With the stock market on a seemingly endless rollercoaster ride and millennials being bombarded with investment advice from all directions, it can be hard to figure out whether now is the time to take the plunge and start looking into home loans for investment properties. It’s important to understand that investing isn’t a one-size-fits-all endeavour, so you’ll need to create an individualised plan that’s tailored to your financial goals and risk tolerance. Here’s a helpful guide on how you can determine if you’re in a position to invest.
Do Your Research
Investing may seem intimidating at first, but don’t let that stop you from doing your research! Read up on different types of investments – stocks, bonds, mutual funds, ETFs – and familiarise yourself with how they work. Make sure you understand how each type of investment works and decide which one best fits your needs. Also become familiar with terms like “diversification” and “portfolio construction” so that you have a better understanding of what kind of portfolio suits your desired level of risk.
Analyse Your Current Financial Situation & Understand Your Risk Tolerance
Once you’ve done your research and know what type of investments are right for you, it’s time to take an honest look at your current financial situation. Where do you stand financially? Do you have enough money saved up for an emergency fund? Are there any debts or expenses that could hinder your ability to invest? When analysing your current finances, make sure that any money set aside for investing is separate from money allocated for other needs/expenses. This way, if something unexpected happens, your savings won’t be put in jeopardy.
Set Achievable Goals & Stick to Them
Creating achievable goals is an important step when beginning any new endeavour – investing included! Do some soul searching and figure out why exactly it is that you want to invest. Are you trying to save up for a house or retirement? Make sure these goals are realistic given your timeline – setting unrealistic expectations can lead to disappointment down the line. Once these goals are set in stone (or rather paper), stick with them! Don’t get discouraged by short-term losses or give into emotional impulses – make sure every decision made along this journey is rational and serves the long-term goal(s) that were established early on.
Investing can be nerve-wracking but also incredibly rewarding if done correctly
Remember that any good investor needs strong research skills as well as knowledge about their own personal finances in order to make informed decisions about where their money should go. Set achievable goals then dive right in! With any luck, you’ll reap the rewards down the line. Good luck!