Investing for beginners

Take these tips into account to act intelligently.

You’re considering the investment because you’re ready to invest part or all of your savings to make a profit and expand your money. This is what you need to know to invest intelligently.

Are there safe investment options for beginners?

Investments for beginners, like any other, must be made with calm and knowledge. The more you know about the alternatives, the more you can get from them.

You would think that a safe investment is the one that gives you the least risk; however, the ideal is to have diversified investments, not to bet on a single winning horse but to deposit your money in different financial products.

Even if you are not an expert, you must rely on a financial advisor and understand his advice. To guide you and so that you can investigate in detail, consider the following investment options for beginners:

  • Investments in gold or silver Precious metals are considered safe investments because their value increases over time. However, the risk you run is your protection, and at the time of recovering your monetary value, you must have a correct valuation. It is at this point that you can lose money on the investment.

  • More for your retirement savings account The aforementioned individual account is an investment mechanism to increase your pension amount at the time of retirement. Even though there are set quotas that the government, the employer, and the worker themselves contribute to the account, it’s crucial to make an effort to make voluntary contributions that increase the amount of money to invest.

  • Invest in government instruments. The Bank of Mexico issues debt instruments called Treasury Certificates, or Cetes; in simple words, it is a loan of money that is given to the federal government for a certain period, and at the end, the total is returned plus interest.

  • Property investments
    If location, services, and assessment are properly assessed, a property is a secure investment for renting, selling, or consolidating.

A correct projection of its value in the future will,

over time, allow you to have a higher-cost property, allowing you to sell it to form a larger inheritance.

If you are a government worker, ask Kondinero for a mortgage loan that suits your possibilities for making a safe investment by acquiring a property.

Basic investment concepts

Before investing, you should learn the following investment market terms:

  • Investment instrument: it is the means through which you invest your money.
  • Performance: This is the profit obtained from the investment of your money.
  • Risk: It is the probability of loss associated with your investment.
  • Liquidity is the ease with which you can dispose of your money, for example, daily, monthly, every 3 months, annually, etc.
  • Term: It is the period during which you keep your money in an investment instrument. There are short-term investments, which are less than one year; medium-term investments, which last between one and five years; and long-term ones that have an option of more than five years.

Based on these concepts, you can better identify and understand the instruments the market offers, compare products, and diversify your options to reduce risk and take care of your liquidity.

Now that you know where to invest your money, it is necessary to be clear about the basic concepts of finance to make a smart investment.

Initial considerations

  1. Do not put your financial stability at risk for wanting to invest; remember that the money you use must always be greater than the amount you allocate to live.
  2. Specify how long you want your money invested to get greater returns.
  3. A higher-risk instrument usually gives higher returns, which are related to the availability of your cash. Remember, the longer the period in which you leave your money intact, the more profits you will get.
  4. Know your level of risk tolerance. To minimize stress and suffering while investing, enjoy and believe in your investment.

Establish an investment plan.

How do you know how much you want to earn, for how long, and how much you may invest if you don’t make a plan? Three steps are essential to starting your investment:

  1. Identify the status of your finances by making a budget.
  2. Set goals to give your investment a purpose, so you will define what you want to invest for and when you need your money.
  3. Determine an initial amount to invest so that you can gradually maintain or even increase it with your savings.

Start with a small portion of your monthly surpluses or savings and gradually increase your contributions to earn more.

How to Make an Investment Budget

The investment budget will help you make an estimate and monitor your progress without the need for specialized knowledge in finance. Doing so helps to break two of the most common myths about investments:

  • Investing is a decision that involves risk. Certainly, every investment has a risk, but with an investment budget, you ensure an investment determined based on the compensation that the risk entails, which you can control.

  • Only professionals have an advantage. The reality is that there are different ways to invest, for example, in savings accounts, fixed-income bonds, or even real estate. So, what is a financial budget? What are the advantages for people who have an investment budget? An investment budget is a weekly, biweekly, or monthly estimate and control of the amount of money you will invest in a financial product, real estate, or business.

Investment budget in 6 steps

Making an investment budget helps you keep track of your investments and thus improves your ability to save, invest, or control your finances. It is done as follows:

  • Step 1: Identify your income and expenses; consider your payment obligations in case you have debts; and consider your possibilities for savings or investment.

  • Step 2: Set goals and define the investment purpose. For example, generate an extra income, buy a long-term home, or plan retirement.

  • Step 3: Enter the money, return, and timeframe after selecting an investment.

    If you invest in a financial institution’s investment funds, allocate savings to each “investment vehicle” to reduce risk.

    Step 4: After you have the final investment amount, raise your budget savings to dedicate them to the investment and speed up your earnings.

  • Step 5: Invest any extra money. If you obtained any extra income, consider it within the budget to generate a greater investment return.

  • Step 6: Keep track of your investment budget. Tracking your investments and their success will help you budget.

The two main mistakes in investing are investing without an investment plan. Without a plan, investment risks losing money without recognizing it.

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