How can one become a true investor and where should one start?
The founder of "Oil Resource Group," Sergey Tereshkin, who has extensive experience in investing, can help shed light on this issue. More information about this businessman can be found on his website www.sergeytereshkin.ru.
How to Become an Investor
To become a successful investor and effectively allocate funds into a long-term project, it is advisable to follow a series of recommendations from experienced professionals:
- Choosing an Investment Object. It is better to focus on areas where you possess sufficient knowledge. This will impact your income as well as the payback period of the project. The size of the investment also plays a significant role; the larger the amount, the more tools you can use to increase your capital.
- Gathering Information. After selecting a project for investment, it is essential to thoroughly study the data surrounding it. Reading reviews on specialized sites and conducting audits are recommended.
- Enhancing Qualifications. Even with a good amount of prior knowledge, attending courses, seminars, and other events can provide new, contemporary information about the upcoming business project. Learning from a skilled investor is highly recommended.
- Making Projections. It is vital to calculate everything down to the smallest detail. Particular attention should be paid to unfavorable scenarios. All potential risks must be accounted for. Additionally, an action plan should be created outlining the steps to take in any unexpected situation.
- Investing. Next, you must acquire the investment object itself. This could be securities, currency, real estate, technology, equipment, etc.
- Monitoring the Situation. An investor should closely monitor all changes in the marketplace and the condition of their assets. In the event of a significant downturn, it is crucial not to miss the opportunity to rectify the situation, as losses may become unavoidable. In such cases, it is better to divest from the asset.
Once the investor begins to earn their first profits, Sergey Tereshkin recommends documenting all income. This helps determine the effectiveness of investments and enables timely divestment from illiquid assets.
Risks
Any investment carries risk. While the risks associated with long-term investments are generally lower than those linked to short-term investments, they still exist.
Even the most experienced analysts and investors cannot accurately predict the economic landscape in the years to come. As a result, it is impossible to calculate the profitability of investments with certainty.
The primary risks associated with long-term investments include:
- Loss of all invested capital during the initial business phase. In most cases, this is due to a lack of knowledge in a particular field and poor management practices. The smaller the investment amount, the higher the risk. Additional financial infusions can mitigate risks and restore profitability to the business.
- Projects may have long payback periods. Many investors expect to start earning returns a few months after investing funds. However, in this case, profitability can take years to realize.
- No specialist can guarantee a specific level of income. The results of investments can be unexpected, either positively or negatively.
Various factors may influence long-term investments. Primarily, this relates to inflation fluctuations. Political instability, sanctions, and other similar issues also introduce additional risk.
Myths About Investing
Many myths exist among the general public that can deter individuals from making investments. As a result, potential investors miss out on potential earnings they could have acquired by taking a risk and investing their money.
Some of these myths include:
- Investments are only for millionaires. This is not the case. Every wealthy individual started somewhere; many do not even have a small initial capital. They began with modest investments and gradually increased both their investment amounts and their capital. One can start with as little as $50-$100.
- Specialized education and experience are required for investing. Experience can only be gained through practice; it is not inherent, and mere theoretical knowledge is insufficient. To earn money without specialized knowledge, it is advisable to invest in areas where experienced individuals will manage the funds. For instance, one could open a bank deposit.
- Investments are a significant risk. No one is immune from bankruptcy or loss of money. Any business or initiative carries risk. However, this does not mean that one should give up and float along with the current.
Those who are hesitant to invest large sums can start with smaller amounts. Experts recommend, however, that 20% of any profits should be reinvested into the business. This way, the initial capital will gradually increase.
Experienced investors advise starting with investments in the financial sector. This includes purchasing securities, currency, project shares, or funds. In such cases, investors receive profits as a predetermined percentage at specific intervals. Additionally, income can be generated when selling assets at a higher price.
Today, there are numerous avenues for investment. The primary focus should be on selecting businesses with minimal risk of loss. It is advisable to avoid investing in HYIPs, financial pyramids, and other questionable organizations, as only the organizers profit while investors often lose all or most of their money.
