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What are 10 questions to ask yourself before investing a penny

ByteNews
2022-12-11 / 0 评论 / 2 点赞 / 7,654 阅读 / 1,502 字 / 正在检测是否收录...
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What are 10 questions to ask yourself before investing a penny?

Keeping it to ten is difficult but I will make a stab at it.

  • Do I need an emergency surplus of cash in case I lose my job? If so, do I have 3-6 months of living expenses saved up?
  • What do I need beyond pure investing advice? For example, if you are an expat you might need account portability as you are moving around. Or if you are high-net-worth you might require inheritance tax planning.
  • Do I understand the investment, or have somebody (like a consultant or advisor) who does?
  • Do I often get influenced by the views of the news media, friends and family? Will I therefore panic if markets go down?
  • Following on from the last question, do I therefore need an investment advisor to control my emotions as much as for knowledge?
  • Am I comfortable with volatility because risk and volatility aren’t always the same thing.
  • What am I investing for? A medium-term objective, or something like retirement? If it is short-term, it is best not to invest in most kinds of stock assets, as they are best left as long-term investments.
  • How much risk do I want to take?
  • How much risk am I taking now by leaving money in cash, due to the threat of inflation and currency falls?
  • Is my attitude to any of the above sensible? For example, am I too risk-adverse or want to take too much risk?

However, I would say one of the biggest mistakes people make is overthinking things in the first place, and asking too many questions.

As per this quote, most of life is about showing up:

It is better to get started today with 80% certainty than wait for 99%, as that never happens.

That is one reason people tend to “think about” investing for months, years and even decades!

Subsequently most regret not getting in sooner, as it usually allows people to retire earlier, help out children etc.

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