People invest, so that they can engage their money in a process of generating more money, and hence getting a profit out of it. So, if you are planning to invest anytime soon, you must consider the following factors:
1. Best use for your money
The most important factor that one should look into before investing is making sure that this is the best use of their money. The investor must see that he/she saves himself from any kind of financial catastrophes, that might result in wiping off their investments, or may also put them under a debt in a worse scenario. Hence one can probably get their money insured before investing.
2. The objective for investing
Different people have different objectives for investing their money. Someone may want to invest with a purpose of gaining more and more money in a short span of time, even if it means a high degree of risk for them. Others may invest for gaining a smaller amount of return, but their main goal might be retaining their funds safely, even if it means investing it for a longer time period.
3. Duration of investment
Another factor that an investor must consider before investing is the time period after which you would want to convert your investment into cash. If you invest for a longer time, you might get a higher rate of return, and you may as well invest for a more risky project. However if one invests for a shorter time span, he/she might not get that high a rate of return.
4. Risk Lover/ Risk Averter
An investor might be either a risk lover or a risk averter. Risk lover means that the person is ready to take risk to gain a high amount of profit. However a risk averter means that the investor doesn’t prefer to take risks, and he is satisfied with a smaller amount of profit.
5. Creating and maintaining an emergency fund
Some smart investors tend to put enough money in an investment so as to cover an emergency like sudden unemployment, unforeseen need of a particular amount of money. This is a good practice for the investors so that they do not go bankrupt when they need the money the most.
14 Comments. Leave new
nice..
Gud one;)
Good job!!
Informative !! Well framed 🙂
Good article
Well written!
You missed out on a few other factors like liquidity, peace of mind and tax implications but it’s a good one.
Well compiled.
Nice article, but could have presented well
nice article !!
precautionary article for fresh investors.good job!
Are you sure it is not plagiarised?? It seem suspicious to me.
Informative and good information..!
Very informative