Many first time investors think that they should invest all of their savings but this isn’t necessarily true.
To determine how much money you should invest, you must first determine how much you actually can afford to invest, and what your financial goals are.
First, let’s take a look at how much money you can currently afford to invest.
However, you don’t want to cut yourself short when you tie your money up in an investment.
Ask yourself what were the savings originally for?
It is important to keep three to six months of living expenses in a readily accessible savings account — don’t touch that money!
Don’t invest ANY money that you may need quick access to in the future.
So, begin by determining how much of your savings should remain in your savings account, and how much can be used for investments.
Unless you have funds from another source, such as an inheritance, settlement, or lottery win, this will probably be all that you currently have to invest.
If you are employed, you will continue to receive a steady income, and you should plan to use a portion of that income to build your investment portfolio over time.
Speak with a qualified financial planner to set up a budget and determine how much of your future income you will be able to invest.
With the help of a fiduciary, you can make absolutely sure that you are not investing more than you should — or less than you should in order to reach your investment goals.
Hopefully, you’ve done your research, and you have found an investment that will prove to be sound.
If this is the case, you probably already know what the required initial investment is.
If the money that you have available for investments does not meet the required initial investment, you may have to look at other investments.
Never borrow money to invest, and never use money that you have not set aside for investing!
This is just asking for unnecessary risk in your financial life.
How To Plan Financially For Unexpected Expenses
The F.I.R.E. Movement — How To Retire Early!
The 5 Ancient Laws Of Money