Term before Investing


Its true once, before starting to invest we should see our financial conditions in advance. If the financial conditions we've been good, that means we are ready to start investing to achieve the financial goals of our family.

However, if the financial conditions we are less good, then the step we need to do is fix our finances in the past, so that investments can be more optimally.

There are 3 conditions that must be prepared before investing, namely:

Should Have an Emergency Fund
This is the amount of money that needs to be prepared in order to assist us when facing financial problems in life. Financial problems could have occurred within our own families, or it might just happen to a parent or sibling. In emergency situations such as a parent or a relative is sick, have an accident, or misfortune such as flooded, then surely we should be spending money that sometimes the value is big enough.


How the magnitude of the emergency fund should we prepare? There are at least 3 X the monthly cost of fund families. For example, the monthly cost of our family a $ 500 emergency fund, then we need to have is a 3 X $ 500 = $ 1500.

This is the number of aliases on condition that must be prepared before investing. Left in an emergency fund in a savings account, or it could be in the form of gold. Before you have an emergency fund, we should not invest in the past. Why? Because investment in addition to increasing our assets, but also can go down in value, the more liquid it is not easy sometimes. So, when emergency situations occur, and we do not yet have a sufficient emergency fund, then it could be that we have to withdraw our investments immediately, and could have suffered heavy losses.

High Yield Debt Settlement
Consumer debt such as credit card debt or pawn shops for example, has a fairly high interest rate. For example, when we have credit card debt then the interest charged can reach 35% per year. It is certainly very much higher than the investment return.

Just try compare, for example, we invest with target return of 15%, while debt has 35%. What does it mean? That is, we are having a minus 20%. As long as we still have high yield debt, should delay its investment first. Why would we invest while we are still burdened with the high yield debt? Complete the first loan, do not leave at all. It was only after did not bear the burden of the debt again, we can start investment.

Insurance
Life and insurance are the main ones. Do not forget the protection on this one, because if the giver a living don't have life insurance, then the real family income already.

Similarly, if the whole family we have no health insurance, then the cost of entry; medical treatment and hospital costs, doctors can spend our money.

Check first whether the giver of a living family already have life insurance. And whether the work's been giving health coverage for the whole family is enough? If it already exist, then we can rest easy investing.

The financial investment is a step that must be done by the entire family to be able to achieve the financial goals of the family. However, before you start investing, check 3 steps to Yes.

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