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8 advices to win on your investment

What do you need to do to win your investment?

Investing, and with it money management, is not gambling. It has its own rules. Follow these to win your investment.

8 advices to win on your investment

The school does not teach how anyone wins in finance. So it’s pretty hard to implement. There isn’t much talk about investing, and financial culture isn’t taught in many places either.
At the time, the high school wasn’t taught us too much about it either. Although there was an internal rate of return, they asked me which bond I would buy, how much resources and when the planned project was needed, so there was a lot, a lot. On the other hand, there was less talk about the money market, the financial career and the achievement of goals through the financial market. In other schools, this lifelike field may have been an even less frequent topic.
This article was created to make up for this in a nutshell.

1. Understand what you are investing in if you want to win.

If you don’t understand what the heck you’re putting your money into, you’re never going to feel really safe. If you don’t feel safe, it’s natural that you’ll panic about a lot of things. And panic is always a bad advisor.

If you understand, you can control it somewhat. You will know what are the events when you need to move, you need to sell your investment and what are the best times to sit still. You will know when which of your moves you lose and which one wins.

Financial security is a state of mind. A kind of financial confidence. And that confidence can only come from you understanding what your money is doing. You understand what the economy is doing at a given time and that you know how you can get over it.
You don’t have to fully understand it, it will come from practice. Just like you probably aren’t a car mechanic, but you still drive a car. You pretty much know how it works, and if something isn’t the way you want it, you hire a professional. The same is true with money. It’s not specifically a good feeling to blindly put your money anywhere and trust it in sheer luck. However, it is reassuring if you are at least aware of the basics, you can entrust the rest to a professional.

Know what tools you can use to achieve your financial goals. Know what these characteristics are. You can read about these tools among investments.
If this affects you right now, feel free to comment or here’s your chance to get in touch
If you know all this, it will be easier to put your vote next to one or the other.

In the worst case, you get out with less money than you put in. And at best, you’ll end up with a lot more money than you’ve ever been able to save because they’re doing the hard work for you.

2. Don’t invest based on your emotions

Just to be clear: the capital market generates wealth. Lots and lots of money. The main reason people burn themselves with it is because they listen to their emotions and invest instead of logic.
What I mean: when the market goes up like here at the arrow, the average person will be excited about their prospects of how much money they can make on it. But they are still unsure when to get in. They waits until everything shows what good returns the device has shown.

Small investor's tragedy

So they get in at X.
The only problem with this is that the train was missed. Because they don’t fully understand how what they bought works, they get scared in a fall and even sell at a significant loss.

They buy out of greed, they sell out of fear. Typically, small investors buy this way, big ones think differently. By the time the market reaches X, they are typically thinking about getting out to realize a profit. Then in the event of a significant fall, when the small investor is scared and sells below price, they buy. This is how the circle starts from the beginning. So if you’re playing to win, act like a big investor. Even if you don’t have an investment of over a billion yet.

High-growth markets also have high volatility (much more “swinging”). So if you log into your account and see its value fell 10%, 20% (or more in a crisis), it’s natural to be scared. But you have to stay on the pre-designated course.

While being right in the middle of a crisis can be daunting, a crisis also has its benefits. Specifically, it can bring you even more money if you use it well.

What can you do to win?

Since it feels completely different to have your money working in a stock market than to rest in a bank deposit, it is useful if you don’t decide by things you already know. Short-term fluctuations in the stock market can also take place. It feels different, you have to get used to it.
One of the main mistakes made by beginners is that they enter unfamiliar terrain without anyone holding their hands.
Those who have millions in the stock market are also more likely to see the rise. However, they have already learned to handle the situation and know exactly that the market is going up in the long run. So know that if not in the short term, but in the long run, the patient and disciplined will win.

If you are still very scared, I suggest you wait 24 hours before doing anything with your investment. This will make you think about your decision before you act. This way, you will do less that you may regret later.

Find a portfolio with which you can achieve the best results over a pre-determined period of time. Stay with the original plan and don’t bounce in and out when the market is going through hard times. If this is difficult for you on your own or you would like advice, contact us.

3. Have a cash emergency reserve

I have already written about the importance of the emergency reserve, you can read more on the blog.

It is much easier to make rational decisions about your money if you have cash reserves. A reserve from which you cover your daily livelihood and which allows you to monitor the balance of your investment account from a little further away.
If something tragedy happens (you lose your job, you get sick, etc.), you don’t even have to get out of capital formation, possibly at a loss just to keep your house.

