This is a sponsored post.
If you are a new investor (having invested for five years or fewer), you have no doubt learned a lot. But you know there’s more out there to understand. It takes a long time to get the knowledge and experience found among the world’s greatest investors. Warren Buffett said that the greatest tool for investing is time. That’s why so many rich people are old. Getting rich while you are young is difficult, but it can be done. Whether or not that is your goal, you’re going to have to learn to invest in different ways, at different risk levels, if you want to enjoy levels of financial security at different stages of life. That’s why I recommend making an investment for different personal needs.
Here’s an example. I have the need for financial security, creative fulfillment, and fun. These are three arenas of life that are very important to me. And I’ve found an investment for each one of them. Here’s how I do it.
1) Invest for Security. These are my long term investments: my IRA, my mutual funds, my ETFs. I’ll get rich on these, but I won’t do it quickly. But that’s OK. This isn’t the only way I invest my time and money. I allocate about 33% of my savable income in this direction, and it adds up fast. With the power of time and compound interest, this makes me feel secure about my long term future. It’s taken care of, leaving me most of my time to worry about matters closer at hand.
2) Invest for Fun. In my spare time I like to invest in Forex trading. It’s a way I can take just a few minutes a day, and sometimes win a lot of money! Forex is about the quick value changes that happen to currencies. Currency values, and the values of other financial entities, fly around up and down all the time. The Forex markets pair up currencies, and allow investors to make value judgments about how the value of one will change relative to another. If the investor gets it right, he or she will get money based on how much the value changed in their chosen direction. It takes a little while to get the hang of it, but it’s a numbers game, and eventually you will learn how and when to guess, as well as how to hedge your winnings.
3) Invest for Creativity. This may sound impossible, but realize that all investment isn’t an investment of cash. I also invest my time. One of the areas where I invest my time is in education and personal development. I take synthesizer and voice lessons. I’ve also learned woodworking, and I’m always reading about gardening methods to improve the plants I grow outside and in my downstairs hydroponics setup. These are the areas in my life that give me the most personal fulfillment. Without them, I wouldn’t enjoy life the way I do, so I make sure to invest a lot of my time in this, as well as the other two areas in life where I make my money.