When Should You Invest?

You know how important it is to make investments. You also see people making investments and getting a good return. So when should you invest? You have to take a look at your present financial situation before making any investment decision.

Have a consistent income

You cannot think of making investments when you don't have income. No matter how good an investment opportunity you have, you may not be able to make your move. That's the harsh reality.

When you struggle financially, your focus is to deal with the situation and make a living. Whether you do a job or business, you need to have a consistent income first before making any investment.

Building an emergency fund

You have income and you can take care of your family. That's great. You are too excited to invest your money. Do you have an emergency fund? If the answer is no, you should build an emergency fund first. You need to have three to six months' worth of expenses in your emergency fund.

What if you invest when you don't have an emergency fund?

When you invest in any assets whether it is stocks, real estate, and cryptocurrency, you think long-term. You may not make a quick return on your investment. But you may need money at any moment. In case something happens and you need money to fix that, what would you do?

You have invested all of your money. You have to sell your investments and unfortunately, you may sell your assets at a loss. For example, you invest in cryptocurrency. Now we are in a bear market. You may make a huge loss if you sell your crypto.

You make investments to get a return, but end up making a huge loss. There is another option. To face an emergency situation, you have to borrow money from others or take a loan from the bank which you have to pay with a high-interest.

You don't want to end up being in this situation to face an emergency situation, do you? So create an emergency fund first before making an investment. You don't have to go through this kind of horrible situation when you maintain your emergency fund.

No high-interest debt

You have a debt and you have to pay high interest. It is better to focus on paying off the debt. When you invest, you expect a return, but it is not guaranteed that you will get a positive return.

It is certain that you have to pay your debt with high interest. You have to pay more the longer you take to make the payment. It can be a burden. You position yourself to grab investment opportunities when you focus on paying off your debt.

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.

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