The stock market can behave like an unruly animal. Sometimes, there is a raging bull market that raises everything towards the sky. Sometimes, there is a bear market the beats even the best of stocks into submission. If you are entering the stock market, you are going to have to attempt to tame the beast. Depending upon how you handle yourself, it can be a really rough ride or smooth sailing. Use the five steps to below to properly prepare and plan your investments.
1) Always Set A Limit
Every individual that invests in the stock market should never invest beyond their individual means. Always set a limit for the amount of money you are prepared to lose ahead of time. For example, if you have determined that you're going to invest in a particular mutual fund, make sure you set a stop loss. This will ensure that in the event of a stock selloff, you will exit your position rather than continue to take losses. Depending upon the amount of money you are investing, your stop loss may be between 10 and 20%.
Not everyone is going to be a millionaire in life, but building wealth is as simple as saving money as you go throughout life. You do not have to have a high income in order to accumulate wealth during your lifetime, but you do need to have discipline and determination. Today, let's look at my top 5 proven wealth building strategies.
1) Pay Yourself First
The biggest mistake that most people make in America, is that they pay their bills and then play with the rest of their money until they get paid again. In order to accumulate wealth, you must learn to pay yourself first. If your employer has a 401(k) plan, enroll in the plan, and maximize your contribution to match their contribution. Because this money comes out of your paycheck before you see it, you will not have the ability to spend it after you get paid.
Car insurance is a mandatory expense, but you should not pay more for it by using the wrong insurance company. A few simple common sense steps, combined with smart web browsing can really save you a lot of money when it comes time to renew your policy.
Step 1 - Pay A Higher Deductible
One of the easiest ways to cut your car insurance premiums is to reduce the risk for the insurer and accept a higher deductible on your policy. Your insurance company's standard deductible may be $250, but if you raise your deductible so that you pay the first $500 of any claim, you will receive a sizable reduction in your monthly premium. This reduction is due to the fact that you are assuming more of the risk. While this may seem like a bit of a gamble financially, the odds of being involved in a collision are relatively low and your deductible would only be a one time payment.