Investing is a great next step for those wanting to build up their finances, towards long-term financial freedom.
However, while the benefits of a successful investment strategy are certainly plentiful, there are also some risks that you must take into consideration when getting started, and some pitfalls you should be aware of to ensure you don’t make the same mistakes that others have made in the past.
Interested to find out more? For inspiration, and to put you in with the best chances of success as you get started in an investment strategy of your own, check out this list of three key mistakes you should avoid if wanting to be successful with investment.
Not preparing yourself financially for an investment strategy
There’s no point tying up your much-needed cash when you aren’t financially able to start investing just yet, and so before taking this next step in your life it’s worth getting all of your affairs in order first.
This means sitting down and going through your outgoings with a fine-toothed comb, getting any outstanding debts sorted and making sure that you can afford to have money tied up for a long period of time without struggling.
Having these creases in your financial portfolio ironed out before you get started means that you’ll be less likely to fall into trouble down the road, making your investment journey much smoother and beneficial.
You should always try and have a solid financial foundation before starting with building your finances.
Not doing your due diligence
There are always risks involved with any investment strategy, and so it’s important to accept that and make sure you’re comfortable with it before going ahead.
That being said, there are safeguards to put in place, and research that you can do in advance, to help ensure your investment strategy is as secure and bolstered as possible going forward.
If interested in the property investment market, for example, do some research and figure out where the best areas are to invest, as this will ensure that you have the best chances of receiving high rental yields, capital growth potential etc.
RWinvest are one of the many companies out there that offer free guides and information on different aspects of the UK property market, from where is best to invest currently, to individual breakdowns of different cities across the country, highlighting their strengths and weaknesses.
Of course, depending on the sort of investment strategy that you’re interested in, this will translate into different guides and courses from different people on different markets.
Following directly in the footsteps of others (to a fault)
Here’s an important piece of information to end on: of course, you want to absorb information from knowledgeable sources around you, taking advice from those that have been successful in the past and know what they’re talking about, but it’s also important to forge your own path to a certain extent.
There’s a reason that the people giving advice are successful, and it’s often because of the fact that they have capitalised on a market in advance, meaning that the well is sometimes already beginning to dry up.
This thought process is also important when thinking about whether you actually want to go through with the risk of an investment in the first place or not.
Ultimately, despite what others might say is the best course of action, only you know your finances, and your financial/personal situation should be the most important factor.
If you don’t know whether or not an investment is right for you, or how much you can comfortably afford to invest, perhaps get an external pair of eyes to help you out (such as a close friend/family member), or maybe even speak to a financial advisor.