We invest our money with a goal make more money. The ‘why’ of investing isn’t complicated, but the ‘how’ is far trickier. Whether you’re looking into stocks and bonds, dabbling in cryptocurrency or seeking newfound opportunities in real estate with barrier-busting platforms like addy, you should know what you’re doing.
With that in mind, let’s take a look at the six basic rules of investing to guide you on your journey to passive income and financial freedom.
Six basic rules of investing
First things first: why are you investing? What is your goal? Answering these questions are imperative first steps so that you’re not just randomly putting money here and there. Perhaps you’re looking for some more money for retirement or you want to start early in saving for a downpayment for your first home. Whatever your reason for investing, it’s important to accurately identify it so you can have a plan in place.
Planning also means thinking about where you want to put your money. When it comes to real estate, an asset class welcoming more and more people to it, it’s important to know what to look for when comparing platforms.
Investing allows for passive and portfolio income. And both of those sources of income generally sprout from active income. That means you need to be saving money first in order to invest.
When you’re saving, you’ll want to keep in mind how much of the money you’re going to invest will be liquid, and how much will be tied up for months or even years. For example, addy investment opportunities often come with a timetable for returns that forecast when your investment will be returned as well as what you can expect in terms of distributions.
It’s important to note that addy, like other real estate investment platforms, can’t really guarantee exact dates and amounts. So when you invest your money, it may not come out for a while. So save money for investing – and save money to use if you can’t retrieve your investment right away.
This is a common refrain but one you can’t forget. Diversifying one’s portfolio can minimize risk, and increase reward when done right.
Among the ways to diversify a portfolio is to invest in more than one asset class. So if you’re used to trading stocks, perhaps you’d be interested in real estate investing, where volatility tends to be down and long-term passive income is possible. Stocks, crypto and real estate all have their benefits and drawbacks worth keeping in mind when investing.
Learn about potential opportunities and invest accordingly. You should always know what you’re investing in – and have a reason. Certainly, you don’t want to overwhelm yourself with too much information, but there should be reasoning and thought behind your actions.
Notably, this involves due diligence, which takes time and effort and evaluation. With platforms like addy, due diligence is conducted by a team of experts and then presented to members. They can read the Offering Memorandum and assess predictions to decide whether to invest.
Although a simple principle, it’s one of the hardest to adhere to. You can’t just invest and walk away, but you also can’t panic when something goes wrong. You need measured responses to the fluctuations of the market, and finding it comes both with preparation and experience.
Expect the occasional downturn and don’t let that discourage you. At the same time, keep in mind the long-game and don’t be afraid to cut losses as needed to regroup. No market is static, so it’s important to continually learn more and adapt. Draw on your planning, and over time, you may be able to recognize trends and at your best, predict positive turns and take advantage.
This expression is way overused, but it’s important nonetheless: trust the process. Remember that plan you put together with specific goals, and all the learning you did along the way? Well, it’s all part of your process that you need to continually focus on.
Chances are you’re not going to time something perfectly and hit it big – you certainly may, but you can’t put that in your plan and hope for it. Instead know that it’s not so much timing of the market but the length of time you’re invested that will likely lead to success. Stay focused throughout your investment journey and don’t get caught up in panic or hype.
Invest with addy
With commercial real estate opportunities available for members, addy offers means to diversify one’s portfolio with a traditionally inaccessible asset class. Investing in institutional grade CRE in Canada welcomes beginners on their financial journey as well as seasoned pros. While we set the minimum investment low at $1 to make these opportunities accessible for all, we also welcome accredited investors who have more experience in the realm.
We suggest seeking out financial professionals to help you on your way. You can also connect with the addy squad and community members on Discord to chat about real estate, technology, upcoming properties and just about anything else. Maybe you’ve some other rules of investing you want to share – you are certainly encouraged to.
Through crowdfunding, addy makes investing in real estate simple.
One thought on “Master the Six Basic Rules of Investing”
Patience is another key to investing successfully. When you buy high quality investments like well located and managed commercial real estate, time is on your side. Investments that might rocket up in days or weeks can also drop like a rock anytime. Quality real estate and good stocks return consistently for years and decades rewarding the investor.