It’s a dream most of us have
to someday own an investment portfolio that rivals Warren Buffet’s portfolio
or at least gets us on the Forbes list.
Ok, maybe you don’t have such huge dreams and all you want is a comfortable portfolio so you can take a vacation when you really need to.
or just flex and do the things you want to do because you want to do them
Whatever your dream is, a smart investment portfolio is the way to go.
and that’s why you need to get started.
This week, I’m breaking it down so it’s not so difficult for you to get started.
Here we go…
1. Start with your why
This might sound cliche but it’s a very important way to start.
Markets go up and down in cycles. sometimes they are profitable and sometimes, they are not. You might also invest in some bad deals.
The only thing that will keep you going, when you go through a bad patch, is your why.
If you get into investing for the wrong reasons or for no reason at all, you’ll be dropping off from the hike before you know it.
So, define your why. Do you want to retire at a certain age? Do you want to be financially free i.e. free of debt? Are you interested in building Africa’s contribution to global wealth?
Whatever your why is, it’s personal to you. It doesn’t matter if no one else believes in it. Stay committed and let it guide you in your decisions
2. Be honest about how much risk you can take
It’s always funny when anyone tells me they invested in a certain deal that promised 100% in returns and they almost lost their minds when they lost all the money they invested.
It’s a ‘high risk, high returns’ world people!
Investment opportunities that promise high returns are like a sugar rush, you enjoy the high points until the sugar level crashes ….boom!
and then realization sets in, It was really risky after all.
Be honest about your risk tolerance level. Can you handle the risk involved in a particular enticing investment opportunity? Do you understand how it makes you money? Can you really afford to lose that money? because it’s actually a question of ‘how much you are ready to lose’
If you can’t (and it’s not a crime), stick to your onions and keep playing it safe. You’ll still end up secure and comfortable if you stay committed to your long-term investment plans.
3. Don’t be random. Invest with a plan.
Being random doesn’t work with investing. It only works with gambling.
I admit that investing can get boring, especially if you don’t like routine.
I don’t like routine and I guess that’s why I tried to spice up my investment journey with investment clubs.
Whatever you decide to do to spice up your investment journey, don’t be random.
4. Go beyond paper assets
Paper assets are great, but you need to also invest in hard assets, to create a balanced investment portfolio,
Paper assets, which include treasury bills, bonds, equities (stock), are great options for your safety funds, however hard assets, such as real estate, have good intrinsic value and help you hedge inflation.
If you do not have the capacity to invest in hard assets right now, you don’t need to keep waiting till, you can collaborate with others to achieve this i.e. start or join an investment club
5. Keep growing
According to experts, there is nothing magical about investing; it is achieved through a culmination of small, disciplined, choices.
To borrow a line from the important book The Richest Man in Babylon, you must keep your mind on the bigger goal to “protect your true wants from your casual desires.”
Investing is a long term play, so try not to give up at half-time.
Keep investing, keep growing and enjoy the experience
It’s not about being perfect, It’s about making progress
Not easy to do but nothing is ever easy, right?
The only thing easy to do is nothing and I’m sure that’s not your game plan