Welcome to Safe Investing Part 1
1. Have a Plan
The old cliché is true. Nobody plans to fail, but many fail to plan. Having a comprehensive financial plan in place, understanding your goals, and proactively managing your investments are never bad ideas.
2. Have a Cash Cushion
The emergency fund is always a classic fashion. Like an insurance policy, you hope you never need to use it, but if you do, its there when you need it. (To learn how, check out Why You Absolutely Need An Emergency Fund.)
3. Live Below Your Means
If you make a habit of spending less that you earn, it will be much easier to survive if your earnings decline. Losing your job is never fun, but losing your house and car too make the situation significantly worse.
4. Nothing is Risk Free
Even money market funds can be problematic. Don’t even put money in an investment, even it is being sold to you by your best friend, with the idea that there is no way you can lose money. Bernie Madoff’s friends learned that lesson the hard way.
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Also, be sure to join us for part 2 later this week.