In today’s world, information is so much easier to gather because of the internet. Technology has helped us so much especially in finding ways to earn more money. It has also paved a lot of opportunities for undergrads and stay-at-home moms to make extra cash on the side.
Just like in real world, you will also find a lot of liars and misinformation in the internet. Because of the size of its audience, it also has become easier for people, especially scammers, to spread wrong information to almost everyone. Whatever the means maybe, people are at their most suspicious or most vulnerable when it comes to money talk.
To help you filter through all the information you gather, here are some real talk when it comes to money and investments.
You don’t need a ton of cash to invest.
There is no minimum amount for anyone to invest. It all just boils down to where you want to invest. In fact, it is better to divide your money into different investment portfolios for a better chance of higher return. Different investment strategies requires different amount of money. It also involves risk, the magnitude of which will vary. Most of the time, the higher the risk, the bigger the return. It all depends on your budget and how much you are willing to risk.
You won’t lose your money when you invest if you do it right.
As mentioned earlier, investment carries risk. The riskier it gets, the more chances of losing your money but it will also give you a higher return when you succeed. If you are just starting to invest and can’t afford to lose any money, then go for safer options like mutual funds. Safer options will not give you big returns right away, but you will be able to let your money grow more than when you just put it in a savings account.
Not all Investment Advisors are trustworthy.
Investment Advisors are a great help in figuring out where to invest your money, but there are also some who are only after the fee they get when you invest. Good advisors will take time to listen to your situation and preference, and then recommend some options for you. They will not force you to invest on anything without listening to what you need. Of course, the best way to check is to verify your advisor’s opinions before agreeing.
Not all debts are bad.
Acquiring a debt isn’t always bad. You just have to figure out which one is good and which one is bad.
If you want to buy an asset that will grow in value later on that is considered a good debt. Getting a loan to buy a real estate for yourself, for rental income or just to flip it is an example. You also need to bear in mind that your monthly payable for the loan should not exceed your net disposable income. Your net disposable income is the amount after you pay your taxes and your basic needs.
If you acquire a debt because you want to travel, or buy a gadget or anything that will depreciate in value is a bad debt. Buy those when you can afford it. Do not borrow money for it. Buying those things are usually not a good investment. If you borrow money for any of those, you will increase the money you will lose without having any return in the future.
Cheaper is not always better.
If someone is trying to save, they would always go for a cheaper option when buying things to save money. This might be okay for some purchases, but there are times that it is not. If you are in need of a car, buying something that is cheap will result to a more expensive repairs and maintenance. Purchasing or renting a cheaper house might not give you the best deal as it might be more expensive to travel to and from work everyday. When trying to purchase anything, think of how long you will need to use it and how long you will need it to last. If it’s something you will need once, then cheaper is the best option. It is also important to take note that branded items on sale are so much better than cheaper options.
Putting every penny in your savings won’t make you rich.
Putting your money in savings is the a better option in safe keeping it, but it will not make you rich. It will probably earn a small interest overtime, but not enough to make a fortune. Instead of saving all of your money, put some of it to work for you. You can invest them on some stocks or in a business of your choice.
Your retirement pension won’t be enough after you retire.
Relying solely on your retirement pension is a bad move. Because of inflation, what you will be getting once you retire won’t be enough to have a comfortable living. Adding to the equation the possibility of some medical bills you will need to pay and the medicine you will need to take, you will barely be able to have enough money for food. Save for your retirement by investing in some Pension Retirement Plan, or other investments that will allow you get a monthly equity on top of your pension once you retire.