Achieving financial freedom and independence is everyone’s dreams. Though, this has not always a walk in the park. Accumulating wealth starts from the mind.
Saved income or loans (other peoples money) are mostly used by many investors as a way of accumulating wealth. Most popular wealthy individuals such as Warren Buffet are a living testimony of investing from a young age.
So what really is investing? Investing in layman’s terms is, using what one possess to earn an extra return. For instance, lets assume that you have $100,000 and you expect $50,000 return on investment by the end of a particular period. The $50,000 is called a return on investment while the $ 100,000 is the investment amount. The whole process is known as Investing.
The journey to growing rich
How then can you start the journey on investing? Its highly recommend for one to follow three simple strategies.
1. Invest in your time and in yourself.
invest your time in researching the available investment options out there. invest in educating yourself.
2. Create a plan for your investment.
it is said that an a not so very wise person with a plan can beat a genius without a plan. so start planing whether you are a genius or not.
3. Focus on at least three major types of investments to begin with.
That can be businesses, stocks and real estates.
let me warn you though,the journey calls for one to have a burning desire and remain persistent and have patience.
Strategy #1: Keep control of your time.
Time is gold.
In fact, it’s well known that human beings have the capacity to make more money but lack the capacity to make time. In this regard, time is the most valuable resource.
A sophisticated investor knows how important it is to use the aspect of time to maximize on their returns.
Just like you have invested this time to read this blog, you can also read financial books or even business updates on newspapers.
Furthermore, attending business seminars, participating in investment related challenges and involving in network marketing to build your net worth.
Note that i have said network marketing and not scams. Learn how you can spot a scam by clicking here
Every minute, when well utilized with an intended purpose to acquire new profitable skills is an investment.
Strategy #2: Come up with a financial plan
Ever wondered where to start on your investment journey?
Having a financial plan is the key. A well outlined financial plan is very essential and ensures we adhere strictly to our plans. A personal financial plan should contain these steps which should be applied effectively.
#1: List down your specific financial goal, i.e. the amount of money you intend to accumulate with a set date.
#2: Create an emergency fund to cultivate the culture of saving and being secure during uncertainties.
#3: Pay off your debts.
#4: Outline a plan of what to include in your asset mix and how to diversify your portfolio.
#5: Plan ahead for the taxes to create tax loopholes.
#6:Review and always revise financial plan frequently.
Strategy #3: Focus on the Big three.
The business world has also applied technologically related advancements such as e-commerce. Cryptocurrencies, forex trading and network marketing.
On the other hand, pyramid schemes, gambling sites and investment platforms that are scams have also rapidly increased.
Are we supposed to invest in something we don’t fully understand?
Here is my advice, always invest in something you really understand well. Thank me later.
Here are big three investments you can focus on. In fact, they are known to have been used as stepping stones for most millionaires and billionaires who still hold their wealth in their form.
Firstly, Invest in Businesses; Being an entrepreneur is a boss move. Most wealthy individuals have one time or the other involved themselves in entrepreneurship. You are never too young to start a business. All you need is to identify a business opportunity and don’t hesitate to embrace it.
Secondly, Invest in stocks. In your twenties, it’s not too early to start making returns from the securities market. For one to participate, all you need is to have a CDS (Central Depository System) account which links your bank account and the security market.
To find out more about inveting in stocks click here
A good example of a security market in Kenya is NSE (Nairobi Securities Exchange). For one to maximize on the returns, there are various strategies applied such as buying the undervalued shares.
Lastly , Investing in real estate
This is one of the most stable forms of investment one can ever get invest in.
Real estate involves buying or selling real properties such as lands and apartment buildings. The major benefit of investing in real estate is that investors have a greater control over the form of investments. Plus it is a form of passive income not forgetting recurring income.
In conclusion, as a young investor, always remember to use the three simple strategies and most importantly, ensure you understand what you are really investing in. That’s enough for today. Go ahead and make a move on your investment journey.