One of the best ways to build wealth (aside of being careful with your spending and saving money for the ‘rainy days’) is doing some smart investing. This allows you to ‘grow your money’ and should be done as soon as possible (thus allowing you to reap better results faster).
Many potential investors are still scared about the entire process, but with careful consideration and planning, this can easily turn into a very lucrative endeavor, allowing you and your family to achieve financial independence.
There are many investment options (shares, properties, fixed interest etc.) that will help you earn money and achieve the financial independence you aim for.
Investing in shares allows you to own a small piece of a publicly listed company, which means you also get a share of its success (take advantage of a capital growth, earn income from the dividends etc.). As the company grows, so does your income.
Sure, things do not always go as we had planned, so it’s important to make the right choices and be very well informed, this way most of the companies you’ll invest will be successful. Investments shouldn’t be taken lightly and each decision should be made after a thorough research. When it comes to investing, there’s a lot of money to be made or lost, depending on how well you’ve done your ‘homework’.
Invest in companies that you know (or have diligently researched), invest in blue-chip companies, that have a history of growth. Be very careful in your research and try to get all the information you can, so that you’ll be successful in your investment endeavors.
- Income Shares – often blue-chips that pay a regular dividend. While many have a lower potential for capital growth, they do provide an income to their shareholders. They are ideal for the investors who would accept lower earnings, but don’t like to take on too many risks.
- Growth Shares – the potential for a good capital growth is bigger, but they may pay a smaller dividend or none.
- Speculative / Short-Term Shares – these are high-risk shares, but they have the biggest potential for a rise or fall in value. Usually these are less established companies, which are preferred by investors who like to take on a risk.
When it comes to investment advice, many agree: you need to diversify. Don’t invest solely in one company or just a type of share, try different approaches and then assess your results to see which worked best for you.
If a type of share is under-performing and you have ‘bid’ everything on it, you’ll clearly have a huge loss. But, if another type is performing well, you will minimize your losses and even gain on the long run.
Anyway, investing in itself is a great way to grow your wealth. It does require more work and research than just saving money, but the results can really be outstanding. Starting investing earlier allows you to gain more knowledge and experience and you will also have more time to grow your money.