When we talk about personal finances, many people think about expenses and income and the question: “Do I increase my income?” or “How do I save (more)?”. These questions differ from person to person, because psychology divides us into several personality categories: people who think about increasing their income/receipts and people who think about reducing their expenses and saving more money.
Online investments
Regarding the subject of multiplying money, the question unequivocally arises: “What should I invest my money in?”. Why is it a question that arises unequivocally? Because there is no information on this subject. Even if you open Google and search for the answer to this question, you will find one or two solutions proposed by those who sell those investments.
If you search more thoroughly, you will find even more options, but you do not know how to use them, how to analyze them and be able to make an informed decision as would be conducive to your objectives and financial situation. If you also find forums that denigrate a solution that you have found, analyzed and consider would suit you, you subsequently begin to doubt yourself more and more. The more fiercely you search, the more people you find who do not recommend them. The circle is vicious. And again, when you hear about multiplying money, you ask yourself: “What should I invest in?”
If you do not find a person you can trust, a person authorized to provide you with objective information about investment solutions and with experience, but also professionalism, as well as dedication in their field of training, then you will waste time asking left and right about solutions in which you can invest and you still will not find one. Time passes, you will find, your money is still in deposits and thus you lose money, saving, as Robert Kiyosaki states. You have done nothing just by saving, because inflation diminishes your money.
What should I invest in?
To this question, many people first recommend: “invest in yourself!”. Ok, I invest in myself, you think, I read, but everything I read is overturned by other people who say that they are not ok, that they are losing money, because they lost money. And I confirm it. I have also met economists or businessmen who lost money with some investment solutions because they did not apply the theory. They gave in to emotions. When I told them that that was the right solution, but they did not use x, y, strategy (theory), then they were perplexed and unequivocally confirmed to me: “I knew the theory, but I did not think to apply it!”.
Well, I invite you to trust yourself, first of all, and to analyze the subjective perspective of others a little and always, always rely on theory. Theory never fails.
“If theory and practice do not match, change the practice” Albert Einstein
If you have not learned much, but you have learned some strategies, the theory, then find those solutions that meet the criteria of the theory and apply them. You will read further, you will learn; you will learn both from practice and theory. If you keep reading and do not apply anything, the more you read, you will realize how much you still have to learn and fear arises: “I have not yet invested in myself and, as such, I do not invest money because I will lose it!” This is how the person who adliterates this answer thinks: “invest in yourself before you start investing your money” and I can say that those who only recommend investing in yourself, have invested money and lost, then they started learning, investing in them and still do not invest, because they no longer have the courage to invest their money, realizing how much they still have to learn about investments.
I don’t trust consultants, because they want to sell me their products!
And this is a fear. A conscious and valid fear. Yes, I agree. But consulting is a meeting in which you find out information and arguments that help you make your own decision. If, however, you don’t receive the necessary information, you can’t make your own decision, but on the contrary, you are pressured to make a decision; the decision said by the consultant, then, yes, you can go to a consultant from whom you find out the right information and arguments so that you can make your own decision.
What should I invest in? What is the best investment?
There is not one! There may be a better, safer one, of all, but no one can say for sure that it would be the only one. No one knows. In investments you need diversification. It is necessary to have several investments: “don’t put all your eggs in one basket!”.
You can diversify in many ways: multiple markets, multiple instruments, multiple financial products. It’s true, you may not be able to do it all at once at first, because you may not have a lot of money, but starting with one investment will eventually lead to more money.
I have multiple businesses or multiple properties and I’m diversified!
Yes, but in fact you are not! Why? Because you have only one asset class (let’s call them pompous😊). The money is invested in the same investment solution, not in several. Yes, it is very good to have several businesses and it would be healthy from an investment point of view to be in different fields so that if one does not work, the other or the other two will work (e.g. restaurant: it may not work at times, transportation, the same, construction – there are periods when nothing is built, etc.) However, you are not diversified. A maximum diversification would be to take 10-20% of the profit of your companies and invest in financial instruments, then invest part of the profit in a property, and reinvest the rent in another investment. How does it look now? Are you diversified?
Same with real estate! What do you do with the rent? You have two options: either you include it in your monthly budget and spend the money or you save it to buy another property (to make a down payment for another property). Is that it? You can invest the rent in a financial solution, it capitalizes and over time you can open a business that later leads you to the capital necessary to purchase another property in cash or to invest in something else.
What do you want for your money?
Another very good question is: why? Why do you want to invest? If you just want to have more money, then don’t invest! Because you don’t have a goal and you start investing. The market fluctuates. You are not always on the wave and when the market drops you will withdraw the investment and lose money. “This investment is not worth it!” you will tell yourself. Because you have not set a goal, respectively a time horizon. When you have a financial goal, you know the time horizon in which you are investing, but also the amount that your investment must reach.
If you don’t have that, then it’s better not to invest because you’ll end up thinking that no investment is good. You don’t trust investments, you don’t know the fluctuations and you hope that everything you choose will only go up, not down, so you don’t benefit from the drops, you don’t invest more because, in the end, you just wanted more money, not to have less in your account😊
If you don’t know what I’m talking about, I invite you to look for articles about compound interest, https://laurentiumihai.ro/puterea-dobanzii-compuse/about market fluctuations, Cost Average Effect https://laurentiumihai.ro/efectul-cost-average/and Dollar Cost Effect. You can schedule a consultation with me. https://www.psihologiabanilor.ro/consultanta-financiara/You choose what decision you make!
Good luck in becoming aware of money and effective investments!
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