In a constantly changing economic context like Argentina’s, investing is an obligation. The situation we face requires professional attention not only for the detection of investment opportunities, but mainly for the preservation of capital.
Before launching into the world of investments, it is essential to create a roadmap to guide us. What stage are we in? Are we ready to invest?
Below is a roadmap for those looking to start investing intelligently and responsibly.
1. Generate a monthly surplus
Although it seems obvious, the first task is to prepare a budget and determine if we have a monthly surplus or deficit in our economy. To do this, it is best to take our cashflow down to earth detailing income and expenses (flow).
It is important to prioritize strengthening our income by investing in personal/professional development, even before entering the financial markets. True growth comes from strategic planning focused on personal expansion, rather than simply reducing expenses.
On the other hand, it is necessary to analyze our assets and liabilities (the accumulated stock). If we own a large fortune or inherit it, we probably won’t be as concerned about the flow in the short term, but this is not usually the case for the vast majority.
2. Minimize debt
The second step of good financial planning is to reduce debt (if any). Debts, especially those with high interest, such as credit cards or personal loans, can be a burden that limits our ability to save and invest. The key is to understand the opportunity cost, can I obtain better returns – with minimal risk – than the cost of debt?
The ideal is to prioritize paying debts with higher interest. In the long term, minimizing debt allows us to have more resources for investment, thus improving our financial stability.
3. Plan and accumulate reserves
The third step is to plan our reserves, which involves analyzing our needs and defining priorities, taking into account both unforeseen and planned expenses that may arise over time.
The accumulation of reserves offers us financial security, allowing us to face unexpected situations without compromising our finances and achieve important goals without having to go into debt. They also prevent us from having to redeem investments before their recommended holding time. It allows us to respect the horizon of the different investments.
4. Invest savings for the long term
Investment is a additional step on the path to good financial planning. Once we secure our basic finances – generating a monthly surplus, minimizing debt and accumulating reserves – we can allocate part of our savings to long-term investment.
It is essential to remember that investing does not replace other key stages of financial planning. It is not a shortcut or an immediate solution, but a complement that can enhance our assets once we lay the foundations for our financial health.
At Max Capital, we consider that financial education is one of the fundamental pillars for people’s economic development.
Therefore, we invest resources and efforts in financial education programs that allow each person to understand the risks and opportunities of the current financial market, while we offer personal finance training to various companies.
Commercial Director of Max Capital.
Source: Ambito
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