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Questions regarding investment advice are typically not satisfactorily answered for many people. The idea of a one-size-fits-all solution is simply a misnomer when it comes to investing, as in life itself. But identifying a well-rounded strategy that works for your unique investment style — including some thoughts on investment size — can be identified with a bit of research and planning. How much money should you invest?
Check the tips below
Start with your cash-flow considerations
Looking at the overall health of your bank account is a great way to create a baseline understanding of how much money should you invest. If you make a lot of withdrawals to pay for routine expenses or are burdened with a large rental bill every month while you search for a home to purchase and move into you may want to consider a smaller contribution to your investment portfolio in the short term.
However, it should be noted that investing, even a small portion of your income each month is a great way to build the habit over time. Even if you can only contribute $100 one month, putting that cash aside will help you grow your investments and learn the market better so that you can take full advantage of the $1,000 you put into your account in three or four months’ time.
One important aspect of this calculation is in the coronavirus stimulus checks that have been going around during this past year. Many investors are finding that this capital infusion is fantastic for covering household expenses, or even the rent bill for a month, but that it doesn’t significantly change their overall financial picture in the long run. If your stimulus check isn’t being directed into essential bill paying, you might consider investing the entire thing (as this next round of funding is released) in order to boost your savings portfolio.
Make a plan to create a growing investment
Setting aside capital can be hard to do, but the more you push into your investments the larger dividend payments you can expect in return. If you’ve created a strong enough savings and investment profile, this can add up to a full, secondary salary for you and your family. One great place to park your cash is in a real estate property. Realtors, like John Foresi, Venterra Realty CEO advocate for investments in the real estate space.
This is because a well-planned rental home purchase will bring in more than your mortgage payment will extract on a monthly basis, making your cash flow positive within a few short weeks or months. In addition to the rental income generated from a real estate property, the underlying value of the home increases at a steady rate over time, making a sale in the future a highly lucrative option for those who want to move on to other property markets or need to liquidate cash in a hurry.
Branch out into new and lucrative opportunities as well
In addition to pushing capital into the real estate and other commodity markets, many investors are finding that a small initial investment in cryptocurrency can net a major return on investment in short order. Looking into a Coinbase review can help you choose a cryptocurrency exchange that you trust with your investment and it’s a good way to determine how much money should you invest (such as Coinbase, Kraken, or Binance). A review of these cryptocurrency exchanges can help you gain a handle on the beginner terminology and fees associated with crypto for traders on each platform.
Cryptocurrencies offer a huge variance in pricing over time, in fact, Bitcoin doubled in price in January before hitting price resistance and falling back down. The intense fluctuations mean that a smart investor can push a smaller investment sum into a Coinbase wallet in order to begin seeing wildly successful returns.
The truth is, finding the sweet spot for your investments is a personal question. Understanding your needs and cash flow requirements will help you understand where to place your investment capital and how much money should you invest.