2013年1月6日星期日

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In other articles in this series I've made the point that you need to be disciplined and keep good records of all your online investments as this will ensure things are set up correctly from the start. One of the other things you need to do especially when starting out is to recoup your initial investment as quickly as possible. The Greed pandora charms cheap When people discover the higher returns that are possible with many online investing programmes they often throw caution to the wind and get carried away by the riches they envisage if they invest a relatively small sum, compound all the returns and wait until it becomes a sizable sum. A great idea in theory but not so good in practice. However attractive online investing programmes appear you need to bear in mind that some fail and you could lose your money. This creates anger and resentment and can deter you from further investing. Plan to succeed One way to mitigate the risk of loss is to plan to retrieve your initial investment as soon as possible. Let's take a simple example. Assume that you invest in a programme that pays 2% a day and that you invest $100. So simple maths tells us that we would receive a return of $2 per day and that it would take 50 days to recoup our original $100 investment. After the initial investment is recouped you are then gaining on what has come to be known as OPM or Other People's Money. At this stage you could make the decision to compound earnings if that is an option and your funds would then grow more quickly. Taking the above example again and assuming we are able to compound the first day our account would grow by $2 to $102, écouteurs beats by dre next day it would grow by $2.04 to $104.04. Whilst this doesn't seem a lot you can soon work out that daily increases become significant as the account increases. Don't get carried away Assuming you get to the stage where you can compound then it is a good idea to pay yourself out of your earnings on a regular basis. This ensures you are profiting from your investment and can still continue to grow your fund. Many people withdraw 50% of their earnings on a regular basis which means that the remaining 50% remains to aid compounding. The fact that you withdraw some of your earnings shows that you have control of your account and the money can then be used for personal treats or perhaps re-invested in a new programme that will assist in your aim to diversify. Personal Risk Tolerance Personally I support the general idea of recouping your initial investment as quickly as you can and if you are just starting out I think it is imperative. However, there may be an argument that says once you have some experience and have a reasonably diverse portfolio that recouping your first deposit is not always that critical. It might be that you invest say $100 into a new opportunity on the basis that you have made the decision to leave the money there and compound immediately. You take this view on the basis that this money is a wholly discretionary investment and that if the programme fails you will not beat yourself up about it but move on to the next. This is another very personal decision and I'm sure customize beats by dre people have widely differing views as to how much they would want to risk in this way. As you start out you should always look to recoup the initial amount but your views may change as time goes by.

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