Investing is a great way to make the most of your money.
As an online entrepreneur, I invite you to get into investing early to secure your financial future and boost your chances of early retirement.
11 tips to help you make the most with your investment ventures:
#1. Learn Before You Get Started
First, if you want to succeed with your investments, you need to know what you are doing. The biggest mistake you can make as an entrepreneur is putting your money into an investment without understanding what’s really going on. You wouldn’t go skydiving if you didn’t know how to operate the parachute, so why would you invest without knowledge?
Finding information isn’t difficult in this era of the Internet. You have plenty of resources to help you out and even reading financial publications, such as The Wall Street Journal, can provide you with a bit more knowledge.
#2. Protect Your Assets
It is crucial that you protect your business, as well as your investments, from creditors. You need to structure your business and your investments properly to ensure that if something goes wrong, creditors won’t be able to access your assets.
Investing is a good way to guarantee your financial future is secure even if something goes wrong with your business adventure. Therefore, you need to make sure that creditors won’t be able to access your personal investments and savings in case things go awry. This ensures you sleep soundly at night!
3. Create a Sound Strategy for Your Business
Naturally, your business also needs to have an investment strategy. In an Inc.com article on steps to take to grow your business, the recommended strategy is all about the 80/20 rule. This means that 80% of your resources should go to core business opportunities and 20% to new adjacency opportunities.
In practice, this means that you focus most of your efforts to your customer base and invest in maintaining their loyalty. But you also want to keep the adjacent opportunities in mind. These are new investing ventures and growth strategies to explore and which can help your business look to the future.
4. Make It Impossible to Touch Your Investments
One of the biggest investment mistakes to make is all about changing and tweaking your investments too often. You should have some of your investments tied into funds and portfolios that are almost unreachable to prevent you from doing this. This ensures that you don’t make decisions too quick and in the heat of the moment.
The truth is that majority of investments fluctuate a lot. If you withdraw your investments every time they go down, you’ll end up loosing a lot more than if you just stick to your plan. Of course, you want some investments easily accessible, but majority of your money should be kept away from reach.
5. Reduce Risk by Diversifying
You don’t want to put your eggs in one basket, but spread them around a little. Even if you are investing into something with a relatively small risk, like property, you still don’t want it to be your only investment venture.
Try to find at least a few different ways to invest. This guarantees that if one venture goes sour, you don’t end up loosing all of your money. The Money Advice Service’s guide to diversifying is definitely worth a look.
6. Understand Your Pain Threshold
Although there are many options that provide you a relatively safe way to invest your money, there are ventures that might just see your investments disappear. You need to, not only understand the risk of losing your investment, but also understand how much you are able to lose.
Investing is more about controlling losses than it is about making a profit. You need to set yourself clear limits for losses that you don’t want to cross. Sometimes withdrawing from an investment with a small loss might be better than sticking it to the end only to lose more money.
7. Get on Top of the Tax Code
When it comes to investing, you want to make sure you don’t end up losing a chunk of your profits in taxes. Tax efficient investing is one of the first things you want to learn about before you start making money with your investments.
It is also important to understand the taxation, as you don’t want to end up doing anything illegal with your investments. You can find plenty of tips from websites like MoneyWise, to guarantee your investments are tax efficient.
8. Learn From the Legends
There are some big names in the investment world that you need to know about. Giants such as Warren Buffet and Jim Slater can teach you a thing or two about investing your money and making it big.
But learning from the legends doesn’t mean that same as copying other people’s advice mindlessly. Even the big names make mistakes and provide advice that might not bear fruit. Don’t expect to look at their portfolio and then get rich by just copying it.
You want to read their interviews and understand their investment methods, but ultimately you need to learn to make your own choices. You are the only one who can make it work in your own circumstances.
9. Remember To Save
Naturally, you shouldn’t just invest your money to different funds and assets. You also must start saving your money as well. Saving is a great way to guarantee your financial future is secure even if your projects and your investments don’t provide the hoped end-results.
Saving for your retirement is one of the most important things you need to do as an entrepreneur. So, you want to look around for different ways to save and invest to ensure you have a comfortable pension waiting for you once you are ready to retire.
10. Find Your Niche
Although you want to diversify your investments, you should still find a niche in investing where you excel. Perhaps you are interested in commodities or maybe you’d like to consider private equity investing.
Having an investment niche helps you in two ways. First, it allows you to direct your energy into gaining knowledge in that specific field. For example, if you are interested in private equity, you can check platforms like the one at Dealmarket to find news and tips regarding private equity investing. As already mentioned, this extra knowledge is essential to guarantee you make the right choices.
Second, finding your niche can help you stay passionate. If you focus on investing things that you are passionate about, you are more likely to yield bigger returns. You’ll have more energy to keep up to speed with your investments, when you don’t just care about the amount of money you make, but you are passionate about the results as well.
11. Be Patient
Finally, the unfortunate truth is that you most likely won’t be able to hit it big overnight. As an online entrepreneur, you know that it takes time and effort to succeed in business and this applies to investing as well. Some investment ventures may be able to provide you quicker returns, but in general investing can take a while to truly start producing you the returns you want.
Patience is one of the key characteristics for making it as an entrepreneur, as well as succeeding in investing. You don’t want to rush your investments. Just focus on what you want to achieve and work hard to achieve it.
If you enjoyed this, you’ll really dig the 10 traits all successful young entrepreneurs have in common.