Joseph Dillard

Investing is available to everyone but everyone is not ready to start investing. How do you know if you are ready? There are some important things to consider before you invest in anything. First you should look at your debt situation. All debt is not the same. If you have a lot of credit card debt, then you are probably not ready to start investing. You can start investing with a lot of credit card debt, but the return on your investment is not likely to be higher than the interest rate your are paying on your credit card debt. Therefore, it might be a better idea to pay off your credit card debt first so you can maximize your investment efforts.

Next, your need to look at your savings situation. Except you are not looking at it for the sake of investing. You need to determine whether or not you have an emergency savings account. It’s not mandatory that you have an emergency savings account but it’s a good idea. Why? Because unexpected things happen. I always say to expect the unexpected. If you start investing without an emergency savings account and you lose your job, where is your emergency money going to come from? Exactly. Your investment account. The rule of thumb is to save 3 – 6 months of monthly expenses in your emergency savings account. It might seem that you will never be able to begin investing if you need to wait to establish an emergency savings account. Do what is best for you and realize that emergencies happen and you need to be prepared.

Finally, you need to look at your budget. Remember, when you budget you look at your monthly income and your monthly expenses. When you subtract your monthly expenses from your monthly income and you still have money left over, then that surplus can be used for Investing. You do not need a whole lot of extra money to begin investing, but you do need extra money. If your monthly expenses are more than your monthly income, where are you supposed to get the extra money from to invest? You will need to wait until you pay off some debt or you will need to decide if all of your monthly expenses are needs or wants. If some are wants, then you can decrease and/or eliminate them to provide funds to begin your investing journey. You’re almost ready. All the best.

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All investment strategies and investments involve risk of loss. Nothing contained in this website should be construed an investment advice. Any reference to an investment’s past or potential performance is not, and should not be construed as a recommendation or as a guarantee of any specific outcome or profit.