How much to save for online trading is a question often asked by new investors. How much capital can I invest is a question that the investor has to put to himself/herself before putting a finger in this really hot pie!
Common notion among new investors
Most of the new investors start off thinking they would invest all of the savings that they have made till date but this is a sure dangerous thing to do; what if you have made a bad investment and lost your money? All your savings would get wiped out in one stroke; dreadful isn’t it?
Determining how much to save for online trading
So much depends upon the capacity of the investor to determine how much to save for online trading. Financial goals and affordability of the investor are very crucial for arriving at a possible figure. Any investor would no doubt wish to invest a lot of money in this but it should be in accordance to his/her earnings and monthly commitments.
Having previous savings is really wonderful but you must remember not to tie up all of your savings in investments, you need to keep some liquid cash for emergencies.
While determining how much to save for online trading remember to keep a reserve of three to six months living expenses in your saving account which can be accessed readily; this money at any cost should not be touched even for investment sake.
But it is a very different issue if you have come into an inheritance or won a lottery and have ample funds to invest.
It is best to take help from a qualified financial planner to make a budget plan for you and determine how much you can save for online trading.
A good financial planner will ensure that you are not investing more than you can save taking into consideration all of your monthly expenditure and other financial commitments you have.
Job holders are paid a fixed monthly salary so it is much easier to plan on how much percentage can be saved for investment purpose. And you can add to your investments in future too for building an investment portfolio later on.
For most investments a certain initial capital investment is required and if you have done your homework you would have found investments that are sound. And if you have done your research you must be in the know of how much of initial investment is required and if your savings don’t match up to this amount it is better to look at alternate investments. Remember never to borrow to invest and never to invest money that you have set aside for living expenses or other financial commitments such as EMIs, etc.
Finally it can be summed up as how much to save for online trading matters much more than how you wish to invest this money.