How to Improve Your Net Worth Through Investing

Investing is the best way to improve your net worth, there is no doubt about this. You can multiply your net worth only by investing. But in order to invest, you need liquid assets. If you don't have liquid assets you cannot invest. It is not a very good idea to sell your fixed asset for investment purposes.

Investing Vs Saving: Which is More Important?

Saving alone cannot make you rich, you will have to start investing and continue to invest as long as you can manage your finances. Let's say, you save $100 every month, in one year you will be able to save $1200. However, you will have more money if you invest your savings in the share market.

Interestingly, before you can start investing, you need money. One of the interesting ways to build money for investing is by saving. When I had a job, I was earning really well, I was not only investing in the share market but also was able to save a good amount every month.

When I started my career, I bulldozed my wants and necessities in order to save as much as I can. Just in two years' time, I was able to buy 1000 shares for $1. Now, the shares are valued at $3 each. In my old age, this will help me.

Robert G. Allen once said, “How many millionaires do you know who have become wealthy by investing in savings accounts? I rest my case.”

This statement from Robert G. Allen tries to explain that you need to invest money to become rich and you need to invest in the right program. Saving alone cannot make you wealthy.

Investment Opportunities

If you want to invest but do not know how to get started, here are a couple of investment ideas

If you are investing in the share markets, if you invest in primary shares, you have the chance of making profits. If you are buying shares from the secondary market, you will have to see the company profile before you are investing in the shares. You will not only have to check the price of shares but also the company business. I am not in favor of investing in so-called investment programs as these are scam offers, but you can try investing through legit platforms like stash, etoro, Robinhood, acorn, etc. You can do micro-investment on these platforms. You can also invest in cryptocurrency. It is risky but it is also a profitable investment. You can also build your own online business by investing online.

Education is a big business. There are a lot of people in my home country who became billionaires by investing in school business. However, in order to benefit from school business, you need to be patient because it might take years even to reach the breakeven point, let alone making profits.

If you want to invest in a share market or real estate, you need a lot of money. However, when you are investing in insurance, you do not need a lot of money, the premium is a very small amount compared to what you will be receiving after the end of the maturity period.

Investment Risks: High-Risk Investment Vs. Low-Risk Investment

Investment is risky. If the company or the business you have invested in fails, you will lose your money and the poor class and middle class cannot afford to lose their investment because when they lose their investment, they will be suffering badly. This is the reason why the poor and middle class do not invest.

What is the difference between high-risk investment and low-risk investment? I invested $100 on X and $1000 on Y. Do you think X is a low-risk investment and Y is a high-risk investment? What are the criteria that define high-risk investment and low-risk investment? I think the answer depends on how a person views investment.

Diversifying your investment

Diversifying your investment is one of the best methods to minimize the risk associated with the investment. You can invest smaller amounts in two different companies instead of one big investment in one big company. You can also invest in two different fields to minimize the risk, for example instead of investing all your money in the share market, you can also invest in real estate.

Reasons Why You Need to Invest

Well, financial independence might be good but more than financial freedom I want financial security. For me, financial security means the ability to manage my expenses, the ability to save money, and the ability to invest in retirement funds. Financial security means your net income is just enough for you to live comfortably.

First published on Trendri, in author's name