How much? Its a good question, don't you think?
First of all you must know how much you have. Let me explain, you must know how big your income is, how big your expenses are, do you have any savings, are you in debt, in other words it's called financial management plan. You must know how much you have so you could decide how much you can invest in stocks.
If you have money to cover your expenses in three to six months period only then you can go and invest your money. I'll explain you why.
For example you have $1000 dollars. To cover all your expenses in one month you need $950 dollars. The you decide to invest $200 dollars in stock market. After two weeks your friend invites you to a big party you spend extra $200 dollars on gift and clothes then you understand that you are running out of cash. If you haven't invested that $200 dollars you probably would make till next paycheck but now you must go and borrow money that you could survive till the end of the month. When you get your paycheck you pay down your debt which was $200+interest= $220 dollars in that same time your invested money has grown to $210 dollars in the end you lost $10 dollars.
We can continue like this forever. The message is before you invest your money you must have Sufficient savings. That means that the amount of readily accessible money or credit that you would need in case of an unforeseen emergency. This money, usually three to six months worth of expenses, should be kept in an easily accessible account, and collecting it should precede any investments.
And make sure that the profits you are making from your investments are not being used to pay higher interest rates on debt you are currently carrying. Determine where your money is best applied.
The best thing to understand how stock market works to you can try paper investing. It means that you are buying stocks with virtual money you can make your own portfolio and see how good your decision were.
Amassing a fictitious portfolio, of paper investing, based on information you have learned is a good idea for new investors. Analyze you portfolio's performance to determine how good your initial investment decision was
Free three tips
# Investments are only one part of responsible financial management.
# Before investing, you should have savings of three to six months of living expenses.
# Lower or get rid of debt. The interest you pay on it may negate any profits you make from your investments.
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3 comments:
Hi !.
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There is no need to invest much at first. You may begin to receive yields with as small sum of money as 20-100 dollars.
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Good day !.
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Hi there!
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I don't have problems with money now, but there are heights that must be conquered . I make 2G daily, and my first investment was 500 dollars only.
Right now, I managed to catch a guaranteed variant to make a sharp rise . Visit my web site to get additional info.
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