Having strong financial habits will set you up for extended success and happiness. Here are some tips on how to best prepare yourself for the long haul.
Good Financial Habits to Implement for Investing
Don’t Strictly Ride the Wave
Something new and exciting is always happening in the financial world. You’re going to be eager to jump on some of these fresh and new ideas, whether it be something your friend told you about or an article you read about a novice investor making millions. The consistency of these waves falling through and becoming poor investments is very high. However, there are some worth investing in all the same.
Past Results vs Forecasted Results
The trick is to take your time and do research before you make an investment in anything. Prioritize a company’s past rather than its financial forecast. A company that’s been successful for twenty years and steadily improving its value has a much higher chance of being successful than one that just boomed onto the scene and is due for a significant dip.
Being Spontaneous vs Impulsive
Spontaneous investments aren’t always a bad thing. Impulsive ones are. If you quickly read about a company and see the value they’ve created fleshed out, there’s going to be an urge to invest in some instances. Don’t always ignore these urges. Sometimes, you’ll be getting in at the exact right time. Just don’t bet the farm on them.
Impulsive decisions are centered around what other people or trends have pushed you to think. You’ll see your friend invest several thousands of dollars into a company, and think you should do the same. Instead, be spontaneous, not impulsive. Do some research on your end and find what’s made the company valuable, what they’ve done in the past, and only then see where they’re expected to be headed. Chances are, you’ll feel much differently about the investment, and that added time will provide considerable more clarity.
