Ways to find money to use for investing
As the saying goes "it takes money, to make money" savvy investors know that it takes cash to enter the investment market. However, this can be one of the most difficult things to do, if you are looking for ways to either get started investing or increase your portfolio. Many people assume that they just don't have enough to invest, however with some creativity and planning, you can find the cash you need, to begin investing. Here are some ways to find money to use for investing-
- Trim your expenses-Most people will automatically assume that they simply have no extra money. However, after taking the time to look closely at how they are spending, those same people are surprised to learn that by making a few simple changes, they can free up some cash to invest. There is most likely an at least a few things that you spend money on, that if you reduce the cost or eliminate it all together, you can find money to use for investing. Take a look at how much you spend on the small, inconsequential things, such as trips to the convenience store, lunches out and or even if you are financing a bad habit, such as:smoking or drinking to much alcohol. (Giving these up means getting healthier and freeing up cash.) The bottom line is that all of these things can add up quickly, and should you be able to reduce or eliminate them, you can free up significant cash, for investing.
- Get rid of debt-If you have any sort of debt, then it is important to understand that the debt is tying up your money. This is money that you could be using to invest, and make more money. If you have any consumer debt, now is the time to pay it off and free up your money. While you may have to postpone your investment plans, paying off your debt, will give you a chance to make some serious investment decisions, without worrying about how to pay your bills. This is especially important if you are a younger investor, since investing has a time value to it; the younger you are when you invest, the longer you will have to maximize your investment's potential, rate of return. Keep in mind that paying down debt doesn't have to be hard. Financial experts recommend beginning by paying a little extra on top of your required monthly minimum payment. Finally, once you have paid off your debt, make a commitment to stay out of debt. Use the money that was tied up in maintaining your debt, to make long term successful investments.
- Respect the budget-Too many people overlook the need to write a budget and stick to it. Your budget does not need to be a something that you abhor, but rather it can be used as a tool, to help you meet your financial goals. Writing a budget and sticking to it, will help you see where your money is going. You want to make sure that you are spending your money, in the most effective way possible. This is best done by managing your money, and not letting it manage you. Once you know exactly where your cash is being spent, you can make changes that will allow you to funnel more cash into your investment portfolio.
- Look at the big picture-If you are really committed to becoming an investor, it will be necessary to look at the big picture. For example-While an expensive European cruise would be a lot of fun, could you take a smaller, less costly vacation and use the extra money to invest with?No one is advocating that you have to give up everything, but those people who are willing to make sacrifices, can often become the most successful investors.