Things to Consider Before Investing Money

Posted by Grace under Investing, Personal Finance on December 6, 2014

Here are the important things to consider before investing money. Learn how to invest money for your future. Investing is not that hard especially if you are knowledgeable in computer and internet technology. All the things you want to know are available on the internet. The good thing is even investing tips are available. Some things you want to know about investing are available at The things you should consider before investing can be discuss in this page.

It is necessary to prepare these things before you start investing. There are investment types available, some investment vehicles are high risk and some are low risk. The investment should be suited to your risk appetite and to your financial situation. The important in investing is; you are meeting your financial goal slowly but surely.


Things to Know: Types of Investments

Investment types with high risk are stocks, mutual fund equities and businesses while low risk types of investments are bonds, cash, time deposits.

Just choose one or two, it depends where do you want to focus your investing. As I’ve said awhile ago, an investor shouldn’t need to invest in high risk as long as the chosen investment vehicle will help the investor to meet his financial goal.

Educate Yourself: Types of Investments

Ask the Certified Financial Planner

There are financial experts and certified financial planners who can advise you the same thing. To prepare or to fix these things before you invest money. Today, you have to find out first, your risk profile and the reasons why should you invest.  Making an investment goal should be done before investing.

Such goal can be for retirement, for your kids education, for business capital, for capital growth, or the investments can be use to build a house or to buy a car after few years. Investing can help you to make your money grow. Saving can only give you a low interest.

That’s why; it is advisable to invest your money in an investment vehicle that will give you an earning higher than a savings account, or higher than an inflation rate.

Related: Hire a Certified Financial Planner

Other Things to Consider Before Investing Money

Aside from assessing your risk profile and making your investment goal, consider also the following such as paying all your debts. If not all, at least lessen your debts. It is hard to invest money in paper assets if you have still liabilities that are paying for.

After paying all your debts, consider to have an emergency funds. Emergency funds should only be use during emergency cases. The ideal amount of emergency funds should be at least 6 months of your monthly income.

Things to Consider Before Investing Money

Image Credit: Tiffany Terry via Flickr CC 2.0

Emergency Funds and Insurance is Necessary!

You can build emergency funds slowly, just set aside every month for your emergency funds until you acquired the ideal amount of money. While building your emergency funds, it is advisable to get an insurance preferably life insurance and health insurance.

The face amount in your life insurance policy should be amounted to at least 3 to 5 times of your annual income. A health insurance should at least can cover your hospitalization bills just in case you met an accident or illness.

Don’t Get Scammed: Ask the Certified Financial Planner (CFP)

Ask for a certified financial planner to assist you and guide you along the way. Be careful not to get scammed. Make sure if you invest your money in an investment company or financial institutions, it is registered on security and exchange commissions. To not get lured to high gains or investment offers with promising returns.

Tips & Warnings In Investing

Before you invest your money you should ask a certified financial planner, asses your risk profile and let the CFP make a financial consultation with you. After you have assessed by a certified financial planner, start paying your debts (be a debt free), have an emergency funds and do not forget to have insurances such as life and health insurance.

It is important to have an investment goal, know your investment horizon, which means until when your money will keep invested, or what is the purpose why you are investing.

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There are many things to consider before investing money. Prepare them. Have them. Get them! Keep on learning financial education, like InvestmentTotal Facebook page or subscribe to its newsletter by email to receive investing tips easily. May you have a successful financial journey!

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