Entrepreneurs have drive. Entrepreneurs are competitive. And while you may not always feel like it, simply by starting your own business, you have done something that most people won’t do in their lifetime. It’s worth a momentary self-congratulation, but only for a moment, because there’s a lot of work to do from here on out.
Now that your business is running, it’s important to both keep improving it, and to make sure that your own personal finances stay afloat in the meantime.
It’s not uncommon for entrepreneurs to go bankrupt, along with the business that they started. With well more than half of all new businesses shuttering within a year, it’s not unlikely that you will experience some personal financial trouble in the next little while. It’s possible to insulate yourself from your business’s financial situation, and you should do so.
But that’s not the topic of this post. We’re going to examine the best way to deal with tomorrow, not today, through investment.
Investing your hard-earned money
Investing is how people take the money they have and make it grow. It’s a financial method over and above the money you’re making from your career. Many new entrepreneurs don’t have the free time or attention to give much thought to investment, but it’s vital that you prepare nonetheless.
Here is a couple of ways.
Index funds
Traditional investment methods like index mutual funds, using IRAs, works just about every time. For those unfamiliar, index mutual funds are a great investment method for people who don’t have a lot of free time to devote to their portfolios. If this sounds like you, you should learn more.
The “index” in the name indicates a list of the most successful stocks in the stock market at any given time. Your IMF will give you little pieces of each of these stocks, so as the market grows, so does your portfolio. You never even have to think about it if you don’t want to. Because the big markets tend to grow much more often than they fall, your money can grow many times over, over the course of decades and with regular contributions.
Currencies
But you may not be the kind of person who can wait for a long-maturing fund. For people like you (the competitive type), there’s Forex trading. Forex is much more fast-paced than slow growing IMFs.
While both have a place in a well-chosen portfolio, Forex is suited for the hands-on investor. It’s based on trading upon currency values. Currency pairs are listed through any number of online Forex brokers. What you have to decide is how you think their values will change, relative to one another, over a time period which you select.
If, at the end of the time period, values have changed according to your prediction, then you will get dividends according to how much the values changed in your given direction. Not only is this fast paced, it is an investment that is based on skill and observation. Unlike IMFs, which are basically passive, the more you learn about your chosen currencies, the more you are likely to receive in dividends.
Takeaway
Eventually, all is coming back to your knowledge in any investment vehicles that you choose. Knowledge is power, indeed – acquire it from the right sources, and put what you’ve learned into practice, hands-on. That’s probably the best route to take.