You can’t just become a better investor overnight. To truly succeed at the art of investing, you have to work at it day and night to ensure that you are pushing your money into the right markets at the right times.
To become a better investor, you should be highly logical; you must be incredibly rational, and you have to be willing to put the following pieces of advice into practice.
Know your financial situation
Knowing how much money you have to play with is the first thing you must do in your bid to become a better investor. If you don’t know the ins and outs of your financial situation, you could end up investing way more money than you can actually afford to. Should you allow for this kind of reckless investing to carry on for too long, you will no doubt land yourself in serious amounts of debt sooner rather than later.
When getting to grips with your financial situation, the first thing that you should do is make use of Paycheck Guru’s paycheck calculator. This tool will show you everything there is to know about your salary. It will inform you of how much tax is set to be deducted from your wage, it will tell you how much money you owe to the likes of FICA and Medicare, and ultimately it will leave you with the sum of money that is actually going to go into your bank account at the end of the month. Once you are fully aware of the exact amount of this sum, you can then start making plans for how you’re going to invest it.
Stop moving your money around
If you’re to become a serious investor, you must stop moving your money around. Treat your cash like soap; the more you handle it, the less you have of it.
Moving your money around from account to account will result in you having to pay more in transaction and tax costs, meaning the more you move it, the less you will have to invest with in the long run. To avoid this plight, you should resolve only ever to move your money when the transaction is part of an investment plan. Stop making knee-jerk reactions to changing markets, and instead put plans into place well in advance. That way, you’ll only ever be incurring transaction and tax costs as and when it’s absolutely necessary.
It’s really quite simple: if you want more money to invest with, stop paying the taxman more than you have to! If you look hard enough, there will always be a bursary or a refund out there that will allow you to bring your tax bill down.
One of the best ways to maximize your savings in this instance, especially if you’re a property investor, is to make use of tax-deductible items. As an investor in real estate, you can claim tax relief on the following things:
- General maintenance and repair costs
- Utility bills (if you pay them yourself)
- Service costs (cleaners, gardeners, etc.)
- Agency fees