the future, it helps to have a long record of performance to examine.
It offers no information on the type of investment
What industry does the company operate in? How big is the company? Does it operate internationally?
Consider the S&P 500 returned 11.96 percent. Information on returns is only meaningful when it is paired with information about the broader stock market.
It does not always factor in all costs
Your brokerage firm may also charge a commission to execute the trade.
No detail on volatility
Annualized return on that stock is 16 percent. But that does not tell you whether the stock’s performance has been consistent or wildly up and down.
Gives you no information on fundamentals
A company’s current performance can influence share price just as such as previous market trend.
Remember tax responsibilities
Long-term capital gains rate of 15 percent, suddenly, that 9 percent annual return became something closer to 7 percent.
With me my P & L was too low and the spread to high, meaning the stock auto closed before the market lifted resulting in £10 loss (trade placement cost), instead of a £50 profited gain.
The market volatility especially the cryptocurrency and others can be both confusing and frustrating. Read up on companies and place trades at small leverage.
Going into it with an understanding of loss and knowing not each trade can be a winner is a healthy attitude – good luck.
- The Simple Path to Wealth Your Road Map to Financial Independence and a Rich Free Life
- J L Collins
- Publisher: CreateSpace Independent Publishing Platform
- Sid Mittra, Anandi P Sahu, Brian Fischer
- Publisher: SAGE Publications Pvt. Ltd
- Edition no. 12 (09/14/2016)
- Dave Ramsey
- Thomas Nelson
- Kindle Edition
Last update on 2019-05-31 / Affiliate links / Images from Amazon Product Advertising API