A Full Financial Guide to Help You Pick the Right Investing Plan

Unfortunately, throughout our education, we learn a lot about geography and history, math, and physics, but never how to put that knowledge to use and how to manage day-to-day financial struggles. Once we set out to live a single life away from our parents, most adults find it extremely difficult to navigate through their finances, even with a college degree. And the reason is simple: we are financially illiterate. Don’t worry, it’s nothing to be ashamed of, as knowing nothing regarding finances gives you a great starting point – point zero. From that point, you can only go up, and with the right guidance and advice, you can achieve amazing success in a short period of time.  

As Warren Buffett once said: “Don’t invest in something you don’t understand,” and motivated by these words, we took it upon ourselves to present you with a useful guide on how to make the right investment plan. 

Where should you put your money?  

Generally, there are two types of investments: traditional and alternative ones. The first is known to most and includes bonds, stocks, and cash deposits. Bonds are the safest way to go for many and present a fixed income you can count on. They are usually simple loans between the investor and borrower with defined rules and requirements regarding payment. Imagine you lent money to someone. The person then invested the money in various projects, and you, in return, required a monthly fixed payment that included a small percentage of the person’s earnings from their projects. Bonds are often an investing tool used by huge corporations, governments, states, companies, and credit holders. Cash deposits are well known to most, and banks are more than eager to accept the deposits. With interest rates you can count on, you’ll have an investment that rarely goes sideways and gives you peace of mind. 

For the brave ones, who are handling stress very well and can live with the feeling of possible failure, stocks are an amazing way to make extra money and score real success. Most millionaires/billionaires started with the stock market, some becoming rich overnight. However, we cannot stress this enough; stocks come with their risks, and not every stock investment is a fairytale come true. If you don’t know anything about stocks, usually people spend hours on research, reading Wall Street journals, or simply pay a broker to deal with them. Or, as we live in the age of digitalization, you could look up stock advisor tools available online. As the latest Motley Fool review suggests, online stock advisors are giving you unique stock recommendations, data analysis, and in-depth reviews, and presenting you with an overall picture of the current stock situation. These online tools do not offer financial services as a broker does, but rather they are a vast library with many recommendations and noted changes in the stock market. You can customize them once you subscribe, and they require constant updates on a daily or weekly basis. It spares you the time you would otherwise spend reading and researching and motivates you to start immediately. With such an easy-to-follow display of data, investing becomes a piece of cake. One last thing, investing in stocks is never a gamble like some think. Rather, it is a very calculated and precise science where you sometimes (not all the time) have to follow your gut on certain investments. 

Alternative investments

Alternative investments include everything else of value that can generate revenue over time. Real estate, collectibles, private equity, investing in start-up companies (venture capital), and all the commodities you find have value. For example, have you ever wondered why millionaires are obsessed with art and rare objects? Yes, some are really enthusiastic regarding these objects and think of them as a hobby, but also, these commodities have a certain price value which rarely drops. 

The arts are especially valuable, and there is a steady market for them. This also applies to all artifacts and collectibles, which have a buyer base. As the name suggests, these investments come with a certain risk factor, yet as you grow in revenue, you’ll find it extremely beneficial to invest in new and promising ideas. 

You’ll need to leave it alone 

There’ll be a period when your investments have to stay completely untouched. This period of time allows the investment to grow and generate more revenue. Unfortunately, what most people do is, at the slightest sign of revenue, they pull out the investment in fear of losing it, or even worse, they take the money and spend it on trivial and arbitrary things such as going out or clothes. Investments are supposed to grow only if you let them, for a period of time. A reasonable return can be expected only in the long run, and you’ll see a real profit months after you’ve made the investment. Yes, there are exceptions to this rule and there is a possibility for short-term returns, but it’s not steady nor secure as such investments often involve a high-risk factor. Once the money you made from the investment starts bringing in even more money (compounding), you’ve scored a true success and can hope for even more profit in the near future. 

Set goals 

At some point, you’ll need to set a financial goal and make a plan. Never get into investments without any idea of your long-term goals and what the purpose of the investments is. If it is supposed to be only additional profit to your already steady monthly paycheck, like a “side hustle”, you’ll go for something secure and less stressful. If you, however, plan on doing this in the long run and you see your investments as a “get-away” card to free yourself from the corporate rat race and buy free time to travel, you’ll then have to be completely devoted for a time until the investments generate enough profit for you to retire. This is especially important as a large portion of the population is struggling to find an additional income stream in retirement, forcing many to work even after reaching a certain age. Save yourself this destiny and think of making a security plan which will ensure you all the time and money you need and desire.

Also read: What types of options are available for emergency loans with bad credit

Enrich your portfolio 

Most financial advisors will tell you the same thing: you’ll need to enrich your portfolio, i.e., choose various and different assets. The more diverse your portfolio is, the higher the chances of scoring a true profit. Adopt different strategies, invest in more things, and wait. This tactic allows you a constant flow of different income and revenue. Sometimes you’ll catch yourself not knowing where the money comes from. It’s definitely a safe play and doesn’t involve many risk factors, as some of the investments must surely succeed. 

To conclude, investing has always been a part of economics and is actually what makes the world go round. We understand that not everyone is meant to play the “game”, but the fact that you spared time to read all this is a good indicator of your possible potential; otherwise, you wouldn’t bother.