In our previous article, we explained how you can make your money grow. Now that you know the reasons to invest, it’s time to take stock of your situation and your goals, so you can enter the markets with confidence.
Analyse your financial situation
Before making any investment, start by asking yourself the following questions: is your work situation stable? What type of contract do you have? How much is your monthly salary? Once you’ve answered these questions, you can decide whether investing is right for you, and how much you can invest every month.
Beyond the budget, it’s always a good idea to settle any debts and only invest with available money. Also, make sure you have some emergency savings before you start, which can serve as a safety net.
Did you know? You can even start by investing with small amounts with fractional investing.
Define your objectives and level of risk
Every investor is unique. As a result, your strategy depends on the goals you set for yourself. Are you saving for retirement? Or to buy a house? Perhaps a college fund for your children? Asking yourself all these questions before you start will help you find the most suitable path for your investor journey.
Based on these clearly defined goals, you can create a tailor-made investment plan that will motivate you over the long term.
You should also determine the amount of risk you’re willing to take in order to achieve these goals.
Know your investment options
Building knowledge is a good way to start with investing. You can read about the different products available, such as stocks and ETFs, for example. It’s important to be able to differentiate them and understand the various benefits and risk levels of each.
In other words, understand that there are different investment options for all types of risk tolerance.
Don’t panic: you don’t need to take a finance course nor be a pro to understand how investing works. In our next article, we’ll reveal the four golden rules of investing that will guide your first steps in the markets. But before, why don’t you test yourself with our quiz?