Determine the Amount of Money You Can Invest

Novice investors have the impression that the more money they invest, the more they would earn. This would incite some to invest all their savings, and in some ways they could prove to be right. Such acts, however, could also become their undoing. With luck, a novice investor may end up with double their investment, or they could end up broke.

To determine how much to invest, you must first determine how much you can afford to lose. It should also be in tune with your financial goals and risk tolerance.

Your living expenses should also be put into consideration, like looking for a job after quitting, and savings that can last you for six months or more to allow for mobility during that time period. Investing with your living expenses is unrealistic and may have fatal consequences. If possible, divide your savings into two. Your living expenses for at least six months in one part, and the money you plan to invest for the other part. Having a job or inheritance can provide for more.

You should also get a competent financial planner to help you plan your budget and make sure that you do not invest more than you should or less than you have to. And it is strongly noted that if you cannot afford it, you should never borrow money to invest in. The stock market has high potential but even higher

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