Things to Consider for First Time Investors

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Every human being is unique. We differ in our opinions, points of views, and beliefs. In investing, ideas of every individual also vary.

If you are a novice in the world of investment, you’ll definitely need to ask yourself, “What kind of investor am I?” before you carry out actual investment activities. 

To know what category of investor you fall under, consider these two points:

●     Which Age Group Do You Belong To?

Younger investors, especially those who are under 30 years old, are usually very versatile in dealing with the risks that come with investments. Even in the worst case scenario, they’d be much more ready to handle any losses because they are not nearing retirement age and have ample time on their side.

Investors aged 50 and above, on the other hand, are usually advised to be more cautious in their investments.  Unlike younger investors, folks nearing retirement age have limited years to replace any potential losses should their investments fail.  Hence, a more prudent stance is definitely in order.

●     How Much Money Do You Have? How Did You Earn Them?

To make an investment, you’ll need money.  And the more funds you have, the more tolerance you’ll usually have when it comes to dealing with the volatile nature of investments, simply because you have the additional resources to spare. 

But sometimes, it’s more than just about the money.  Your background comes into the picture too.

Commonly, individuals who have a strong background in business and entrepreneurship are more aggressive in taking risks. The reason behind this is that, the nature of their financial background involves making gambles (i.e. starting a business is arguably a leap into the unknown).

On the other hand, individuals who have struggled for the longest time to earn and save money are understandably more fearful in facing risks. Hence, you’ll be more inclined to spend on low risk investments if you fall under this group.

 

Know What Kind of Investor You Are, then Take Action

Prior to making investments, it is vital that you spend some time thinking about the kind of investor you are, so you know exactly what kinds of investments you should be researching on and placing your money into.

Ultimately, understand that whilst investments promise big gain, the potential of suffering losses is very real too.  If you have barely enough to survive, jumping into an investment could yield unnecessary stress and emotional distress that you really shouldn’t be subjecting yourself to.  Hence, always make sure your everyday commitments and personal needs come first.  After all, investments can always wait until you’re financially ready to commit.    

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