Golden rule: Never invest more than you can afford to lose.
Before you make the decision to invest your money in stocks, bonds, mutual funds etc there are certain things you should consider:
- Ensure that your debts are under control before considering investment
- Make sure your finances are protected
- Life insurance is an essential item you need to take out before thinking of investment, especially if you have a family.
- Make sure you’re contributing to your employee pension scheme or a private pension before investing any spare cash
- Before introducing risk to your money, you need some core savings as an emergency fund for those unseen events. The generally accepted rule is to have three months’ salary in savings before you invest.
- Plan your investments carefully, know and understand your financial goals and investment strategy