Investments: How Do You Know Where and When To Spend Your Money?


As the years go on, and technology and knowledge become more reliable and available, there is a distinct word that almost always comes up: investments. When this word is used, it is usually referring to how to spend your money or your portfolio, and what is and is not a good choice for you. This is a good concept, but often the more knowledge we receive on the subject, the more confused we can become. The choice to invest is certainly up to you, but it is easy to become overwhelmed and simply invest somewhere you don’t want to, or go to an expert who causes even more confusion. Fortunately, there are a few simple rules to follow when you are looking at making an investment – whether it’s for your retirement, entertainment, or wealth.

The very first rule, and perhaps the most important is this: is this investment worthwhile to you? This may seem like an obvious question, but it is vital to answer it before you invest anywhere. It is simple to invest on compulsion, but perhaps not wise. A very simple example of this would be Amazon Prime. Amazon Prime offers a variety of benefits for the price of $100 annually. If you are a Prime member, you get free, two-day shipping on most items, unlimited Prime video streaming, unlimited Prime music streaming, and monthly, even sometimes weekly, free Kindle books. You also get access to Prime Pantry, which is an easy and convenient way to do general grocery shopping at wholesale prices. Now, you may not think Prime is right for you – perhaps you prefer Netflix to the Prime Instant Video service, or you like Pandora over Prime Music, or perhaps you don’t even order that many things from Amazon, so the two-day shipping isn’t really a benefit. All of these things might be true for you, and if that is the case, that is fine. Invest your money somewhere else; somewhere you can afford to and are comfortable doing. If it’s not worthwhile to you – not only a financial investment, but an emotional investment as well – don’t do it.

The second rule is this: don’t spend money you don’t have. It may sound like a good idea to take out a small loan and invest it into the stock market, but you don’t know for sure when you’ll be able to pay back that loan, if you will be able to, or if you will be able to afford the debt associated with it. Don’t spend money you don’t have, and be sure to practice this. It may take a little time, but it is worth it. After all, it will cost you much less in the long run.

The third rule is simple: if you feel that you are getting scammed, don’t do it. Do not invest your money if your gut is telling you it is a trick. If someone promises you that $250 can turn into $1,000,000 overnight, chances are that they are lying to you, and you have a right to feel off-put and protective of your money. If you aren’t sure, don’t do it. It may seem that waiting and reflecting on it is a bad choice, but it is not. After all, you need to feel as comfortable as you can before investing. Investments may seem hard or complicated, but these simple rules should help you make the choice that is right for you.