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23 Creative Ways to Save Money: DIY Ideas

23-money-saving-tips-how-to-keep-your-finances-on-track

1). Never Invest in Stocks You Don't Fully Understand

If you do not know what you are investing in, stay away. Stock trading is about the company and their products, not how cool of a logo they have. A strong company will always make enough profit to sustain itself (or at least grow). If you have no knowledge about the company, do not invest.

2). Invest In A Company With Long Term Profit Stability

Another important factor to consider is the long term interest of a company. Make sure that you are going into a business where profits will remain for years to come. For example, investing in a start-up company that develops apps for iPhones is probably not the best idea. The market for these types of products fluctuate every day and there is no guarantee that their product will be in demand forever. However, investing in Apple would be a pretty safe choice because even if they don't have demand for their popular products, they will always sell retail devices no matter what.

3). Don't Invest In "A Hot New Thing"

Just because something reaches pandamonium does not mean it's the right thing to invest in. When everyone else jumps on board, do you know why? Either everyone has noticed something you haven't or they are just following the trend set by everyone else. Be wary of companies that are simply riding the wave without having much substance to them (i.e. Groupon). They were swept into popularity by advertising and marketing, but they rely on momentum to attract investors. Investors who buy their stocks now will be stuck with over-inflated stock values for a company that is unlikely to sustain itself in the long run.

4). Don't Get Emotionally Involved

Investing your money is not like investing your emotions; it's about analyzing numbers and using common sense! You wouldn't let yourself buy something just because you want it, so why would you let yourself invest in stocks just because you're "excited" about them? Now this isn't meant to say to completely ignore your emotions. If you really want something and it's in your budget, go ahead and get it! But when it comes to investing money, numbers should rule over emotions.

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5). Understand The Market You Are Investing In

Whether or not we realize it, there is a market for everything. Markets come and markets go sometimes (i.e the housing market) but they always come back with some sort of new twist to them (i.e app stores). While markets may be cyclical, that doesn't mean that they aren't worth investing in; rather it means you must know how they work before putting any real money down. It's like playing poker: you need to understand the game before you bet.

6). Have A Plan For What You Will Do If The Market Turns On You

Odds are that the market will go up eventually, but there are no guarantees. If your stock takes a nose dive due to whatever reason, you need to have an idea for what you'll do with them moving forward. Maybe it's best just to hold off on buying more or maybe it's time to sell. Either way, know exactly what you'll do in this scenario so if/when it happens you won't be left holding stocks with nothing else planned out. This can save you from many future headaches (and heartaches!).

7). Learn From Your Mistakes

At the end of the day, investing is all about learning . If you didn't have investments that lost money or made you lots of it then you are just probably not taking enough risks. Learning from your mistakes will help you grow as an investor and allow you to make more informed decisions for your future (and hopefully future successes) with different stocks. You can also check out this article if you want some tips on how to be a better stock trader.

8). Do Not Invest Money You Cannot Afford To Lose

This is especially important for beginning investors because there's always that temptation to buy every hot new stock that comes along. This is why IPO's cost so much; people are willing to pay ridiculous amounts of money to get in on the ground floor. But it's still not a smart investment if you can't afford to lose it! Even seasoned investors should be careful with what they spend because anything could happen at any time, but this is even more true if you are new and don't understand how the market works yet.

9). Be Open To New Opportunities

The stock market is pretty unpredictable . Sometimes really good companies end up crashing and other times there will be all sorts of hype around a company that ends up going nowhere (i.e Pets.com). Just because one opportunity didn't work out doesn't mean there won't be another successful stock idea right around the corner! And once you find the next big thing , you will be glad you were open to new possibilities.

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10). Remember, It's Only A Hobby!

Above all else, the most important tip for beginning (and experienced) investors is to remember it's only a game ! You are spending money which you worked hard for on stocks that may or may not become profitable. If there's one thing about this hobby it's that things can get really serious really quickly and before you know it your whole life has revolved around whether or not some company will make its projected earnings. Don't let that happen to you. Keep it fun! Remember what first got you interested in investing so many years ago and try to stay true to those roots even as your stock portfolio grows! If it stops being fun, then what's the point?

11). Enjoy the Ride

Investing is a roller coaster of emotions . One day you'll be up $80 and the next you'll be down $70. Don't let these ups and downs deter you; they are just part of the game (which I know was already one of my tips, but I couldn't really think of anything better). You can't win if you don't play , so get out there and make some moves! Remember, investing doesn't have to cost money; you can make an investment in yourself with some great personal finance courses online (i.e Investopedia)!

12). Don't Try To Time The Market

Do research on any company you plan to buy stock in or trade (buy stocks that you intend to sell as soon as possible) and try to stick with companies that have a good chance of doing well. Investing doesn't always go according to plan, but if you pick the right stocks and learn from your mistakes, there's no reason why it can't be a profitable hobby! Of course, make sure you never risk more than you can afford and still remember this is only a game ! If this turns out to not be so much fun anymore, stop immediately.

13). Don't Panic!