4. Keep in mind the building of spare money.

Keep in mind that the safety reserve should always be a priority (even at the age of 30 and even for retirement purposes, even if other financial goals seem attractive.
Why? Because if you may not be able to work (at the latest in your old age), you are already sure that you will need the capital from which you will make a living. There and then everything else (business development, the way around the Earth, etc.) will be pushed into the background. It provides a sense of mental security, unleashing your potential inhibition. This way, you can feel free to grow your business knowing that you have nothing serious to lose.
This is not a point 3 reserve, you make a living from it not for half a year. This reserve is for you to live on for years. Survive even a crisis from a company, everything.
Believe me, it can come in very handy to have one like this behind you. If you request a callback, we’ll help you get started.

And think about it even if you are doing well now. Now, I’m deliberately giving an old example before you think I’m pointing with a finger.
Roughly in the early 2000s, the subject was a friend of a senior executive at the time. He didn’t become a customer unfortunately, saying he didn’t need a reserve, so even hundreds of thousands go to his party every month because the store is going well.
Then the dice turned, and as a result of a market change, the person slid further and lower. Our colleague asked if there would have been 100.000 per month at the beginning of the millennium. Of course it would have been. He then asked if he would only get that monthly 100.000 that he almost begged 5-10 years ago to put aside what that would that mean. “It would save my life.”

5. Prioritize your goals

If you dilute your strength by putting money into a small million goals at once, you will never achieve either. Prioritize between goals and put the most money into the first or the first two. Obviously, here you can separate corporate and private goals.
If you have the opportunity to save 100.000 forints per month, you can put all 100 in the first, or 50-50 in the first two. But if you have, say, 10 goals, you get 10.000 forints per goal, so you will practically need a lot of time to meet any of them.
It’s much more motivating to see a significant increase in one of your goals than to see a really tiny increase in many, many goals.

Because if everything is important, then nothing is important.

6. To win your investment, involve an expert as well

There are those who say to involve your friends as well so that you can achieve your goals by supporting each other. This is fine as long as e.g. the goal is to complete a school and you are prepared for an exam. Here, however, if none of you are proficient in these fields, the blind would lead thoose who are unable to see.
Naturally, you need to know everything about your own work, it is time consuming to build and keep this knowledge up to date. So tell me, how would you have time to a completely different area? Yes, I know someone who succeeded. He, on the other hand, had an affinity for finance until then (and I’m not claiming all his decisions were good, but he learned it on his own skin and paid his tuition properly according to his own admission.)
Having someone in the background that you can turn to if you have a question will increase your sense of security and make it easier to see through the area.

7. Make everything automatic

To achieve a long-term goal, the best point of entry is now. You don’t have to wait for the falls, the best starting point is right now. If you don’t want to win in day trading, the best strategy is to invest in any period (year, semester, quarter, month) without looking at the exchange rate.
This practically takes advantage of the cost average effect.
Obviously, you can do this more calmly with the right portfolio composition and periodic review (see point 1). Here, I am trying to highlight that, in the long run, discipline is more rewarding than newspapers reporting on falls.

In addition, it is a good idea for your bank to initiate the transfer automatically. Your money will then be transferred to the segregated account so that you do not forget or spend it on impulse purchases.

8. Jump into it now, the waiting is not winning

Don’t wait for the investment
The more you expect, the more profits you will miss out on. Time is money. Literally.
As time goes on, there is less and less time left for your money to take advantage of the compound interest opportunities.
Now, everything may seem more important. It’s easy to fell over to the side of the horse where you don’t yet feel like you’re spending more than you’re not going to miss, but you’ve already done.

If you put aside 1 million a year and only reach a lean average of 5% on average (compared to 6-10% on the market average), that’s what your investment will look like in 15 years.

Investment growing with continous savings If you’re 1 year late, you’re not going to miss that little bunny-tailed thing from the beginning, but the 15th year will be missed. Because then the money is only working for 14 years.
The more you wait, the more will fall out of the end.

Questions:

  1. What savings tools do you know and use outside of the pillowcase?
  2. During what period of time do you use them?
  3. In your opinion, what are the advantages and disadvantages of the tools you use?

If you would like to win either your existing or future investments or just have a question here you can contact us.

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