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How to Decide the
Amount of Your Investment.
Many people, who are investing for the first time, feel that they
should put in all their savings into their new investment plan.
This is not quite true. To decide how much money you should
invest, you should first be aware of how much you can spare, or
afford really, to put away for your new investment program. You
should also give it a serious thought, as to how much you would
like this money to grow and within what period of time. This way
you will be able to know what your financial goals are. Only then
can you decide how much you should put in for your investments.
Let us first take a look at how much money you have which you can
spare at the moment for your investments. Do you have enough
savings? If yes, then it is great news. Be that as it may, your
investments do not mean that you are stuck somewhere with all your
money being blocked in some investment. Remember the reasons for
which you were saving, in the first place.
To start with, keep at least 3 to 6 months’ running expenses,
which you need to live, stashed away in your savings account which
is readily accessible. Do not touch that money for your
investment. Never put in any money in investment which you might
need at short notice in the immediate future. Remember investment
money is going to be blocked for some time.
So to start the exercise of calculating how much money you can
invest, you need to look at your savings account carefully and see
how much you can really draw from this account for investing
purposes. It is another matter if you have another source of
income like an inheritance, which you have in your hands. Other
wise, money cut out from your savings is all that you have to put
in as investment.
Investment may not mean outflow of money for a single time only.
You will have to keep on adding more money for your investment
portfolio to grow. If you are currently employed you might count
on a part of your salaries in future to be added to your
investment plans. The best option is to talk to a financial
planner who will help you formulate a budget and help you decide
how much money from your future income, you can afford to invest.
The best advice which a financial planner can give you is that he
can prevent you from over-investing or under-investing in the
future. Usually, you may tend to invest more than you can afford
or may invest less that the desired amount to reach your financial
goals.
An important point to remember is that in case you run short of
money for your initial investment, look for other investment
options; but never borrow money which you will put in investment
or never touch any money which have not put aside for investment
in the first place.
Article Source:
http://www.imargin.com |
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