How to Invest My Money

By — Published September 26, 2017

How to Invest My Money

Saving a portion of your income every month is not enough. You need to make investments to ensure that your seed money grows steadily and helps you build your wealth to cover for your future financial goals. The good news is that is you do not have to be an active trader in the share market to become a successful investor. All you need is a little research and planning before you take the big plunge and you will certainly reap substantial gains in the long run. To make things easier for you, we here have a list of useful guidelines that will help you invest your money in the right products and enjoy lucrative returns as well.

Goal Identification

The first and most important aspect of successful investing is identifying what exactly you wish to achieve from it. That being said, it is important to know whether you wish to make an investment for short-term gains or long-term returns. For instance, if retirement planning is your ultimate financial goal, you might want to explore more long-term investments such as the 401(k) or the traditional individual retirement account of the IRA. On the other hand, if you need money for a short-term goal such as financing your next vacation to Miami, or buying a new car or a house, a high-yield savings account would be your best bet.

Asset Allocation

Another important thing that you must keep in mind while making an investment is ensuring diversification in your portfolio of investments. In other words, you must allocate your investment amount to various asset classes to balance out the risk factor and ensure greater returns in a short period of time. For instance, if you wish to invest for a longer tenure, it would be a smart decision to allocate more funds in stocks as compared to bonds.

Risk Tolerance

Before you make your investment commitments, you must first analyze your risk tolerance. Remember, it is not a wise decision to tie up your hard earned money on an aggressive investment plan and commit to greater risk than you can afford to deal with. If you are a naturally conservative individual with little appetite for risks in your everyday life, you might want to stay away from high risk high-yield options such as equities. On the other hand, however, if aggression is your thing, you can easily achieve greater returns on high-yield investment products that carry a greater risk of failure.


The importance of research in investment cannot be emphasized enough. There are countless different investment products in the market nowadays that are designed to suit the varying needs of regular investors. Depending on your risk appetite, financial goals, and tenure for which you are willing to lock up your money, you can handpick specific investment products that will not only align with your individual needs and requirements but also ensure that you get a lucrative deal for your money. For this, you must take your time and explore the various options available to you on the internet. A little research will go a long way in ensuring that you do not get your hard earned money tied up in a product that does not live up to your expectations in the long run.

Processing costs

While signing up for an investment product you must also factor in the additional costs such as your processing charges and the like that might eventually add up to a substantial amount. Although the 1% fee might seem like a trivial amount right now, it is likely to multiply over several years of investing and easily cost you thousands of dollars across a lifetime.


While it might be tempting to invest your money in a stock that has been steadily gaining momentum over the last few months, doing so is akin to gambling that is merely based on chance. Instead, you must follow a specific strategy for monitoring a particular stock and devising theories as to why exactly it seems to have a promising future. There should a suitable reasoning and rationale behind every investment decision you make and every stock or asset you buy or sell.

Be prepared for the storms

It is important to understand that all kinds of high-risk investments including stocks and equities are susceptible to major fluctuations caused by the volatility of the market. That being said, you must be well prepared to absorb the shock of a plummet, both mentally as well as financially. Instead of panicking and beginning to sell your stocks left and right, you must focus on the fundamentals of what exactly is happening at the root level. It is important to have confidence in your research and stay in control of your emotions while dealing with a volatile investment market.

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