When I was about 20, I decided to take a trip into the world of investing. I knew a little about it after researching investing tips and such on the internet. I ended up opening a Sharebuilder account and purchasing some stock with my tax return. After a few months I became low on cash and wasn’t financially prepared with a budget or emergency fund. I ended up selling the stock and put up my investing shoes. During that trip the stock actually lost money and I also had to pay a fee to sell it. As you can tell I wasn’t prepared to invest at all.
Do you have a budget?
I went the wrong way on the financial railroad. I should have first set up a budget to get my spending straight. I was definitely not spending my money on what I should have been and didn’t have any money to save at the end of the month. Now that I have a budget set up to follow and I’m not spending frivolously, I’m one step closer to be ready to invest again.
Do you have an emergency fund?
When I became low on money I had no place I could pull money from other than my investment account. What I should have had was an emergency fund. If I had just $1000 in a savings account I would not have had to sell my stocks. Having a cushion to keep you from selling stock to survive is important. Now that I have that available to me I’m about ready to invest again.
Do you have any consumer debt?
At the time I didn’t have any credit card debt so I didn’t have to worry about this. But if you have any consumer debt it’s much more important to pay down than to invest.
Now it’s time
Once all of that is taken care of you can start learning to invest. Research on the internet the different types of stocks and once you feel comfortable that you know what you’re doing then open up an invest account and start investing.
The fees to invest can get high so if you don’t have much money to set aside like me, you can put a little bit of money into a savings account every month and in a couple of months make a stock purchase. That way the fees don’t take as much out of your investment as if you were to purchase stock every month.
If you’re interested in learning the stock market, check out my eBook Your Guide To Investing
Have you had any investment mistakes you’ve learned from?
The post How To Know When You’re Ready To Invest appeared first on Financially Poor.
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