Having not been taught good finance habits as a child, I grew up a somewhat inefficient adult. I knew to be thrifty, and to make new of the old; I knew how to gain resources (on a budget). However, never had I been taught how to conserve those resources. Money, being an irregular excitement, didn’t last long when in my possession. Then, when I started getting older and getting more money, I still wasn’t saving for anything! Not things I wanted, and not things I needed. This has proved to be an issue in recent years, and I have been left to my own resources to discover a better way. Personal Finance has absolutely set me on the right path to be a financially sound adult.
1. SAVE, SAVE, SAVE!
Stocks and bonds are not the only forms of investment; do not be afraid to invest in your future by not investing your money into anything else. Being prepared both for the expected and unexpected financial hits is key to being successful. Save in advance for college, or a house, or a car, and avoid debt at all costs. Sometimes it is more beneficial to conserve all your resources than to take any chances with them, no matter what the return could be.
2. DO YOUR RESEARCH
Should one decide to invest their money into a company, my biggest piece of advice would be to research! Check out estimations of the immediate and long term future of the companies. Make sure you absolutely know what you’re doing before you put your money on the line. Know the difference between risky and dangerous transactions.
3. DON’T PUT ALL YOUR EGGS IN ONE BASKET
Hopefully, this is advice you have heard before; but if not, take heed! If you’re going to put your money on the line, you don’t want to loose it all in one fluke shot. You’re more likely to be a successful investor if you spread out your money across multiple companies; taking less of a hit should you be at a loss.
4. REIGN IN YOUR EXPECTATIONS
Be realistic with yourself and don’t build up impractical expectations. Keep in mind that greater risk can come about a greater return, but this does not mean one should make irrational decisions with their money. Again, know the difference between risky and dangerous transactions.
5. MAKE LONG TERM DECISIONS
Avoid acting on impulse, and make decisions that will benefit you in the long term. Typically this way, you will end up with a bigger pay-out, and will have made your times worth back in money.