Communicated Content – There has been a massive spike in interest for trading and investing in the past few months. Whether this is because the pandemic-triggered market crash made a slew of assets more affordable or because citizens received stimulation checks which they used to invest with is merely speculation.
However, numbers never never lie. The average daily equity trade volume exploded in 2020 from seven billion average daily trades in 2019, to 10.9 billion trades daily in 2020. This trend has since continued well into this year, wherein there are now an average of 14.7 billion equity trades made daily. It’s clear that more people are starting to delve into stock and crypto currency trading. The question to ask now is, are you ready to start investing? Here are some ways to determine if you’re financially mature enough to start investing:
You Have No High-Interest Debts
The truth in any investment is that there will always be inherent risks. This is especially true for cryptocurrency trading. If you have high-interest debts, it would be ill-advised to risk your assets on investments as losing money on a bad investment will significantly affect your ability to pay your debts. Failure to pay your debts will have a lasting effect on your credit score, which will limit your financial choices later on. Invest only after you’ve paid off at least 90% of your high-interest debts.
You Have Emergency Funds
Having an emergency fund enables you to respond to emergencies even after you’ve invested money. While most sites would recommend that you have at least six months worth of money to cover your expenditures, this doesn’t have to be the case if you want to start investing early.
Even a small emergency fund of $2,000 is sufficient, and will allow you to split your earnings between putting more money into your savings while also putting money into long-term investments.
You’ve Taken the Time to Conduct Your Due Diligence
Trading can be a stressful experience. There are many intricacies that investors need to learn, and it’s important to consider the inherent risks associated with trading. The markets are volatile and the value of assets will be erratic. It’s also easy to fall prey to the influence of social media like the investors who bought Dogecoin simply because Elon Musk tweeted about it. Those who invested in Dogecoin subsequently lost a lot of money.
Alternatives to Trading
The good thing about investing is that you aren’t necessarily limited to stock and crypto trading. There are plenty of safer ways to invest. There are a slew of business opportunities and franchises in New York that are much more stable than trading. While it’s true that these investments need a higher investment capital, these investments are far more predictable than trading. Not only this, but you’d also have more control over the outcome of your investment as opposed to being at the mercy of market conditions.
