The Onset of Any Investment

If you want to be serious in trading, you must look at trading as a business. Before you set up any business, planning is essential. Although tempting, before you pour your hard-earned savings into this venture, the first step is to establish your investment goals and objectives. It is best to have this written down because there will be moments that you will forget your goals and purpose of investing.

Keep your "mission statement" of this business as simple as possible. Each time you feel that you are losing your discipline; this is the time to refer to your goals that you have set.

As a guideline, decide on what you would like to achieve financially. Develop a plan, tactic or method to achieve your goals. The method that you choose or develop must have a proven track record for you to eventually arrive at your destination.

Your mission statement should contain, but not limited, to the below:

- What is your Target Net Worth (set a realistic goal)? - What is your target Monthly Residual Income? - What is your initial investment capital? - How much would you allocate a month from your savings in this new venture? - How much time will you allow for this investment to mature? - How much time per day would you allocate to achieve the above goals? - What type of investment vehicle would you specialize in?

When setting your target net worth, set a goal that is achievable. Of course, it is always in many of our dreams to be a multi-millionaire. Set an initial achievable goal as a stepping stone. Periodically, you can always review and revise your goal. For example, if you currently are starting out with $10,000, you may want to be realistic by setting an initial 3 year goal of $50,000, which would represent a 500% return on investment. After the initial goal has been accomplished, you may then set a bigger goal. If you arrive at this goal before the 3 years is up, you can always review and re-set a new goal. Setting achievable goals will keep you motivated to strive further with your investments.

Investing can be risky no matter how safe it looks. Always use only risk capital for all your investments. Risk capital is money that you can lose without affecting your lifestyle. If you need these funds for your next meal, your kids education, or to pay your house rent (you get the idea), then please refrain yourself from investing. Risk capital should only be a small percentage of your monthly savings. For example, if you currently save $1000 per month, you may want to allocate 20-30% of your monthly savings for investment purpose. It is prudent to be conservative while taking risk. You do not want any bad investment to ruin your current lifestyle.

Establishing the "big picture" before you start trading or investing will provide you a roadmap as a reminder of why you even bother putting your hard-earned money at risk.