What are the ways to improve investing mindset

You may not realize it, but many of the things you do on a daily basis can help you become a better investor. Whether it’s your job or something you do in your free time, if it involves math or analyzing numbers, you’re helping yourself grow your financial knowledge and set yourself up to make better investing decisions down the road.

This article will introduce you to six different ways to become a better investor so that you can apply them to your life today and start making more money tomorrow!

1.  Learn how money works

2. Create a budget

3. Find extra money

4. Know where your investments are going

5. Invest in yourself first

6. Don’t invest what you can’t afford to lose

1) Learn how money works

It sounds basic, but it’s easy to be blinded by finance jargon. To avoid any financial confusion, it’s essential that you have a firm grasp of money basics. The more you know about money, how it works and how investors make their investment decisions, the better prepared you’ll be to understand why an investor is making an investment decision.

Whether your goal is short-term profit or long-term growth (or both), get informed on all aspects of investing before you jump in with both feet. For example, knowing what factors impact market volatility can help guide your strategy as an investor and help to prepare for good or bad times.

2) Create a budget

If you are a beginner planning a budget is the key. How do you know how much money you have to invest or save if you don’t know where your money goes? This is something that only comes with time, but it shouldn’t stop you from planning. Get out your checkbook register or bank statement and separate your expenses into categories like housing, food, transportation and so on.

Once budgeting has become second nature (and before getting too far into market research), set aside some cash like 5 percent of your income for start your first step in investing. You can increase the investing percentage step by step.

3) Find extra money

Finding extra money each month to invest is one of the best ways you can start accumulating wealth. But that doesn’t mean it is hard of it costs a lot time. In fact, making small changes in your spending habits and taking advantage of extra income sources can make all the difference.

Saving even a little bit more each month can add up over time and put you on track for greater financial success in no time. The key is consistency. Make an effort to increase your savings rate by just 5% every six months and you could find yourself saving 30% of your income in as little as three years!

4) Know where your investments are going

In addition to managing your investments effectively, you also need to make sure that they’re going where you want them. So take some time and figure out what kinds of investments you’d like in your portfolio.

Are there particular sectors or industries that interest you?

Do you have any financial goals or is there a social cause that’s important to you?

Once you know where your money should be going, it will be easier for you to put together an investment plan. Keeping that plan up to date with changes can help ensure your investments are working for (not against) your long-term financial health.

5) Invest in yourself first

If you’re looking for advice on how to start investing, a good place to start is with yourself. We all have different financial circumstances and priorities, but if you’re just getting started on your investing journey, make sure you’re taking care of yourself first. If you don’t need it don’t spend on it.

The same goes for cutting back elsewhere. When it comes time to invest your money, these small choices will allow you more freedom in where and how much you put into your investments.

6) Don’t invest what you can’t afford to lose

It’s important to take calculated risks when investing, but it’s just as important not to take financial gambles with money you can’t afford to lose. A good rule of thumb is that you shouldn’t invest in something unless you have at least 10% of your income compensate for that investment.

If so then you run a significant risk of being unable to handle major dips in value due to market conditions. Even though experienced investors also doing this mistake, due to less emotional control. If you can commit at least 10% in a periodic consistent investing and commit it for 5 years, then you can sustain your portfolio for a long run.

( If you wish to Watch a cool video explaining this topic – CLICK HERE )

Author’s disclaimer

Choosing to be an investor is not a decision. It’s a journey. You have to learn many skills and get some good and bad experience along the journey. But the reward it pays in the end will be worth to all the highs and lows you have seen throughout your journey. You can start investing right away with Mutual funds or Index funds.

Index funds are beginner recommended investing opportunity by many big investors like Warren Buffet. So instead of jumping into stocks , bonds or any other securities you can start with mutual funds.