People are no longer guaranteed a pension when they retire so now they have to rely on themselves to invest their money and to find a great return on their investments. Unfortunately most people don’t know how to find a good return on their investments, instead the by lottery tickets and pray. Needless to say that’s a pretty bad retirement strategy. Here are some best practices to find a good return on investment.
Most people are so terrified of losing money that they invest “not to lose” instead. The problem with this strategy is that they never win either, and they don’t get rich either. The notion that financial security comes from living frugally and working hard so you can contribute to a mutual fund isn’t working. Most financial planners will tell you that diversification minimizes risk, but Warren Buffet who is probably the smartest investor ever says differently. He says that “diversification is protection against ignorance”.
Finding an investment that loses money is pretty easy. Simply buy a car, you will lose money before you even drive a mile. Buying property can give you the same result if you’re not careful. However one of the best returns comes from educating yourself. You have access to some of the best financial teachers in the world and there is nothing stopping you from learning.
Finding a great return on investment starts with understanding money and how it works. There is no magic formula for getting rich, despite how many ads you see promising you something different. If you want to find that perfect investment vehicle start by educating yourself. One of the first things you need to learn about is cash flow. If you want to be rich you need to focus on finding investments that give you cash flow. Finding an investment that makes you money and generates cash flow is no easy task. Properties or stocks can both generate cash flow in the hands of the smart investor or lose horrible with a bad investor.
I have helped clients who are now financially independent and working part time, because they keep the idea of cash flow in the forefront of their minds when investing. Start by focusing your energy on educating yourself, read books and articles and learn absolutely everything you can about finances. Then put together a clear investment strategy. With the right education anyone can achieve financial freedom.