THREAD๐งต
10 Investing Rules That You Should Master Today.๐๐
1/ Before Investing, Comes Saving.
Saving is for the poor, Investing is for the rich.
With small amounts of money, you should focus more on saving more money or growing their income first.
10 Investing Rules That You Should Master Today.๐๐
1/ Before Investing, Comes Saving.
Saving is for the poor, Investing is for the rich.
With small amounts of money, you should focus more on saving more money or growing their income first.
You should worry less about your investment returns in the short term as they do not matter that much.
If your Total Assets x Expected Annual Return < Expected savings.
Your investments will be earning you less than your savings.
Hence you should focus more on savings.
If your Total Assets x Expected Annual Return < Expected savings.
Your investments will be earning you less than your savings.
Hence you should focus more on savings.
2/ Create an Emergency Fund.
Before investing, create an emergency fund that will act as your source of refuge during hard financial times
It will help you avoid having to sell your long term assets
The biggest returns from investing come from holding assets for a long period
Before investing, create an emergency fund that will act as your source of refuge during hard financial times
It will help you avoid having to sell your long term assets
The biggest returns from investing come from holding assets for a long period
3/ Build a Liquid Portfolio.
No matter how valuable an investment may be, it is of no practical value to you unless its liquid when you need to cash out.
Just as travelers die in the wilderness without water, investors perish if they have no liquidity.
No matter how valuable an investment may be, it is of no practical value to you unless its liquid when you need to cash out.
Just as travelers die in the wilderness without water, investors perish if they have no liquidity.
4/ Do not Invest in things you do not understand.
Do not be bought into an investment by the possibility of high returns only.
Be sold into an investment because you have studied it well, you understand the risks involved, and you know your chances.
Do not be bought into an investment by the possibility of high returns only.
Be sold into an investment because you have studied it well, you understand the risks involved, and you know your chances.
5/ Do not take more risk than you can bear.
Do not risk money that you cannot afford to lose.
Spread your risk by diversifying your investments.
The easiest way to lose your money is not by reckless spending but by making wrong investment decisions.
Do not risk money that you cannot afford to lose.
Spread your risk by diversifying your investments.
The easiest way to lose your money is not by reckless spending but by making wrong investment decisions.
6/ Diversification.
Diversification isn't how you build wealth, it's how you preserve wealth.
When you are trying to build wealth, you need to build a concentrated portfolio of your best bets.
Spread your wings narrowly and widen your horizon as you grow your wealth.
Diversification isn't how you build wealth, it's how you preserve wealth.
When you are trying to build wealth, you need to build a concentrated portfolio of your best bets.
Spread your wings narrowly and widen your horizon as you grow your wealth.
7/ Understand risk/yield relationship.
There's nothing like a low risk investment with high yield.
Whenever someone promises you a high yield from a low-risk investment, take your money and run away.
There's nothing like a low risk investment with high yield.
Whenever someone promises you a high yield from a low-risk investment, take your money and run away.
8/ An Investor's biggest Enemy is Himself.
As an investor, the biggest monster is the one between your ears.
You will have to overcome your logical fallacies and biases to be a successful investor.
Investing is 20% head knowledge and 80% behavior.
As an investor, the biggest monster is the one between your ears.
You will have to overcome your logical fallacies and biases to be a successful investor.
Investing is 20% head knowledge and 80% behavior.
9/ Investing costs are not your friend.
Investors worry too much about inflation rates and worry too little about investment costs.
Where returns are concerned, time is your friend. But where costs are concerned, time is your enemy.
Investors worry too much about inflation rates and worry too little about investment costs.
Where returns are concerned, time is your friend. But where costs are concerned, time is your enemy.
10. What returns can you sustain?
If you understand the math behind compounding, you will realize that the most important question isn't,
"How can I earn the highest returns?"
Its, "What are the best returns I can sustain for the longest period?"
Investing is a marathon.
If you understand the math behind compounding, you will realize that the most important question isn't,
"How can I earn the highest returns?"
Its, "What are the best returns I can sustain for the longest period?"
Investing is a marathon.
Experience is the best teacher.
Some lessons cannot be taught. They can only be experienced.
The best way to learn is by doing.
Get in the investing arena, put some skin in the game, fail and learn.
Happy Investing!
Some lessons cannot be taught. They can only be experienced.
The best way to learn is by doing.
Get in the investing arena, put some skin in the game, fail and learn.
Happy Investing!
If you enjoyed this thread:
1. Follow me @kahome_steve for more amazing threads.
2. Retweet the first tweet in this thread so that other people may see it.
3. Check out my other threads below.
1. Follow me @kahome_steve for more amazing threads.
2. Retweet the first tweet in this thread so that other people may see it.
3. Check out my other threads below.
P.S
I published an e-book just for you.
It covers personal finance management and investing fundamentals.
If you loved this thread, you will definitely love it.
Get it in the link below. DM me if you can't access it.
I published an e-book just for you.
It covers personal finance management and investing fundamentals.
If you loved this thread, you will definitely love it.
Get it in the link below. DM me if you can't access it.
Here's the link. If you can't access it via this link, DM me.
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TL;DR
1. Before investing, comes saving.
2. Create an emergency fund.
3. Prioritize liquidity.
4. Diversify as your wealth increases.
5. Avoid investment costs
6. An investor's biggest enemy is himself.
7. Do not take more risk than you can bear.
1. Before investing, comes saving.
2. Create an emergency fund.
3. Prioritize liquidity.
4. Diversify as your wealth increases.
5. Avoid investment costs
6. An investor's biggest enemy is himself.
7. Do not take more risk than you can bear.
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