This is intended to provide insights for people who wants money to work for them but don't know how or where to begin. Beginning thru the very basics.
This is not a
financial advice and only intended to give insights based on my experiences.
In today's situation,
where everything is temporary and the world is entering an economic downturn,
you should be able to protect yourself from the various setbacks you will face
in the coming seconds, days, weeks, or months. You will never be able to
predict where you will earn money or how long it will take.
But before anything else, have you assessed yourself on how much can you live through a day, week, or month? If you haven't, try listing all your expenses within a day, from commuting which is a transportation cost, to the food you eat on every work break, as well as the candy you bought while walking to the jeep terminal. With that, you will identify yourself as what kind of spender you are: an all-in spender or just a tolerable one.
Why did I mention listing your expenses for a day? This will help you set a goal for the specific amount you should have as an emergency fund amounting for 3-month total expenditures.
Building your emergency fund is essential because this is a factor that will determine what type of risk appetite you have. A conservative, a moderate, or an aggressive one.
The risk appetite types abovementioned are often identified to each investor to determine how can they tolerate market fluctuations when it comes to gains and losses.
Risk Appetite / Investor Types:
- Conservative Risk Appetite / Investor
When it comes to the market, this sort of investor can only take a small loss, and they are extremely sensitive to market conditions. They're the ones who stress out when the market takes turn for the worst scenario.
- Moderate Risk Appetite / Investor
This type of investors had gathered information thoroughly thru reading, so they did take risks moderately and generated a good amount of profit.
- Aggressive Risk Appetite / Investor
This type is known for taking such risks to generate a high amount of profit, and I call this type a "sacrifice for the prize". You must stake a large amount of money for high profits as well as hold your emotions tightly. Market conditions shouldn't define you, mantra.
What type of investor are you?
Once you've identified what type of risk appetite you possess, you can now choose what kind of investment suits you that you should acquire. Follow the Money Works thread and be knowledgeable about being financially literate.
