Know What Kind of Investor Are You
Do you have money in your savings account or have you built your emergency fund before you started investing? If you haven’t, then you’re a kind of investor that ‘s a Borrower. A type of investor that invest on borrowed money. These investors believe that by investing, they can increase their assets and pay their debts immediately. They don’t realize that investing money that does not belong to them only get them more debts. Most of them or all of them may just end up getting broke. Borrowers may be the worst kind of investor and you shouldn’t want to belong on this kind.
A kind of investor that is the opposite of a borrower, is a Saver. They invest their saved money and are smart when it comes to managing their finances but sometimes they are not good investors. They do not want to lose their capital or are scared of risks. They may be found investing in low-risks investment vehicles that also gives low-returns. Savers may be smart but they will rely to someone smarter or experienced than they are when it comes to investing, so savers would invest their money into Mutual Funds or Unit Investment Trust Funds instead.
Gamblers are those who does not know what they are doing or doesn’t know where they can they invest their extra cash. Investors of this kind are followers.They invest on things where many invest on or where the trend is, not knowing what they are getting into. Gamblers buy when the price is at its ceiling, but does not realize that they cannot earn anymore from their investment. Instead, they hang on to their investment and are waiting and praying for the price to go up again. These type of investors has a high possibility to lose a lot or worse, gamblers may end up losing everything they have invested.
Traders are investors with a good amount of money that they can invest and wants to increase that amount fast. They would find cheap stocks and sell it high. Traders can also be found trading currencies where you can lose or gain money instantly. Sometimes these investors knows what they are doing but sometimes they don’t. Traders might think that they are doing a great job when they are earning but when they start to lose their money, traders may began to panic and lose everything. Some may be successful to be a trader, but those are the smart and experienced ones. Trading maybe good for you, if you can dedicate your time on monitoring your paper assets.
The Real Investors
Real investors have their savings or emergency fund set before they start investing. They know how to manage their finances properly and only invest their extra money. Real investors studies the market and knows what investment vehicles are right for them. They are not afraid of risks because they believe that it’s all part of investing and they can manage them. They invest for the long-term and does not rush things. These investors know how to increase their assets and knows when to buy or sell their stocks. Real investors know that they get their earnings when they buy not when they sell. They are always prepare and can earn, even if, when the market is down.
Before you start investing, you should know first what kind of investor are you. By knowing who you are, you can help improve yourself.
If you are a borrower, you might want to stop investing for now and avoid borrowing from others. You should learn to save and pay off your debts then aim to be a real investor, not a gambler or trader.
If you think you are a trader or a gambler, you might want to think again and assess yourself. If you are just digging yourself into debt, you should change your mindset and prepare yourself to be a real investor someday.
Aim to be a real investor and you may be one step closer towards being rich and financially free.