Investing the right way. How to do it well

Billionaire Warren Buffett is a good example for value investing. Buffett gives a good example of value investing that other people should pay attention to. Buffett recommends that we buy low and sell high. Sadly, many investors tend to let emotion handle their financial decisions. This causes them to buy when others are buying, and sell when others are selling. When we buy when others are buying, we get a high priced Apple stock that is not really a good deal. When we sell when others are selling, we get a trashy Kodak stock that just went bankrupt. The key to becoming the investor that succeeds is being a shareholder in Apple before they became successful. It is selling Kodak stock before the rise of the digital camera. All of these things are what the biggest investors do well.

If you do not know how to begin stock investing, think about something practical in your life that you can try this principle with. A good example is food purchases. Most people are eagerly buying sweet and popular premade meat products. They are eagerly ignoring bitter and unpopular raw vegetable products. A smart investor would buy mostly raw vegetables and sell sweet popular meat products during the day.

The best investment models buy something unpopular, and then they convert it into something very popular. The worst investment models take something popular, and then they convert it into something very unpopular. Evaluating your personal financial practices to see how you are doing in this area can show you the things that need to improve. A person who is smart will take a job that others do not want, and give others exactly what they want. A person who is foolish will take a job that others desperately want, and give others exactly what they do not want.

If you do not know what is popular, look at the universals of marketing. The universals of marketing include survival, protection, freedom, pleasure, relationships, and likability. These are the things we should be selling to be a great investor. We should also be buying danger, slavery, suffering, enemies, and unpopularity to be a great investor. Why? These things have a low purchase price because no one wants them.

There are different great companies to try stock investing cheaply. One of the recent ones is Robinhood. Robinhood lets you place trades from the convenience of your smartphone without having high fees bothering you.

Robinhood puts the investing market in the hands of the common person. If you are curious about how to begin with stock trading, remembering the buy low and sell high principle can go a long way toward removing the issues you are having.

Too Much Savings?

Is there such as thing as having too much money in savings? The answer is yes! A savings account does not make your money work for you like it can elsewhere. Sure, you’ll receive interest, but it’s nothing compared to what you could be doing with your money. Below you’ll find a guide to savings – how much to have on hand and what to do with all the rest.

How much is too much?

This answer varies from person to person. A good rule of thumb is to have at least 6 months worth of necessary expenses on hand. Having this emergency fund in savings provides you with quick access to money should you need it for anything or in the event of losing your job. Other than this savings account, all extra income should be put to work and earning you more.

Certificate of Deposit

For short term savings goals, you should talk to your bank about a CD. These insured deposits are held for a predetermined amount of time and mature at varying rates. No matter what, they have more of a return than the interest on a normal savings account. If you’re planning to save for up for a larger purchase in the next few years, a CD is your best bet.

Invest for the Future

Once you establish your short term savings, your next priority is to invest for retirement and the future. Investments take much longer to grow, but the returns can be substantial. When investing there are many different options to chose from. The most common are IRAs and 401ks. If your employer has a 401k plan set up, you should be contributing to it and benefiting from whatever match they provide.

Working with a wealth advisor is a great option for all other types of investments. They have experience growing wealth and can help you set out to achieve your financial goals. The biggest thing to take into consideration about investments is your risk tolerance. Riskier investments provide much larger returns, but you may very well loose that extra money if the investment does not pan out. There are plenty of moderate to low-risk investments that can still put your money to work for you.