If you have basic knowledge about investing and managing your finances, this article will help you sort out the advanced things for you. We wanted to make this suitable both for beginners and advanced people, so you can reconsider and take a look back to see what works and what it’s time to let go of when it comes to your spending beliefs.
To reassess your financial plan or create one for the first time, you need to be completely transparent with yourself and your spending habits. It can be a tough pill to swallow, but once you got over with it, you’ll see how clearer everything gets in your life and how you function in general.
We will cover various topics in the article to grasp everything you need to research more where you think you could learn more. We will talk about passive income, trading as an investment, the way you behave towards money, and what are the ways you can be on top of your game. We hope you will take some burden off your shoulders by knowing how to manage finances since they play a massive role in our lives. As you care about finances, you will have to be aware of market moves if you already aren’t. Let’s dive in!
Do you know what type of spender you are?
Do you tend to spend on whatever you land your eye on as soon as you get your paycheck? Do you live day to day and continuously get surprised when you need to pay for your bills and/or rent? It probably means you are an impulsive spender, and you tend to live in the moment. There is a deeper meaning behind that since you probably don’t want to think about a one-month spending plan.
We know it’s hard, but try to write down your spendings for one week or download an app and log everything, even if it seems unimportant. It can be how much you spend on coffee (if you are working from an office), random little things that don’t seem much. Try summing up expenses that are not that necessary, and you’ll see how much money you can save. This doesn’t implicate you should give up on small pleasures entirely, but try making it a “treat,” rather than a usual thing that became mechanical to you.
Trading as a way of saving
If you are someone who makes a plan ahead, you set aside money for bills as soon as you get paid, you probably know about money management. If you are trying to save or already have a savings account, then the stock market can be an excellent place to start saving even more. Yes, trading is considered as an investment, despite the popular opinion.
It can bring you lots of benefits, including saving for something in the future or merely having another “income” that can become a rainy day fund, vacations, or to learn more about the economy and how it affects everything around you while making money at a slow, but individual pace.
Before investing, it’s essential having an emergency fund because you never know what’s going to happen (we are amidst to pandemic, after all). Please try to pay off your debt (if you have one) as soon as you can, before you start investing, so you can have a clean slate.
Books and Stocks
Depending on how you like to learn new stuff, you should consider investing your time into educating yourself about the economy and politics on a higher level than just news. Everything that influences political bonds between countries affects your paycheck, the market, the world. If you consider yourself apolitical, consider analyzing this information as a way of knowing better where your money comes from and where should you invest it (and when is the best time to do so).
You can also read many books, but rather than reading stories about people who are already wealthy, try learning more about your relationship with money with “How to worry less about money” by John Armstrong, for example. Changing your perception of money will help you understand how to save more and maybe invest in stocks.
Why do people buy stocks in 2020?
Owning stock is equal to owning a small part of a company whose stock is. One stock can be costly, but you can invest a small amount of money, which means you still own a bit of it, and then you can investigate more about them and how their work is going, meaning you will be able to see if it’s profitable or not.
The stock market is speculative, so you shouldn’t rush into it and give thousands at once. It doesn’t imply you have to buy or sell anything as soon as you open your trading account. Investors generally control the stock market, so risk versus reward is bound to be. There are lower-risk investments, which means it’s very predictable, and you can make money, but a lower amount.
The higher the risk, the bigger the chance of earning more and losing, so the main rule is not investing more than you are ready to lose and not investing everything into one stock. If you are interested in this saving and investing, do proper research, and you will have another way of income, but you need to have patience.
Make it work
In the end, it’s about figuring out what you want, evaluate your goals once again, and check yourself before you “wreck yourself.” Sounds simple, but once you begin, you will see there is much more behind it. It may be hard at the beginning, but you will thank yourself later. Be smart about your money, and start now!