Makes the leap from saver to investor

Learning to invest is neither an elaborate nor an objective process that can only achieve a few.

If you are the people who already managed to make a “stash” or you can allocate a monthly savings amount, do not hesitate and makes the leap saver to investor.

Learning to invest is neither an elaborate nor an objective process that can only achieve a few. There are no investment options require prior savings to open a contract, and you can make contributions from $ 100.

Saver to investor
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However, it is importance have a basic knowledge to get started in the field of investment in the best way, here are some:

Never invest: Know what you want to do, what your goals and the term you want to achieve each are, will help you identify which instruments put your money. Not the same investing to ensure college education for your newborn to invest to buy a car; In the first case you should think long – term investments to ensure you have the amount you need time; in the second case instruments of short or medium term.

Set realistic goals and deadlines: If you want to hitch a house in six years (collecting $ 350,000 for a department with a commercial value of $ 1,000,000) you may have to seek new sources of income to generate the necessary savings, analyze purchase options accessible or lengthen the deadline. In the case of generating more income you can consider options such as doing work outside the office, teach, sell something weekends, work some “extra” hours, and so on . The point is to exploit your abilities to generate more revenue.

Every time you achieve a goal, big or small it is, will be an incentive to go for more. The goals are very dependent life cycle in which you find yourself: youth (start of your working life), maturity (top of the career ladder and income generation), and pension or retirement (dis-saving). It is advisable to start with the simplest and go climbing to achieve your greatest financial challenges.

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Protect your purchasing power by investing in options you pay an equal or higher than inflation (general increase in prices) performance. Taking as reference the annual inflation rate is about 4%, the yield it pays on average voluntary savings account (6.5%) currently exceeds this figure. Investment in slightly above inflation both options protect the purchasing power of your money and add value.

Note that average inflation does not necessarily correspond to your personal inflation, which depends on the type of goods and services that used to consume every month and how it is behaving cost (price) over time; and the percentages of income destine to each. The products you consume are not necessarily the same believes the Bank to calculate the average inflation in the country.

Invest according to your investor profile: In addition to the goal and term need to invest adequately meet; identify elements such as your level of risk tolerance, age and financial situation. As you know there are basically three investor profiles:

  1. The conservative is one who is less willing to “support” the risk and invests predominantly in debt instruments.
  2. Moderate, it is a bit less risk averse and invests a moderate percentage of their money in debt and equity (shares).
  3. The aggressive, who wants to earn more, so he is willing to take more risk and allocates a greater percentage of their investment to equities.

Someone may suggest that it is better to invest in a fund indexed to the CPI investment because the stock market has historically paid, on average, a yield of 20% annually. True, this rate far exceeds other investment options. However, the stock market is a riskier alternative to consider.

Experts recommend earmark a portion (never 100%) of your investment in the equity market in terms of more than three years.

A conservative investor can invest as aggressive long-term goals such as college education for your children or to finance their retirement. And an aggressive investor could invest with a highly conservative strategy to achieve goals whose term is for one to two years.

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Use the tax deduction mechanisms in line with your investment deadlines and financial goals. Not that you stop paying your taxes, it is deferring the medium and long term, and achieve better returns over time. For example, you can deduct additional contributions to your sub-account retirement savings for an amount of $ 113,752.25 or 10% of your taxable annual income and money destinies to a personal savings account that includes a period greater than five years for an amount up to $ 152,000 annually. In the end, and if you have the money, you pay taxes.

Invest in the right time: Do not invest long term you’ll need in the short or medium term. This aspect of investment is essential because of disregard it can see you forced to “lose” unnecessarily part of invested capital. An example: in building an emergency fund whose prerequisite is that is highly available, you could choose a savings account, a promissory note or transfer bank regardless of the rate they offer. No way could you consider investing money in the stock (shares or equity funds) or debt investment funds medium and long term.

Never invest in something you do not understand or that offers very high rates of interest (e.g. 10% annually) compared to what is in the financial markets. It may be fraudulent options.

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