A lot of people make the mistake of diving into everything they see called investment without knowing or understanding much about what that investment is all about. Here are some things I think you can do before investing a dime.
Invest in yourself
What do you know already? What is your background? Are there things you need to understand before going into that investment? Investing in yourself means training yourself to discover and learn about the things you don’t know.
Training yourself is not a onetime thing it is a continuous process as you keep learning new things every time. You make mistakes you learn from it, learning is a process that never stops. Training yourself is probably one of the most important thing you can invest in life because when everything else goes, you still have it in you.
Acquire New Skills If Possible
There are investments that require you to acquire new skills so that you can be good at them, a lot of members on this blockchain have acquired writing skills, coding skills, graphic design skills, video editing skills and so much more because it helps improve their earning ability on the blockchain.
You might have learnt about a new investment opportunity that you have invested in because it looks great, you might also have seen an opportunity to earn more but you are faced with an obstacle of needing to acquire a new skill(s) to overcome that obstacle. Why not go ahead and acquire the required skill(s) so that you can get further ahead in your investment.
Learn From The Experts
Training yourself is one thing but knowing what to train yourself about and who is best to guide you is another thing. The internet has made learning very easy, it has also made it easy to learn crap or get misinformed. So, the best way to learn is to identify experts in your area of focus, get mentors that have a history of been successful at their field.
There are a lot of people I follow on this blockchain and I have learnt greatly from them by reading their post regularly and practicing the advice they dole out. Following these people makes you stay ahead and informed which in turn aids you decision making process.
Understand The Importance of Diversification
There is a common slang gamblers use in my country when they feel certain a number or a game is going to be a winner and that is Sure Banker. In investing, you must learn not to put all your eggs in one basket, you must learn to diversify your investment by spreading them into different forms of investments so that if something goes wrong with one you’ve still got others to fall back on.
In this regard, you must spread your investment so that you have multiple streams of income and not just one.
Understand The Power of Compounding Interest
A lot of people start eating their profit instead of reinvesting them. You see when you reinvest your profit it creates a multiplier effect on your initial investment because you capital keeps increase and in like manner your profit also increases.
If you are reinvesting your profit, it is easy to turn $100 to $1000 in a year but if you’re taking the profit away then your $100 capital investment might end you at just $200 in a year. Notice that in both cases hopefully your capital will grow but reinvesting your profit will propel it to grow even faster over time.
In conclusion, there are many lessons of investment you need to know that are not mentioned here. Time, gut feeling and other stuff that are hard to explain are also things you learn as you continue to develop with time.
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