Becoming a Smart Investor
May 15, 2013
While investing can be overwhelming and even intimidating at times, don’t let that prevent you from being prepared for your future. The solution? Here are three basic ideas that will give you the confidence to become a smart investor: Balance, knowledge and trust.
Let's talk about balance first. While saving for RESPs, RRSPs and Tax Free Savings Accounts is important, financial balance should be your priority. Mortgage payments, home ownership expenses, insurance and credit cards are the big costs, and a budget, along with a spending plan, will help reduce the stretched feeling and stress that comes with it. Sure, it’s easier said than done, but if you can manage debt and expenses well, you’re on your way to actually having money to invest.
The second step is to inform yourself. You can find countless ways to learn about investing. Start by attending seminars held by financial institutions, reading books and magazines on the topic, trying calculators and tools on the Internet, and soon you'll have the basics in no time. You'll learn how different investments work, what risk tolerance means and basic strategies like dollar-cost-averaging and diversification. You'll learn how different investments earn you money - you'll also learn how advisors get paid through salary and maybe through different fee and commission structures. It's all critical to making the right decisions. Only invest in what you understand and only invest with someone you understand as well.
Because you can’t know it all, the third step is finding an advisor or Coach you can trust. This is a good idea for all your financial planning, not just investing. Working with someone you trust, who knows you and understands your needs, will lead to a balanced and holistic approach - the best way ahead. A good advisor will know more about you than just which investments and appointment times you prefer - they should know your lifestyle, habits and long term goals so they can tailor their advice to you. More importantly, you should hear from them more often than just at RRSP time.
Balance, knowledge, trust – three ideas every investor needs to follow to be successful. Take the time to get a hold on all three, start sooner than later, and you’ll be ahead of the game.
To contact a Libro Coach about your investments call Libro at 1-800-361-8222 or visit our Coaches page to find a Coach near you.
Do you have any tips to help find financial balance? Share your ideas below.
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