If you are serious about becoming just financially free or even wealthy then becoming a good investor will surely get you there. Investing is a form of passive income that you can use as leverage. Most people that have become wealthy got there by leveraging passive income. With that being said, investing is not for everyone.
Here are 12 things to consider:
1- Debt elimination:
If you are deep in debt or are just barely getting by, then you should hold off until you can free up some funds to start with. Before you are able to make any additional income, you should eliminate any outstanding debt outside of a mortgage or car loan. For people juggling bills, it would be best to increase your current income by working a little overtime or even taking on a part time job to raise extra funds. Use your present income to pay your current living expenses and your extra part time income to put down lump sums payments on your debt. Once your debts have been eliminated, now it is the time to invest.
2- What Can You Afford?
What can you afford to lose? No one wants to think about losing money but this is a part of life. Sometimes it will cost us to learn. Top investors have all lost money here and there and in fact still do every now and then. Now after you have paid all living expenses and found extra income, how much can you really afford to lose just in case something went wrong? Spend no more than you are willing to lose comfortably.
3- Choose Only One:
Start small by taking baby steps. Pick only one area to invest in once you have found income to play with. There are many places to choose from like: stocks, bonds, real estate, currency trading and precious metals. Choose only one that interests you. Have you ever heard: "jack of all trades but master of none?"
4- Educate:
Now it is time to educate yourself in this area. You want to learn as quickly as possible about what you are getting yourself into. Do not leave any room open for failure. Once you learn about this form of investing and it still feels right for you, then start pursuing it.
5- Take Action:
Now that you are educated in this area, it is time for action. The experts say that knowledge is power but it really is only potential power. It is only power unless you apply it with action.
6- Start Small:
As I said above, take baby steps. Learn how to walk before you can run. Invest a little to test how fertile the soil is where you intend to go. If it starts to bring you an increase over time, invest a little more.
7- Have Patience:
Do not expect to become a millionaire overnight. Anything worthwhile takes time to grow and harvest. Your first year can be your learning curve and it still doesn't end there. Professionals are always increasing their skills and expertise by constant never ending growth.
8- Do not place all your eggs in one basket:
Do spend all of your money in one place. Sure become a master in one area but that doesn't mean to take a gamble with your life savings. Keep your nest egg safe if you have one.
9- Repeat:
Now once you have found a good match with a venture and it starts to give you a steady return, invest more into it or find another one and repeat the steps above.
10- Model:
Look up successful investors. Read there story about how they got started and what they did. Take similar steps and you will have similar results. Study and model these people if you are truly serious.
11- Network:
Network with other investors in your niche for support. The more you learn the less you lose. Risk is a part of life. Nothing is secure. The bigger the risk, the larger the reward will be for you. The best way to cut down on risk is to make fewer mistakes. The best way to learn what not to do is by leveraging other people's mistakes. Join forums and start networking today.
12- Keep the Tax Man happy:
Now once you have found an area to invest in and have become successful, find out from a qualified tax professional how to treat investment income. This income is an income none the less and you can sure bet that the authorities want their cut from your profits. Tax pro's or chartered accountants would be the best people to advise you how and what you can legally write off in order to keep most of your hard earned money in your pocket where it belongs.
Article Source: http://EzineArticles.com/expert/Rory_Singh/186216
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