One of the most difficult articles to write is how to start something simply because it goes beyond understanding, comprehension, and information. I thus will digress for a moment and start off with a riddle for you. So…five frogs are sitting on a log. Four decide to jump off. How many are left?
Everyone knows that investing early in life is important, but the hardest part is usually taking the first leap because, by human nature, we desire immediate gratification and detest the practice of short-term sacrifice for long term benefits.
It takes a high level of discipline, self-denial, determination, and commitment to reap rewards. For clarity and mutual understanding, Investing is simply the process of allocating funds towards a project, financial instrument or asset with the expectation of generating income-profits or returns.
Like any other field, execution of a successful investment journey demands a boisterous and passionate approach that includes the transformation of a well-crafted investment plan into a measurable success story, in this case, returns attained. The factors that have led many of us to opt to save our money in savings accounts instead of investing it is because of the lack of access to information and the fear of losing money.
Now, Investing is as simple or complex depending on your level of willingness and commitment. The key to building your wealth is developing good habits, such as regularly putting money away and cutting down costs.
You do not need a lot of money to start investing and investing comes in different forms. Once you start it becomes addictive because you will always want to grow your money.
The following steps can help you get started: –
Getting all the relevant information and this can be done by speaking to a financial advisor who can explain the markets and tricks of the trade. The financial advisors will help you grasp the key to investing without reading books and will also help you in understanding your risk profile and investment timeframe. Your financial advisor will also help you in investing in a wide selection of assets.
Start building the habit of investing consistently and not just when you think you have extra cash. You can start by putting a portion of your income away where it is not easily accessible this way you give your money time to work for you
Regularly Monitor your Investments to see how they are growing and to also to see if you need to move other assets and look out for the costs that fund managers charge and the taxes applicable because this could lower your net returns.
A decision to Invest has to be fueled by hunger, determination, a well-worked out plan and a goal which is primarily to reap returns. Information alone is never enough. How someone acts on information makes a difference. Investing is one of the best decisions you can ever make despite the risks involved.
So back to my riddle. If your answer is not five, you might want to consider narrowing the gap between deciding and actually doing (Investing). Back to the riddle, four “decided” to jump off. That’s all they did. And there’s a big difference between deciding and doing.
Ready to get started? Read Do I need a million shillings to start my investment journey?