Sunday, March 4, 2007

How Much Money Should You Invest?-2

Hi, Welcome Back! I asked in my previous post to think about 2 questions. How much money should you invest in the stock market? Do you think you should invest all your savings? For the second question this is not necessarily true to invest all your savings? I think that would not be a smart investor. But how much should you invest? First, let's take a look at how much money you can currently afford to invest. Do you have savings that you can use? If so, great!

However, you don't want to cut yourself short when you tie your money up in an investment. What were your savings originally for?

It is absolutely important to keep three to six months of living expenses in a readily accessible saving account-don't invest that money! Don't invest any money that you may need to lay your hands on in a hurry in the future.

So, begin by determining how much of your savings should remain in your savings account, and how much can be used for investments. Unless you have funds from another source, such as an inheritance that you've recently received, this will probably be all that you currently have to invest.

Next, determine how much you can add to your investments in the future. If you are employed, you will continue to receive an income, and you can plan to use a portion of that income to build your investment portfolio over time. Definitely speak with a qualified financial planner to set up a budget and determine how much of your future income you will able to invest. (An up coming post we will discuss The Ultimate Financial Management-The Budget...stay tuned)

PS: Never borrow money to invest, and never use money that you have not set aside for investing! And with a help of qualified financial planner, you can be sure that you are not investing more than you should-or less than you should in order to reach your investment goals. Here are two websites to examine. FinancialPlannerNetwork! or
fpanet.org You can also search the internet using the keyword search "financial planner" using Google or Yahoo.

Happy investing......stay tuned for more.

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