During COVID-19, it may be the starting point for many people’s investments or it may be a good opportunity for investors who have already been in the market before.
Knowledge is both fundamental and important for successful investments, but I personally believe that “investment habits” are also an equally important fundamental element.
The correct and disciplined “investment habits” can lead to successful investments in the long run. This content would like to summarize what good habits investors should have.
1. Spend less than revenue
The first habit every investor should have is to “spend less than income“, not just to control spending, but to plan and control debt formation, which will burden the finances each month in the future. On the other hand, if there is more expenditure than income, the existing debt must be reduced. Then come back to start saving habits before using them later and plan to spend less than income, guaranteeing that each month there will be money left to save and invest.
2. Save first Use later
It is believed that most salary men have savings from the moment the salary is transferred into the account, that is, the deduction for savings in Social Security.
but I warned you that just social security is not enough.
so be sure to plan your expenses well to manage the remaining savings.
Savings first, Use later to help investors have funds either for investment or emergency use.
which is the first habit investors must have. In addition to promoting savings habits, it also helps to gain more knowledge. Without this qualification, a successful investment is almost no chance.
3. Have emergency reserves alongside retirement plan
During the economic crisis, Accidents, layoffs and many emergencies are beyond expectations, which all affect the financial position. Having emergency reserves is a must-have to deal with the unexpected. Professional financial planners recommend having emergency reserves for at least 6-12 months.
Emergency reserves should be increased with age, just in case of sudden job change that may take longer to find a new job. And take into account the benefits from employers missing out on unemployment, such as health insurance.
Once you’ve planned for emergency funds, which are short-term financial goals, you’ll need to make a plan for the short-term finance Let’s go ahead with a long-term financial plan.
but it’s necessary to plan for retirement. Start by estimating life expectancy and calculating the money required each month after retirement to meet a happy lifestyle. Compare current savings to whether it is enough for a retirement plan. Finally, regularly review your goals.
4. Diversify investments in multiple assets
Many people may start shifting their savings each month in a deposit account into an investment that has the potential to generate better returns, such as mutual funds, stocks, which help achieve financial goals faster, but “risky investments” are a sentence that investors hear about but reflect the truth in financial markets very well and would be a nightmare. If the money we save in stocks is falling,
If we’re afraid of risks that we don’t invest in anything, it’s not a good choice. In the case of low interest rates, this kind of cost burden , “diversification” is a simple but effective concept. It aims to prevent heavy portfolio losses from affecting financial targets.
which will see positive results during the stock market downtred or during the crisis.
5. Choose investment products with low fees
Once the diversifying has been completed. you can post the The portfolio consists of a wide range of assets.
such as domestic stocks, foreign equity funds, Fixed Income & Cash Fund Next, it’s the process of choosing an investment product.
“Returns are uncertain, but fees are definitely something (to lose) ” is a sentence that must always be thought of before making an investment decision.
Fees are something that we need to pay attention to before choosing to invest because choosing to invest in the same asset but the fee is higher. As a result, investors lose returns unnecessarily.
6. Trusted Investment Referrals
It might be better to have someone who advises on early investments. If we’re dealing with a market down during a crisis, or asset prices in the portfolio fall hard alone, we’re going to have to do something about it.
Therefore, the curator, in addition to helping to guide the financial direction according to the goals, will not be responsible for the financial direction. It also helps to be both a friend and a barrier between investors and the market at a bad time.
7. Use the maximum benefits available from the employer.
It’s a habit of salaryman investors not to miss out. Financial benefits divided into 2 categories:
Savings include: Provident Fund Savings Cooperatives are welfare benefits that encourage long-term investments to provide a living during unemployment or retirement. However, diversification and proportionalization of assets to best suit the risks they can take.
Social security, health insurance, life insurance are the most important benefits.
If you are sick or need medical attention, you should use such benefits to help reduce the burden of expenses, especially during this rapid increase in medical expenses.
Using employer welfare to meet their needs will help investors invest more for their lives and save a lot of money. This money can invested further.
Who started to create all 7 good behaviors that became habitual along with finding investment knowledge regularly? We will definitely be able to become investors who survive every crisis and succeed in the long run. thank you content from sixandover