Many first time investors think that they should invest all of their savings. This isnt necessarily true. To determine how much money you should invest, you must first determine how much you actually can afford to invest, and what your financial goals are.
First, lets take a look at how much money you can currently afford to invest. Do you have savings that you can use? If so, great! However, you dont 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 readily accessible savings account dont invest that money! Dont invest any money that you may need to lay your hands on in a hurry in the future.
So, begin by determining how much of your savings should remain in your savings account, and how much can be used for investments. Unless you have funds from another source, such as an inheritance that youve recently received, this will probably be all that you currently have to invest.
Next, determine how much you can add to your investments in the future. If you are employed, you will continue to receive an income, and you can...
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