Financial Planning | Good Long Term Investments

Everyone needs to have good financial planning. It's not enough to play this by ear. Remember that it's your and your family's future you are dealing with. Good, comprehensive financial planning is much more than just learning to do stock market investing. It is also about conducting your personal finances well, like doing a budget.

The first thing you should do is to get an advisor. Find one that will help you assess your current situation. Get one that will look over your income and expenses and help you set up a budget that will work for you. The thing you need the most for investing is to save money that you can use as capital. You can't do that without a good budget that is realistic for you.

Once you have a good budget down, you will need to start investing it somewhere. You can start with index funds because they give you a good chance at decent returns over time. These funds track stock market growth in the long term.

Then you need to start looking for stocks if you are going to try to beat the market. This is not recommended unless you are an expert. In fact, experts don't even do this very well.

Stock market investing requires a lot more than just picking random companies. It takes a lot of work and it's really a crap shoot. Even the best investment strategies by very highly paid professionals can't beat the market. So only do this at your own risk with money you can afford to lose.

It takes a lot to find good stocks to invest in. You need to do fundamental analysis like project future dividends and earnings. You also need to know how to do financial statement analysis. Even with skills to do these things, you may still not be successful in investing properly and successfully.

Also, you need to know how to navigate your stock investments through major world events. For example, how can you respond to currencies wars when it flares up among central banks? These are things that are hard to do stock investing for. You can short cut the need to do this by investing in and index fund that tracks the S&P 500 composite index over the long term. But you have to leave it in there for the long term.

That means you can't need the money in the short term. If you need the money to live off of, stocks aren't the best place to put it. Put it in something more conservative like bonds or T-bills. Stocks need to time to ride out volatile periods. If you need the money in 1-5 years, you need to not put it into stocks.

You may want to be more risky and do straight stock market trading. Be my guest, but understand the risks involved. It is true that many people make a lot of money day trading on the stock market. Well, there are even more people that have lost money. So just remember that if you are planning to go into stock trading.

Many people have lost their money stock market trading.  Only trade money you can afford to lose, because you may lose all or most of it.  It's just how it goes in this business.  It's not as attractive as it once was as a method of making money.