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RULES OF INVESTMENT



Investing is close to the hearts of many, with the understanding that it is a smart move that has earned a lot of money to many people. Probably, the scary part about investing is where people are afraid of losing all their money with some not willing to engage in all the work that is involved to make money.

But investment is not all about fear of risks and work. Even though there are valid concerns about risks and the amount of work that goes into investing, there are things you can do and steps you can follow to get started on a long term investment plan.

Let me take you through the steps of basic simple investing that can inspire a proper mindset that you need to succeed.

Draw your personal financial guideline.

For any investment, you need your plan clearly laid out, and with the following starter questions;

a) How much are you planning to invest?

b) What are you investing in?

c) Do you have sufficient information regarding the investment option.

While on this, you must weigh the time frame for the investment, the expected returns from the investment and the risks involved with the investment.

Build and maintain an emergency fund

 

As an investor, you need to put enough money to cover for emergencies such as sudden unemployment. Experts advise that you might need to have about six months of your income in savings. This liquid cash in savings is very important for emergencies.

 

 Diversify Your Investments

You remember that common saying “Never put all your eggs in one basket”? Well, if you are looking for a place to apply it, investment is the place to do exactly that.

Wisdom dictates that investment should be spread in various asset classes, for instance agriculture, bonds, stock, retail etc. To reduce investment risk. You can invest in Nairobi Stock Exchange and still invest in Dairy farming in Molo. Reason? When you rely on a single investment, when markets change due to inflation or pandemics such as COVID-19 you are left vulnerable when your investment falls prey to the changing markets.

Invest Gradually

You should consider making regular investments each time, and not investing at once all your monies. This gives you time to monitor trends in the market and performance of your investment and also to access varying interests.

Leave your Investment Alone

 

If you are looking for quick cash, then you might need to reconsider if you would really need to be investing.

Investment requires patience and self discipline. The thought of making quick money often leads to wrong decisions and poor investments. Let the investment mature before you reap fully from it.

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