subject: Sustainable Investing - How Much Money Should You Invest? [print this page] Numerous first-time investors think that they should invest all of their savings. This isn't always correct. To determine how much money you ought to invest, you should first figure out how much you really can afford to invest, and what your financial objectives are.
Initially, let's examine at how much money you can currently afford to invest. Do you have savings that you simply can use? If so, great! However, you do not want to cut yourself short when you tie your money up in an investment. What were your savings originally for?
It is important to keep three to six months of living expenses in a conveniently accessible savings account - don't invest that cash! Don't invest any money that you may need to lay your hands on in a rush in the future.
So, start by figuring out how much of your savings should stay in your savings account, and how much can be used for investments. Unless you have funds from an additional source, for example an inheritance that you have recently received, this will most likely be all that you currently have to invest.
Next, figure out how much you can add to your investments in the future. If you're employed, you will continue to receive an income, and you can prepare to use a portion of that income to create your investment portfolio over time. Talk to a qualified financial planner to set up a budget and determine how much of your future income you will be able to invest.
With the assistance of a financial planner, you could be sure that you aren't investing much more than you should - or less than you should so that you can achieve your investment goals.
For numerous types of investments, a certain initial investment amount will probably be required. Hopefully, you have done your research, and you've found an investment that will prove to be sound. If this is the case, you probably already know what the required initial investment is.
If the money that you have available for investments does not meet the needed initial investment, you may have to look at other investments. Never borrow money to invest, and in no way use money that you have not set aside for investing!
