The first time around is always a difficult process to manage, and especially when it comes to money with the first investment. Therefore, to earn money and get a return on savings, you have to take into account some tips. Perhaps it will not develop as originally planned and the effect will be the opposite: losses will surface. Lack of knowledge of the markets and financial products, lack of learning and no experience in operations are the causes that can make you lose money on a first investment. To avoid this, this article shows the keys so that the first investment is not traumatic and can be channeled with the best results.
First investment, the most difficult
If investing is always a complicated process, and with a certain propensity to risk, it is much more so for those who do not have experience in this kind of operations and decide to make their first investment. Lack of learning and inexperience can play tricks on them and lead to money losses.
But novice investors can follow guidelines that limit the negative effects of the first investment. The key is to cement an adequate strategy to expand, even slightly, your personal assets. To achieve this, it is necessary to abide by criteria based on prudence, especially avoiding all kinds of sophisticated products or those that require minimal learning. It is preferable to set a modest goal, but one that can actually be achieved.
Tip 1: invest only part of the savings
You should never invest all the available capital, nor a very large part of it. Depositing between 20% and 40% will be enough for the first operation. Not surprisingly, there will be time to expand the investment, as the experience accumulates and the first positive results are detected. As a consequence of this strategy, the possible losses of money will be less and there will be more opportunities for the trend to change radically.
Tip 2: invest in popular products
Inexperienced savers should not, even remotely, invest their savings in banking products that they do not know, and even less in sophisticated designs of which they do not master their mechanics. They should be limited to those already known, at least in theory, and those who know how it works. This is the best formula to avoid making mistakes that could make them lose part of their contributions and, above all, so that the losses are less intense.
Tip 3: look for a guaranteed return
While they continue with their learning to generate greater return on their capital, first-time investors will have no choice but to opt for products that guarantee a return, no matter how small. Their options go through equities, through the securities that pay their shareholders with dividends (earning up to 6% every year) and continue with fixed-term deposits, or even mixed funds, which allow to improve the margins of return on savings.
Tip 4: get advice the right way
If they are not in a position to channel savings, either due to ignorance or because they have never operated with most financial products, inexperienced investors will have to demand the help of their bank. Certainly, they will have professionals who will be in charge of protecting this process, determining which designs are the most convenient at all times, as well as under what conditions to underwrite them, depending on the available capital and the level of risk that it can tolerate.
Tip 5: do not be influenced by other people’s opinions
Siren songs about what they can earn in one or another banking product will surely reach their ears, and these can come from people or opinions of not much confidence. In order not to make an excessively serious mistake, it will be necessary to avoid them, at least while the first operations are developed. They can lead to irreparable mistakes, from which your checking account balance is seriously affected.
What you should take into account before making your first real estate investment
- Look for projects at presale prices, this ensures even more profitability when it comes to long-term sale.
- Make sure the property papers are in order. You know, check that the property has no outstanding mortgages or liens.
- It is important not to invest everything in the same market.
- If you invest in something that is under construction, see how reliable the construction company is and how sure it is that the work is completed in a timely manner.
- Beware of areas without capital gains. If you have doubts about this, read: How do I increase the equity in my house?
- Also check what’s up with the green areas near your future home or apartment; the lighting, the services you will have access to (telephone, cable television, internet).
If you have money saved and want to make a smart investment, real estate is a good option. In fact, even if you do not have enough money to pay for a house and you must access a mortgage loan, it is still a good alternative because you can pay the monthly bill with the money that you would otherwise allocate for rent.
Do not think about it so much, investment in housing is a solid and profitable business due to its high demand, so it is the opportunity you have been waiting for to improve your finances and your quality of life.
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