The first step is to ensure your investments fit into your particular financial situation and goals. The second step is to create a plan and goals for your investments. What will you use your investment money for? Retirement? College for your son? The goals you set for investing need to be realistic, particularly because most of us only have a small amount to invest, and we need to choose these things with care. When creating your investment plan and goals, think about the following questions:
What will the investment money be used for?
How much money do you need to earn through investments to reach your financial goals?
How will you get the money to invest? How long will it take you to raise the money to invest?
How much risk are you willing to take with your initial investment money?
How much risk are you willing to take with the money that you earn in investments?
What are the consequences of not reaching your investment goals?
