These days, money sitting in a bank account doesn’t do much for you in the long-term. It might help you to feel more secure when you’re worried about your career, or when you’re planning for long-term purchases. However, your savings won’t build your wealth portfolio for the years to come, or give you an incredible retirement pot, unless you constantly add to them. The lack of interest and rewards for savers in the current landscape is one of the main reasons why people choose to invest their money. When you learn how to short stocks and build a portfolio, you can see your cash grow exponentially. However, there are a few things you should do before you continue down this route.
Address Savings and Debt
You don’t necessarily need to be a millionaire to get involved with the stock exchange these days. Things like online trading and brokers have made it easier for anyone to get started. However, that doesn’t mean that you don’t need to be in a position where you can take some risks with your cash. Since placing your money into trades puts you at risk of losing it, it’s best to make sure that you’re in a secure space first. Make sure that your loans and debts are under control, as the cost of the interest that you pay there is likely to outweigh any money you earn from many assets to begin with.
Ideally, you’ll want to be completely debt-free before you begin working on your portfolio. Another thing that you’ll need to think about is your savings. Although buying securities and shares can give you more spare cash to fall back on in the future, you still need a safety blanket for right now. The generally accepted rule suggests that you should have about three months’ worth of your salary held back before you start to invest. You can place that cash into a high-interest savings account to help.
Make Sure Your Protected
One final item to cross off your list to do before you jump into the stock market, is think about how you can protect yourself. For instance, are you defended from any issues that might happen if you had to stop working for an extended period of time, because of an illness? You might need income protection if you’re worried about this.
On the other hand, there are plenty of other insurance components that you might need to look into too. For instance, critical illness and life insurance cover can be very valuable. You might also have the option to take out extra forms of protection if you have dependents or a mortgage to think about. Only once you feel thoroughly well protected can you think about looking for a broker that will help you to dive head-first into a new strategy for building wealth. Although it’s tempting to jump in straight away as soon as you find something that you feel is beneficial for your future, having the support in place is critical.