Investing is a powerful mechanism to help you fulfil your goals and meet your financial needs. It’s also a great way to put your money to work to shape the world. But before you leap into investing, you might want to ask yourself – am I ready?
A common adage says, “The best time to invest was 20 years ago. The next best time is today.” While there’s wisdom in these words, there’s also an implicit assumption that if you’re not investing, you’re missing out.
But are you?
Quotes like these often overlook one crucial factor – your personal readiness. Everyone has different life situations and scenarios, and it would be unwise to start investing without considering them.
Here are four indicators that could help you decide if you’re ready to start your investment journey.
1. You have thought about your priorities
Before you start investing, it’s essential to think about why you’re investing. What are your financial goals? Do you want to save for retirement, pay off debts, buy a house or fulfil a life-long ambition? There are as many different goals as there are people on the planet.
Knowing your priorities can help you make informed investment decisions that align with your goals. If you’re unsure about your priorities, take some time to reflect on what matters most to you and how investing can help you achieve those goals.
2. You conduct first-hand research
Investing can feel challenging, but thanks to the internet, many resources are available to help you learn about investing. Of course, this can be a double-edged sword.
It might be tempting to trust a few internet experts and invest in their recommendations, but their opinions could be biased, or not offer a complete picture of the investment opportunity.
Each investment option has its pros and cons, so if you’re actively looking into financial reports, investment prospectuses and organisation histories and forming your own conclusions, you’re on the right track.
3. You have an emergency fund and money to spare
To invest long-term means that the money is locked into your investments over a certain period. Often 5 years or more. So, it’s important to have some disposable income before you start investing. If every month is a battle to generate savings, you may not have enough money to invest.
Before you start investing, make sure you have a solid financial foundation in place, including an emergency fund and savings for short-term goals. Once those basics are covered, you can start putting money into investments that will help you achieve your long-term goals.
4. You are ready to commit
Investing is a long-term game. And like any venture that doesn’t offer immediate gratification, it requires patience and discipline. If you’re not ready to commit to long-term goals, investing may not be the right choice for you.
Investing requires you to stick to your plan and avoid making impulsive decisions based on short-term market fluctuations. If you’re willing to stay the course and stick to your long-term plan, investing can be a powerful tool to help you achieve your financial goals.
Ready? Set? Grow.
With the recent rise of sensational rags-to-riches investment stories, it might be hard to resist the fear of missing out. But remember, there is no one-size-fits-all answer to the question of when to start investing.
Investing is a marathon, not a sprint. Take your time, check your own level of preparedness and make informed decisions that align with your goals. And if you need help, don’t be afraid to ask.
