How to Become an Investor: Advice for Success
If you want to know how to become an investor, you should strive to be successful. You’ll be surprised how easy it is. Here’s some advice you need to read.
Now imagine your grandparents had invested $2,000 70 years ago. Where would you be now financially?
Investing allows your money to work for you and build long-term wealth. But learning how to become an investor can be overwhelming. There are no guarantees, but that doesn’t mean that there aren’t proven ways to give yourself advantages.
We put together some tips and tricks that will help ensure you not only survive the marketplace but thrive financially.
Make Investing Personal
If you’ve made decisions in your personal life based on your Myers-Brigg Personality Test, it may excite you to know that there is a personality index developed by fund managers Tom Bailard, Larry Biehl, and Ron Kaiser.
When you start investing knowing yourself will actually help guide your investments. Here are some items to keep in mind:
- What are your long-term savings goals?
- Are you a risk taker or someone who likes to play it safe?
- How much time do you want to commit to managing your investments?
Knowledge is power
When people ask “how do I become a successful investor?” they are often looking for a magic bullet, when they should really be asking “what are successful investors reading?”
Knowing if your investments are high risk, medium risk, or low risk will help to prevent irrational trading based on the fear of losing your entire retirement savings. Additionally, knowing the way that your stocks or bonds are structured puts the power back in your hands and allows you to research market trends like a pro.
Make a plan and stick to it
A successful investment strategy alleviates a lot of stress and uncertainty that often accompanies new investors.
When forming an investment strategy it is important to look at all your options. Diversifying your investment spreads risk and allows for different areas that can be built upon as you become successful.
Diversifying not only refers to different companies. Diversifying effectively includes different stock and bond types, even investing in cash strategically.
Be in it for the long haul
Did you know that stocks that you hold onto for only one year carry a tax rate of 25% to 28%? Now consider that stocks held for longer than one year are only taxed at 15%, which makes tax season 10% more rewarding.
Successful people are successful investors, and one important trait all movers and shakers share is perseverance. Knowing how to rebound from losses helps an investor maintain their cool in a bear market and experience the long-term benefits of compounding interest.
It pays to stick it out in order to avoid costly taxes and fees associated with moving money.
Ready, set, go!
Congratulations on taking the first steps towards becoming an investor!
Taking control of your financial future is more accessible than ever with M1 finance. No matter who you are you can achieve your long-term goals.
Now get out there and start making some money!