"Investing for Dummies" advises that saving money is the first prerequisite to investing money. It also advises to have knowledge about stocks, real estate and small business, since they are the three most profitable investments. This knowledge is required to make successful investing decisions, while other options include bonds, mutual funds and exchange-traded funds.Continue Reading
It advises to have a realistic expectation about financial returns. Expect to think long term, at least five to ten years or longer, for investment returns. Typically long-term returns are around nine or ten percent per year for stocks and real estate, and business owners can earn high returns after successful years of hard work.
Assess the risk of the investment with the time frame of the expected financial return. For example, low-risk, safe investments are better used for short-term returns, while long-term investments are better suited for high-risk investments. It advises to diversify investments to reduce the overall risk involved with investing and to take advantage of tax-deductible retirement accounts.
It advises that patience is important to successfully invest, because all investments have periods where they have depressing returns; selling when an investment is down is ill-advised. Hold good investments for the long term for the best profit and avoid trading as much as possible; this minimizes costly mistakes.Learn more about Non-fiction