All of us may not necessarily dream of becoming millionaires or billionaires. But we all dream of a secure financial future where we don’t have to worry about each expense we make, no matter how essential. Often most of us we work and work with no rosy future on the horizon. So what are we doing wrong?

One reason why we don’t accumulate wealth is we don’t save in a systematic manner and thereafter invest that saving wisely enough. The golden rule of becoming wealthy says that a part of what you make must be yours. The rest can then be spent on essential expenses and other necessities.

But maybe you already knew of the golden rule. You have been saving for a year or two and you have enough money in your savings account to do something with it. What do you do now?

The logical step is investment. It doesn’t have to be too big or too risky. Something small and safe, which gives you a feel of how investments are made.  This too would work

Investment is a complicated field

Investment is a complicated field. But that does not mean you need in-depth knowledge of each kind of investment to actually make an investment. But you should definitely educate yourself about the basics and be aware of where you are putting your money.

It is advised that you invest in only what you understand. Even if you have the slightest doubt about how your money is going to be used, you should probably not invest. Don’t invest because someone told you to, invest because you understand. Following a herd mentality will only leave you with losses.

External advice

 There will always be well meaning people around you to give you advice. However, all free advice should be taken with a pinch of salt. Listen to everybody, but do what you feel is right. It is your money that you are investing, and your expectations from your investments are going to be different from other people’s goals. Different people have different risk tolerances; therefore no person investing has the same mindset. As mentioned earlier, know where you are putting your money, the risks associated with it and have a back up plan ready.

Investment options

All this careful consideration will leave you with the one important question, where to invest? There are numerous options such as mutual funds, stocks, index funds, real estate and even businesses. Whatever little knowledge you have of this field will be helpful while making your investment.

Always make sure that all your eggs are not placed in one basket, and you have diversified enough to not suffer major losses from one investment. Invest in things that are more likely to appreciate over time.

Always invest smartly

Financial advisors might be good options to learn about the various options available to you. However, most financial advisors will charge you a fee before making an investment on behalf of you. Financial advisors that only charge a fee on what you make on an investment are an ideal choice.

You can also hire an accountant to assist you with day to day dealings and other administrative tasks, but you should be aware of all the important basics. The purpose of saving money is to make money. And money makes more money.