As 2021 is soon coming to an an end, and you might feel intimidated by the initial investment options that comes with several mutual funds you’re aware of, I want you to spare some time and learn about the 5 things to consider before you begin investing in 2022.

If you have the capital and are ready to invest, this is a very bold step you are taking towards financial responsibility.

And you will soon become financially independent if you learn to invest a portion of your income.

But before you attempt o do so, let us look at those 5 things you must consider.

1. Know your financial status?

It is very wrong to embark on investing with money you get from loans, especially the ones that require weekly or monthly returns.

Also, if you don’t have enough savings on ground or are owing too much debts, never attempt to embark on investing.

The other thing you have to check is your level of expenses, and you have to balance that with how much you are earning at the moment.

And if you discover that your expenses outweighs your income, never attempt to invest.

Especially, a person who is self-employed, and have a family to cater for should try to determine his weekly or monthly income, before he embarks on investing.

Because investing often involves putting your money away for probably a long period of time until it generates more income, and the greatest mistake you will make is pulling out the money you have been investing too quick.

Therefore, if you want to invest in 2022, ensure you know your financial status very well.

2. How long will you need the money?

Next thing you have to do is to determine how long you are going to need the money that you are investing.

If you are planning on using it for paying your house rent in the next 2 years, or for your children’s school fees, then your choice of investment will be different from if you plan to use it after your retirement.

If you plan to use it in the next 5 years, you can choose a more conservative account like a money market account.

But if you are looking beyond investing for more than 5 years, you might then choose a more aggressive account like mutual funds or stocks.

3. How much do you understand your investment options?

Especially, if this is your first time of investing your money, you will make money in a good mutual funds, but this will involve you moving your money between several different stocks at the moment.

But before you can make money that way, you really need to solidly understand the stock market, spend a lot of time and posses real talent.

It might be a right choice to find someone who can do this individual trading for you, but make sure you proceed with caution because it is very easy to loose it l.

4. Hire a financial planner.

You need to hire a professional financial planner who understands what goals you are trying to achieve in investing.

The financial planner must be able to offer you several options on how to achieve your investing goals.

Each investment is associated with several risks, and you must be able to clearly understand then all before you attempt to invest.

Make sure your financial planner is able to explain investments better for you to understand; and if he can’t then find a new one.

5. Know the investment options that are available for you.

Mutual funds that has low investment options should be a great choice for you.

They are great because they makes it easier for first time investors.

In addition, some mutual funds will allow you to set up a monthly automatic draft which will help you avoid those high initial investments.

Whatever your choice might be, make sure you carefully consider thr operating costs and average annual returns over time of your investment.

Keep in mind that your funds will go through high and lows times, and you absolutely need to ride out those low times before you can be able to make money.

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Last modified: August 25, 2021

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