Tuesday, November 20, 2012

How To Get Rich - The Absolute Second Step

If you have been a regular reader of this blog, you will already know what the very first step to building wealth is.

For those of you who are new, I suggest reading my previous posting entitled " How to Get Rich - The Very First Step" before you continue reading here. No sense repeating what I have already written.

Make the First Step a Habit

Once you make the first step a habit, you will see a growing amount of money accumulating in your savings account. It is always nice to see this amount continually growing and adding to your overall wealth.

The fact is, if you were to just do this one step you will probably be better off than the average person that has trouble with this discipline.  However, I think you owe it to yourself to do even better. You owe it to yourself to reward yourself by making your money work for you.

Chances are you are already used to working hard for your money. Would it not make sense then to make the money you save work just as hard for you ? Of course it would !

Put It To Work  

The absolute second step to building wealth is to put your savings to work. This basically means that instead of leaving your savings in a bank savings account forever you must find opportunities that will give you an income from your savings. In other words, invest your savings to get an income in return.

There are many types of investments, but unfortunately many are not so good or even downright bad. The trick in the investment world is to not lose money. Picking bad investments is not the way to ensure a wealthy future.

It is not my intention to give you specific investment picks, but to educate you on what types of investments you are personally comfortable with. There are plenty of sources out there that will give you specific picks when the time comes.

Where To Start 

For the new investor I recommend taking it slow and learning as much as you can about the different forms of investment. There is nothing wrong with leaving the bulk of your savings in low risk investments such as term deposits or money market funds until you feel comfortable. Remember the number one rule of investing "Do Not Lose Money"

Be careful not to fall for the promise of a big return. Generally there is no such thing without taking a big risk with your savings. Risk and Reward always go hand in hand.

As your savings and your education grow, you will eventually feel more comfortable with taking a little more risk in order to earn a little more income from your investments. I encourage you not to jump ahead too quickly until you fully understand the consequences of your decisions.

I will be writing more about investing in the future, so stay tuned or better yet, subscribe to my blog today.

As always, I welcome your comments and suggestions for future topics.


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