Tuesday, 18th November 2008

The practical way to riches, part 4

Written by George Traganidas Topics: Habits, Personal Finance

The last posts have covered the basic steps of the practical way to riches. In order to become rich, you must put aside money every month to invest in projects. In addition, you need to save money every month to cover any emergencies that might happen along the way. The last thing we covered was the need to control your expenses, so you can enjoy life and build your wealth.

Now it is time to get into more depth about the creation of wealth. We have built a good basis by spending less than we earn and saving money for troubled times. We started to build a sum of money to invest to expand our wealth. Now it is time to invest this sum of money and make it work for us. Make the money produce more money without us having to be involved. This is the secret.

Habit 4 – Seek Proper Advice

In order to properly invest your money and make it grow you need to receive advice. This advice can come from many sources and in many forms. There is one thing that we need to be extra careful about. We must know the person who is giving us this advice. For example, if we want to invest money in stocks who is going to advise us? Our friend down the bar or a professional who is risking his own money in the market and is successful? I hope that you have answered the second person.

We must seek qualified advice. The person that we seek advice from must be also invested in the same business and they must have demonstrated knowledge and success. You want advice on real estate, go to someone who invests in property and is successful. You want advice on stocks, find someone who is already successful in it. Do not listen to people who sit on the side lines and just give advice. They do not have any of their money at stake and they are not committed.

I am sure that sometimes you will listen to advice from people who you think are experts but in reality they are not. This will cause you to lose money. That is ok. It is part of the learning process. As you start to gain experience, you will become more able to see through these kinds of people. As a safety measure, when you start to invest, start with little money. Then in the event that you lose your money, you will not get angry and you can write it down as a learning expense. If you have followed the advice so far, you will not worry anyway, because the money you invested is not from your savings or living money. It is money that you put aside for the specific purpose of investments.

I will not recommend what kind of investments are the best. There are so many different kinds of investing that I can not cover everything here. What you will choose to invest your money in depends on you. It depends on your appetite for risk and your comfort levels. I know people who only invest in real estate because they like it and they understand it. Others just invest in the stock market. Pick what you enjoy most and then seek advice on how to invest your money from qualified and successful people. Learn from them and do not reinvent the wheel.

Next week I will tell you the fifth habit.

Follow the practical way,
George

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