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Steps in Investment

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Step in investment
Investing is definitely a good thing in order to get better income in the future with various types of return. There are seven steps that we must follow to invest in healthy ways.
1st step Before we invest in anything, we must make sure that we have strong economic foundation. This prerequisite is the important thing to consider not only for personal investor, but also for business, government, and financial institution. By managing our budget we will know our financial condition. Make sure that the money spends is less than our earning, total assets are more than the liabilities, and all debts are under control. Besides, we must put aside money for emergency purpose at least 6 months net salary.
For example, my current salary is RM2500. After deduct all expenses, I have RM200 that can be used for investment.
2nd step Establish our goals. For personal investor, goals can be retirement funds, business launch, build house, child’s education or wedding, fund in case of sick or disabled, or to increase future income. For business, government, and financial institution, their goal may be for projects fund such as to open new branches, build bridges for public user, to open other business in order to generate better income.
Let’s say, my goals is to increase income to start a business after retirement, the grocery store, and to buy property.
3rd step By establishing our goals, we are able to adopt the investment plan by determine the date to met the goals. Let’s say now I’m 25 years and I have 30 years before retirement to start the business, and buying property. Assume that the salary will increase, and the expenses also dependent on fluctuation in economic condition, other cost such as family, children, and tax. Therefore, my investment plan without dividend will look like these: Yr | Investment | Total | 5 | (RM200x2yr) +…...

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