To be successful at investing you need to:
- Have a goal in mind. What are you saving for? A goal is set in a time frame. The shorter the time at your disposal the more you have put a way to reach your goal and this will determine how much risk you can afford to take on.
- Understand your risk profile: Everyone is an investor until they start to loose money. When it comes to risk you need to ask yourself: a) What is my capacity for risk? If you have more time and a larger investment amount you have a larger capacity for risk. b) What is my appetite for risk? This has to do with your own psychology. Some people have a higher tolerance for risk than others.
- Have a clear and executable investment strategy: Here you need to understand investment vehicles, the cost of the investment, the tax consequences of the investment and the possible investment growth you possibly can attain for the amount of risk you are taking on.
A well devised investment plan will accelerate you towards financial freedom….