The world of investing has changed a lot in the last couple of decades. For one, the internet has become the normal place for all of us to conduct business in every aspect of our lives. When we consider how to invest our money this can be a fantastic opportunity, but also a source of confusion. When faced with almost unlimited choice by investing in online ventures, we can struggle to know what’s the best course of action.
Some things are just the same as if we were dealing with traditional financial decisions, but others are completely different. How do we go about investing online? What should we dig into and understand? Hopefully the below can help you sort through the proper information.
Sort Out Your Budget
There are many reasons we may be investing in online schemes.
- It could be retirement planning,
- trying to create wealth, or
- just having a play with some of our savings or surplus cash.
It’s important to consider your budget and know how much you have to spend. Never overstretch and use funds that are necessary for living your day to day life.
Related: How to Budget For Irregular Income
Consider a Risk Assessment
We would teach our children to be careful and manage money as best we can. So, it’s essential that we follow that advice ourselves and look at the risk involved in any investments we are looking to take.
When investing in online ventures, there are common-sense approaches and warning signs that may seem too good to be true. A good rule of thumb is to initially back off if it feels wrong.
There is a more scientific approach as well:
- don’t dive into anything,
- research the firm offering the investment, and
- check reviews etc.
If anyone is offering a time-limited sign up policy, beware of this as being pressured can make you miss warning signs.
Related: 20 Risks to Take Before You Turn 40
Think About How the Payment is Taken
Online financial security is always something to be careful of. You will have conducted your risk assessment, but still be wary of offering card details to organizations you are unfamiliar with.
There are so many ways of making secure transactions online these days, from Paypal to Bitcoin. Even these less conventional methods will work and are often secure. Heck, it’s possible to buy bitcoin in Germany and then take out an investment in Indonesia minutes later without ever letting them know your bank or card details.
Only Take Quality Advice
Every investment carries risk. If you are investing significant sums then it’s important to know if you are evaluating the potential of an investment effectively. Avoid taking tips and advice from unqualified bloggers and journalists. There are plenty of high quality, qualified, financial advisors that can help you decipher if something is likely to be good for you or not.
Don’t Chase Losses
Investing should not seem like gambling, however there are some parallels that can be drawn. If you are seeing an investment fall then you should make a decision based on whether it s a temporary blip or if it’s more serious and you should consider cutting your losses.
When you first invested you should have had an idea if it was a risky investment or not, but this is no guarantee. So, you should regularly check and monitor how all of your financial portfolio is performing to avoid disaster.
Are you looking to start investing in online ventures? Be cautious and be sure to listen to your gut!
My name is Derek, and I have my Bachelors Degree in Finance from Grand Valley State University. After graduation, I was not able to find a job that fully utilized my degree, but I still had a passion for Finance! So, I decided to focus my passion in the stock market. I studied Cash Flows, Balance Sheets, and Income Statements, put some money into the market and saw a good return on my investment. As satisfying as this was, I still felt that something was missing. I have a passion for Finance, but I also have a passion for people. If you have a willingness to learn, I will continue to teach.