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5 Tips for the Private Investor

We all need to have a basic understanding of investments and as soon as you start earning a living, you should be putting a little aside for your future. People don’t automatically end up wealthy when they hit retirement age, rather it needs to be carefully planned out and the sooner you start thinking about wealth, the better.

Here are a few tips for newcomers to the investment arena, with the aim of helping to make the right choices.

  1. Research and More Research – Whether a market or a broker, it is essential to carry out research and the more you know about the inner workings of markets like Forex and ASX. As an investor, it is your job to take what steps you can to minimise the risks when investing and the more you know about a particular market, the less chance of losing out.
  2. Managed Funds – Why not invest your hard-earned cash with a professional fund manager? You don’t need to have any inside knowledge and the manager would have numerous funds, some designed for high income, while others focus on long-term wealth generation. If you live in Australia, Lincoln Indicators are the go-to people for safe and reliable investments in the form of managed funds. The ASX, for example, offers great investment opportunities and with a professional team of experts at the helm, your investment is in safe hands and will perform as expected, or better.
  3. Don’t Put All your Eggs in One Basket – The oldest saying of them all, if you stuck all of your wealth into a single venture, what would happen of that failed? Talk to a financial advisor who can help you create a wealth generation plan that includes numerous, carefully placed investments and should one bite the dust, you live to fight another day. There are many options; gold, real estate and Forex trading, to name but a few and a great deal of thought needs to go into your investment choices, for obvious reasons. Here are a few tips on educating your kids about wealth, which is important for all children.
  4. Make Good Use of Available Technology – There are some pretty amazing software packages to aid the private investor and hooking up with a fund manager would bring with it many benefits. Sometimes, you need to make quick decisions, so your financial investments should be readily at hand by logging into your account. The Internet is full of valuable resources, especially for the private investor, which you can access for free.
  5. Don’t Over-Invest – It can be easy to get involved with a few investments and before you realise, you need to borrow money, which always costs you money. Make sure you have some money put aside for unexpected things; your investments should not put you under any financial pressure and as your income grows, so should the amount you put to one side for investment.

There are many things to take into consideration when looking for productive investments and knowledge is the key! Create an achievable plan and stick to it and when you reach middle age, you will already be reasonably secure.

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