Like gambling, investing in stocks or crypto-currencies can give the feeling that large amounts of money can be generated very quickly and quite easily. However, this idea is totally wrong and beginners risk becoming true addicts and losing a lot of money.

If on the contrary, you are willing to take some calculated risks and you want to start investing, I give you 5 tips that will make you take less risk when you decide to take the plunge.

To begin, you should be aware that any investment always carries a risk, no matter how small it is. And the greater the risk that we are willing to take, the greater the profitability of that investment should be (in theory).

Be careful! Investing is not the same as saving.

When we save, our goal is to put a certain amount of money aside, to have it available in the future ... if/when we need it. However, when we invest, our goal is to grow and multiply our money in the medium or long term.

1. DON'T BE CARRIED OUT BY YOUR EMOTIONS

While investing you must be patient and not make impulsive decisions. It is something that surprises many new investors when they contact me : they tend to believe that they need more information to make a better decision. But without proper emotional hygiene, money management becomes complicated and even very dangerous. In addition, you must frequently review the evolution of your investments ... and this requires discipline.

If you want to know how emotions impact your relationship with money, simply answer the following questionnaire.

2. HAVE A SAVINGS FUND FOR EMERGENCIES

Before investing, we must have an emergency fund, a financial cushion to deal with unforeseen events. You should only invest that extra money, in no case should you invest money that is necessary to cover your basic needs. To give you an idea, most financial advisers recommend keeping aside 6 months of expenses. Not 6 months of salary, but 6 months of expenses. If you find it difficult to assess what this number is and how to obtain it, I developed some tools (for me first, and then for some of my clients) that I am willing to share with you.

3. PLAN YOUR INVESTMENT

It is important to identify what your goal is, how much money you can invest, when to stop in case of losses (yes yes ... unfortunately that can happen) and in what period you want to reach your goal.

The idea is simple: Investing is like a trip. On any trip, you need to know where we are now and where we want to go. While most people "think they know what they want," it is easy to let our reality limit our ambition.

That is why I like to challenge everyone's true motivation in order to validate the objectives. What would you love to achieve if you knew everything, had access to all the resources, and had the time to achieve it? Look at it this way! Why build a plan to get halfway to where you really want to be, work on the "journey / project / investment" (call it what you want) for years, achieve our goal ... and be sad and spiteful because we waited unconsciously something else from life (something we could have identified from the start?) If you have to dedicate so much time and effort, let it be 100% worthwhile and help you reach your true goal!

4. INVEST IN SOMETHING YOU UNDERSTAND

You must choose the right products for yourself and those that suit your risk profile. We should never invest in a product that we do not understand. It is not just me who says it : Warren Buffet, possibly the most successful investor on the planet, agrees with that ...

If there is something you do not understand, it may be due to a lack of financial education. Well, in this case, educate yourself and do not let emotions such as shame, guilt, anger, dominate you and lead you to do something that you will regret (remember point number 1. DO NOT BE CARRIED OUT BY YOUR EMOTIONS).

It could also be that the project or product you are considering investing in is simply too complex. With complexity come inefficiencies, costs, risks ... that ultimately reduce profitability. Yes! You may miss out on opportunities by not investing in some opportunities that will end up being lucrative, but you will sleep better!

5. DIVERSIFY

Especially for new investors, it is important not to put all your eggs in the same basket. For example, it is more risky to put all your money in Tesla shares (so to speak) than to invest it in a mutual fund or in several mutual funds.

With experience, more knowledge and better management of your emotions, it is something that you can surely do yourself in the future (and you will save the expenses that intermediaries will charge you to do things for you).


From 1 to 10 ... How well do you manage your money? How well do you handle your emotions?

May emotional hygiene and financial hygiene help you create a better future for yourself and your family!