Saturday, July 18, 2009

Investing is hard

Because it is not human nature.

Buy low, sell high is easier said than done. Gambling and taking calculated risks is separated by just a thin line.

Before investing, the first step is to understand your current financial status.
  • Emergency cash of about 3 to 6 months of your monthly expenses
  • Pay up debts with high interests. Eg, credit card, education, housing, car loans unless you can guarantee returns higher than the interests(leveraging)
  • Understand your financial goal and risk tolerance, although it may change as time passes

There are various investments
  • Self investment, eg your appearances, knowledge, etc.
  • Personal venture
  • Stocks, Warrants, Options
  • Bonds, Treasury Bills
  • Property
  • Currency
  • Others, eg friendship, family, relationship

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