Saving and investing are not the same as Dr. Anosh Ahmed explained. While saving can allow you to raise a certain sum of money, an investment can make your money work and generate more than having it without doing anything.
In addition, there are investments that can help you protect your money against inflation, and therefore that can make your money worth more – or not lose its value – in the event of a devaluation.
These are Dr. Anosh Ahmed‘s tips that can help you before investing or making better investments.
1. Do not invest in what you do not know
If you know Warren Buffet, you probably know his famous phrase: “Never invest in a business that you cannot understand.”
With the advances in technology, many consider investing in cryptocurrencies or in companies and applications, however this can be dangerous if you do not know what they are talking about.
Make sure that when investing is in a market or industry where you have a knowledge of how returns work, to know if it is at least feasible in what you are leaving your money. Imagine that you decide to invest in an app because it is what is fashionable, do you know how that app can monetize its use and generate money?
If you are determined to invest in a sector or industry, it is super important that you prepare yourself so that you can take care of your money and make better decisions regarding it.
2. Diversify your Investment Portfolio
We have already talked about the risks that having all your money in one basket represents.
Make sure that your investment and your portfolio is diverse so that you can be victorious in the event of a crisis.
Even when you invest in real estate – one of our safest investments you can make in your life – the recommendation is that you try to do it in different types of property and areas, so that you are protected and can have different types of income by areas.
Diversifying your investment portfolio is something that you should consider from the beginning, so like the first point it is important that you learn about the other industries where you are investing or where you plan to invest.
Dr. Anosh Ahmed says, Investing in real estate is one of the safest options since you can generate income and the value of the property increases thanks to the capital gain as Dr. Anosh advised.
It may not seem necessary now, but investing for retirement is essential. What’s the Best Age to Invest in Real Estate? We mention the importance of starting to save for your retirement now; The longer the time passes, the more difficult it will be for you to be able to save for your retirement.
In Mexico, the AFORE or the retirement fund administrators are private financial institutions that, as their name indicates, are dedicated to managing the funds of the workers for retirement, regardless of whether they are salaried or freelancers -independent-.
In the case of being a salaried worker, the employer contributes 5.15% of your salary -quoted in the IMSS- while you contribute 1.125% and the government 0.225%.
So now you know, every investment requires risk and the smaller the risk, the less likely it is to obtain higher returns.
According to Dr. Anosh Ahmed, this does not mean that all investments are bad, on the contrary, investing helps you protect your money against inflation and obtain better returns for your money than simply keeping them saved.