Being an investment savvy woman has never been as accessible of an endeavor as it has in the last decade. No longer is the investment landscape filled with wealthy men in suits: sporting freshly polished shoes and a flashy Rolex. Women are now putting their money where their mouth is and showing the men a thing or two about how to get a decent return on the old investment portfolio. This has inspired more women to want to learn how to make their future as financially secure as possible. But taking steps in this direction requires a modest education in the subject of safe and risky practices associated with the investing process. With this in mind, it is perhaps appropriate to cover a few tricks of the trade for which women investors should be made aware.
How Much to Invest
Even if the modern woman has a lot of capital at her disposal, knowing how much to invest is a tricky subject that covers a lot of aspects of a given investment strategy. According to thebalance.com, as a general rule of thumb, less risky investors tend to think in terms of not risking more capital in an investment than they are sure they can afford to lose. If an investor loses too much capital, they may find themselves without the means to invest again for a very long time. For this reason, women who are starting out investing should err on the side of being more conservative with the amount of capital they are willing to invest in any one investment opportunity.
Know When to Take Your Winnings
Investing is only lucrative if you walk away from the table with more money than you started out possessing. Many home builders have benefitted from smart investment choices. Only then has your money worked for you to generate a meaningful return on your investment. Unfortunately, a lot of investors see their investment start to make money and have no idea when they should pull their capital and their profits out of the investment. They watch like a deer stuck in headlights as their profits rise for a while, take a quick turn and helplessly spiral into the negative. To avoid this unfortunate outcome, the smarter and safer thing to do is to determine before hand how much profit is realistic and plan to get out precisely when that goal has been reached. You might get out a little soon and miss some profits, but no one has a crystal ball. Since it is impossible to predict the future with absolute accuracy, earning realistic profits is always better than earning none or doing worse: losing your shirt.
Borrowing Creates Debt
While searching through reviews for cashnetusa and other online lending firms, it may seem tempting to want to borrow money to put towards that next investment opportunity. Despite how tempting this trend may be, the risks of using debt to invest is very risky. When taking out a loan, it is best to think of this funding vehicle as being for other purposes besides investing, unless you can ensure that the type of investment comes with guaranteed profits or something equally valuable that will seriously mitigate the risks and amount of capital loss if any occurs. If no such guarantee or loss mitigation mechanism exists, then borrowing money for such an investment opportunity is not as reasonable of an investment strategy as it may seem at first glance.
Investing With Whole Life Insurance Policies
Checking into insurance quotes for life insurance options, it can sometimes seem attractive to think about investing in a whole life insurance style policy because of the investment component associated with this type of policy. According to nerdwallet.com, this type of investment vehicle is generally not such a great option unless you have already exhausted the 401k and IRA options available to you, and you actually need life insurance. Otherwise, this can be expensive, risky and not a very efficient way to invest to generate profit for much lower income earners.
While new investment strategies and opportunities emerge every day, so do the risks and rewards that go along with them. This means that the modern, investment-savvy woman must always be on her toes to make certain that what she is investing in is the right investment opportunity for the right amount of capital risk. When building a home your must ask are the interior glass doors really going to increase my profits? If that investment sounds too good to be true, then this is when it is time to trust her gut and err on the side of believing that her gut is probably right; because, it is better to miss out on earning profit when the investment opportunity seems questionable at best.
By: Kevin Faber