Buckets And Money

Investment is an idea that money is able to make new money. It is not a secret that the investor-beginner does everything in order the invested money brought in a maximum profit.

However, it is often a big mistake. The matter is that the maximum benefits these are also obligatory big risks. The beginning investor has no experience, and, therefore, cannot trace all “reefs” which disappear in an investment object. As a result, there is a high probability to appear not only without profit, but even with heavy debts.

Therefore, it is necessary to act in a different way. At first, it is necessary to save up some money, so-called “a cash fat”, and, only then to try more profitable types of investments.

Let’s try to give a figurative example. Let’s imagine that money it is a river which flows into a bucket from above. When it is filled, water will flow into the second, and so on.

It is a correct way!

Let’s fill at first the upper bucket, i.e. we will obtain guarantees of our safety (the policy of accumulative insurance which will allow not to lose and keep the capital in case of disability), then a bank deposit or an emergency reserve. And, only then we pass to the third bucket – investment into mutual fund, etc.

The problem is that people pass the two first buckets and directly want to fill the third.

When building the house, it is more interesting to observe how walls appear, than to dig a foundation. And after all each builder will tell that the foundation is the most important part of the house.

Unfortunately, good luck smiles not to everybody. Robert Quiossaqui said once about it: “The road to wealth is paved by the broken lives of careless people”.

Therefore, take care! Don’t leave your first two buckets empty.

Comments are closed.