While investing, it is very know who you are?
There are certain parameters which can put you in the right category of investor.
Those parameters can be prioritized as below,
Money: Money is the foremost consideration while looking forward to any kind of investment. It helps you identify your risk appetite.
Every investment comes with a certain amount of risk attached to it, therefore knowing your risk appetite is important.
- Rich or Higher class, Middle class, and Lower class are earning based classification of a different set of people used by industry and economist.
- If you belong to the lower class (earning <25,000$ per year) then stay away from the stock market or refrain from buying any funds linked to stocks. Stock markets are very volatile. It may happen, in the beginning, the market is at rocket high, and when you need the money that time market is collapsed.
- Customer = Middle class (earning 25,000$ to 1,20,000$) this class is major mover of economy. These people are the biggest consumer, taxpayer and spend at least 20 years paying loan. People in such class are easy target of investment companies. Which is good for both of them. Because they might not have the knowledge, time and enough money to invest right. So select the right investing partner and don’t invest more than your savings. Savings =/ Investment. Investment has no guaranteed return, whereas savings will at least return you what you deposited.
- Higher class (earning >1,20,000$) this people are real investors. They have financial advisers which let them their money work for them and make them rich. But people middle class should also understand having a financial advisor does not guaranty success. Therefore in such cases, higher class people have bigger risk appetite and right network to come out of worst situations.