HOW TO IMPROVE YOUR ECONOMIC PERFORMANCE THROUGH FINANCIAL INVESTMENT?
Do you have problems structuring and estimating the cost of your project? Are you unsure what kind of funding you can apply for? Are you looking for the best fundraising strategy? Personal finance management is mistakenly viewed as “a rich man’s business.” Whatever your monthly budget, you can invest by following a few very simple guidelines.
PRIMORDIAL REMINDER: THE DIFFERENCE BETWEEN SAVING AND INVESTING
Savings and investments have nothing to do with it. Saving is constant access to your money. Investing is a desire to make a profit and increase your money.
In case of emergency, savings are needed. However, in this article, we will focus on economic performance through investment.
SET GOALS, MAIN RESULTS
Before any investment, it is necessary to define your own investor profile. Here are the questions you will need to ask yourself to be in the best position for your needs.
ESTIMATE YOUR INVESTMENT AMOUNT
The first thing to do is set an investment goal based on your profile. Think about how much you are willing to invest, keeping in mind that it will not be available to you for a while. When you think about it, you must be aware of the risks that you are exposing yourself to in your investments.
Investments include liquidity risk, an operational risk of projects that may lead to lower-than-expected profitability, and risk that may amount to full or partial loss of the invested amount, as well as non-payment of interest. So above all, check your financial capabilities before investing.
SET CONSTANT GOALS
Beyond the initial investment amount that you define, you can define a monthly plan to invest. To start, you can apply the 50/20/30 rule: 50% of your monthly income is dedicated to your needs, 20% to your savings and 30% to your desires.
DEFINE THE DURATION OF YOUR INVESTMENT
Once again, you will no longer have access to money invested during a predetermined investment period. Hence, you must think in the short, medium and long term about your financial needs and establish an envelope according to each investment period. For example, you may well invest a certain amount in a product maturing within 6 months, another amount repayable within 2 years, and another amount within 10 years.
DIVERSIFY YOUR PORTFOLIO
Once the investment amount is determined, you can think about the distribution of it. It is very important to diversify your investment by choosing multiple resources and products. They can materialize in the form of stocks, cryptocurrency, crowdfunding projects, gold, real estate, etc. The more varied your portfolio is, the more secure your investments will be.
- DO NOT BELIEVE YOU ARE STRONGER THAN THE MARKET
The best investment strategy is to find a balance between your performance goal and its duration. Of course, an investor will look for the most effective investments, but be aware that the more interesting the rate, the more the risks will be. Sometimes you must know how to keep it safe! No need to check your portfolio every day, your investments will inevitably fluctuate. So, you don’t have to worry about daily trends.
REGULARITY IN YOUR FINANCIAL MANAGEMENT
We also advise all investors to set aside time for their financial management. Each week or each month, block an hour in your calendar which will be dedicated to the management of your finances. In an account book, write down your assets, your income, and the amount you would ideally like to save. There it will be easier to follow your progress. Thus, you will be able to reinvest your interests according to the products that will offer you the most satisfaction, so you will become an ace in financial management!
DO NOT HESITATE TO ASK FOR HELP WITH YOUR INVESTMENTS
If you feel the need, know that you can also use the services of a financial advisor to make it easier to compare the different products. Its mission is to inform you about resources and their risks in accordance with your goals and needs. Before starting any procedure, you can check their status as a financial investment advisor (FIA), their registration number. Through our Solstice Consulting projects, we work regularly with FIA IN France and Europe to find out more about our consulting missions and our team contact us at firstname.lastname@example.org.