Do NOT start panicking when you see your stocks dropping . This is the biggest mistake most people make. Instead of freaking out and selling all their stocks as soon as they drop (even though it doesn't necessarily mean anything because then you will be losing money due to transaction fees), just keep holding on until things turn around or an even better opportunity comes along. Of course, if you really want to try and time the market, there are other tactics but this one has been proven to fail time and time again (and panic can lead to poor decision making which could end up costing more than that initial transaction fee). Remember not to let your emotions get in the way of making smart decisions.

14). Don't Over Do It

This is one of the most common mistakes beginning investors make. They simply get way too excited and buy way too many stocks which only leads to disastrous results! This isn't fun anymore, it's business, so treat it that way . You don't have to be diversified in order to become a good investor but you certainly shouldn't put all your eggs in one basket either. If you find yourself getting carried away with investing then just stop for a second and take a step back to examine what you are doing. Make sure you always keep things balanced depending on how much risk you want to take on. If putting all of your money into any one company scares you, maybe it isn't the right one for your portfolio. If this turns out to not be so much fun anymore, stop immediately. As long as this is something you truly enjoy then keep up the great work! into too many stocks which only leads to disastrous results.

15). Be Patient

The stock market is a marathon, not a sprint ! Keep that in mind when making any type of investment and you won't have to worry about losing money. Never try to buy a stock just because everyone else seems to like it; remember they don't know any more than you do sometimes (even though they might). Just look at all those people who went out and bought internet companies like AOL or Pets.com years ago. These stocks went on to lose most of their value because the companies were not really that great! Instead of following group think, just do your own research and you'll be fine.

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16). Be Smart

Don't outsmart yourself by investing in something you're unfamiliar with (especially if someone is trying to sell you on it). Stick with what you know best or at least make sure you are educated on the product first. Before buying anything read some reviews, watch some videos or anything else that can help give you a better understanding of the company. Not only will this make your decision making process easier but it will also help you understand everything before deciding whether or not to invest . It's always a good idea to learn as much as you can before putting your money on the line.

17). Invest In What You Know

As mentioned previously, stay within your comfort zone and invest in what you know best . That way if anything goes wrong (and it will go wrong at some point) then you'll at least have an understanding of how everything works. This is one of the worst mistakes most people make; they try to put their money into things that they don't even fully understand. If we were talking about gambling here then sure, go ahead and do whatever you want but this is not a game ! It shouldn't be treated as such either! Always make smart decisions when investing and only risk what you can afford to lose. Think about it this way, the longer you are in the market, the better your chance of being successful becomes so focus on sticking with things for at least 5+ years. also know what they're talking about.

18). Research The Company

One of my favorite sayings is " Don't invest in what you don't know ". When making an investment I always research everything there is to know about that company before purchasing any stock. This greatly reduced my chances of buying a losing stock compared to when I first started out. There are some great resources out there like websites and even paid services where you can get information for free. Just make sure you are getting quality information from legitimate sources since there are a lot of "scam" sites out there. If you don't know where to start looking, try using the Yahoo Finance website which provides stock market information on hundreds of companies.

19). Review The Stock's Performance

Right after I buy shares in any company, I always take a look at how their stocks have performed over the past couple weeks or months. If it seems like it is doing poorly then that means either 1 of 2 things is happening: i) The company isn't performing well so people are quickly losing interest and selling off their stocks; ii) There was some recent news about the company (positive or negative) which might have caused an instant drop in price . Either way, this is a great opportunity to buy some cheap shares before things pick up again. Even if you had bought the stock at its peak price, as long as you kept holding for more than a month then you'll be fine. But of course, always make sure the news is legitimate and not some type of hoax or rumor.

20). Don't Be Greedy

Wanting to make money in the stock market quickly is actually one of the worst mistakes you can make when investing . After all, no one wants to put in all this time and work only to find out that their stocks went down or didn't go anywhere in months (or even years). Whenever I see that my stocks are doing badly right after buying them, I hold on to them and wait it out for a couple months or years (depending on the company and how long I plan on holding). If you really want to make money overnight, there are definitely ways of doing this but not in the stock market. It's much smarter and safer just to take your time and let things play out naturally over time rather than letting greed get the best of you.

21). Keep Track Of Your Investments

I always keep track of all my investments through a spreadsheet. Not only does this help me monitor everything but it also reminds me which companies I own shares in so that way I don't accidentally buy more when I already have some. Also good to refer back to to see how the company is doing over time.

22). Diversify Your Portfolio

If you want to spread your risk across multiple investments then consider investing in a Diversified Portfolio . This basically means that all of your money isn't invested into one single company or investment type (stocks, bonds, cash etc.). Instead you split it up between each type and hope that if one goes down, then at least another will be fine (or go up). It's not guaranteed to work every time but it does help reduce some of your risk especially when starting out with little experience like me. The more diversified your portfolio is, the lower the overall amount of risk you are putting yourself into on any given investment.

23). Understand What A Dividend Is

Dividends are basically a company giving back some of their profit to you as the shareholder. In order to qualify for receiving dividends, you must own at least one share in that specific stock before it pays out . So if you're planning on buying stocks, make sure they have a dividend first! The amount received depends on how many shares you own and how much of a percentage is paid out by the company each year. This money can be reinvested into more stocks or cashed out for your pocket.

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