The concept of investing is simpler than you’d originally imagine, in spite of the fact that the world of finance appears quite intimidating. However, once you’ve learnt the over-arching concepts, it is relatively straightforward to understand. Here, we look at why investing is a good way to manage your money, and how investing can work for you.
With films such as the Wolf of Wall St. now entrenched within popular culture, many people wrongly believe that investing is a form of ‘get rich quick scheme’ that can propel people from rags to riches in mere minutes. Although this is certainly a possibility at the very extreme end of the spectrum, it is highly unlikely, and is not what most traders are trading with the aim of. Although most people do trade for the increased financial rewards, many also trade for the fun of trading and investing, and there’s no reason why you should be pushed in a certain way by financial advisors- you need to make your trading fun.
How to Invest?
Inherently, investing is simple; you just need to make your money work for you. There are many different ways to invest and there’s certainly no ‘one size fits all’ approach to investing… you have to pick something that suits you.
Picking a Way to Invest
Different ways to invest suit different people. Some thrill-seeking investors, for example, go for the high risk, high reward strategy, whereas others prefer a slow and steady approach with a lower level of risk.
Likewise, some people want to be involved in every single aspect of their investments, whereas others like to sit back and handover control to the professionals. As a result, companies such as Killik now offer different strategies to suit these different investing personas.
Peter Lynch- arguably the greatest investor of all time- once famously stated that “key organ for investing is the stomach, not the brain”. Thus, you need to have the stomach for the fight and the stomach to take a loss/ volatility. Due to this, knowing how much you can take is important. Different people have different maximum levels, and knowing yours, as well as knowing what you’re comfortable with is vital.
So, to be a successful investor, you have to know your heart and your head, but you also have to understand that this isn’t like the Wolf of Wall St. Understand the fundamentals, and understand what you want to get out of investing. If you do so, you’ll be a long way down the road to success.