Manage Your Finances - Short Term and Long Term Investment
Whether you do a job or business, the way you make your finances can change your financial situation. You have money, so you can use it the way you like. Do you invest everything in long term?
You need to think long-term to make different decisions. It does not mean you will invest everything for the long term. When you need money in a short period of time, you may find it difficult to manage that. You have to survive and keep moving forward.
Having a liquidity crisis can be a worse thing in business. And many companies go out of business because of liquidity crises. So to meet the demand and avoid a liquidity crisis, will you invest everything in the short term?
That will not be a good idea. You will earn less when you make investments in the short term. You can generate a higher return from long-term investment. Investing everything in short term makes you lose potential gain. As a result, you may not see a significant change in your financial situation.
So what should you do to get the best out of it? Having a balance between the short-term and long-term is the key. You have to analyze your financial condition and decide how much you will invest in the long term and how much you will invest in the short term.
You maximize your returns from long-term investments and at the same time, you don't keep idle cash in hand. The money you don't need now, but you may need after a short period of time, you can invest in such a way that it can be converted into cash quickly and meet the demand.
When things go in another direction and you are going through a hard time, is everything out of your control? You can do a lot of things to deal with the situation and minimize your losses. It is easy to blame others. You need to take responsibility when it comes to making financial decisions. You can blame others because you listen to them and lose money.
The thing is, no one forces you to take their advice and act accordingly. It is you who make the ultimate decision on what to do with your money. If you manage your finances properly, you can make efficient and effective decisions to improve your financial situation.
So what do you think? Please feel free to leave your comments. Thank you for reading this post. That's it for now. I'll be back with another post.
I'll say the last few years it's a goal to just invest period.