If you are about to take the leap from demo trading to real trading, then you need the right game plan. After all, when you are playing with real money there are real consequences. You don’t want to miss key opportunities to grow your wealth or fall into investing traps that sink your investments either. So, before you do away with paper trading and get into the game, here is what you should know to have the best chance of success:
Start with the End in Mind
When embarking on any journey, you need to know your target destination. Otherwise, you could get lost along the way or not even know you’re going off course. In no other endeavor is this as important as with investing. As an investor, your ability to visualize where you want to end up is crucial. This should take a few forms. First, understand the exact amount of cash you want to have coming in every month. Secondly, determine the cash and cash-like reserves you want on-hand at any given moment (after expenses). Thirdly, determine which classes of assets will best help you get there.
Stay Organized
A lot of investors start out with big plans, but they get off track somewhere along the way. The reason is that they lose their discipline. This is easy to do if you don’t have some kind of organizational strategy in place. In your mind, your files, your phone, and everything else, your finances should be a separate category. Do not make emotional decisions with your money. This is about your freedom and taking care of your dreams and your family. Stay firmly organized with all matters related to finances.
Hire Professionals
It might be tempting to go it alone. Perhaps you’ve always been an independent person. Or maybe you like the idea of potentially saving a few dollars by not giving your broker or advisor a cut. However, you should consider that you might need their guidance. You could fail to see upcoming changes in the market. This could cause you to lose a lot more than you would have otherwise. It’s one of the many reasons to hire the pros.
Use the Right Tools
If you want to get more out of your money, you need the right tools. This includes things like software, websites, and apps. They allow you to take more control by having increased access to information. In investing, knowledge truly is power. However, it is even more than that. It is a way to know how the markets are going to change. You can position yourself for a massive influx of wealth if you have the right resources. It is a gift you should always give yourself.
Conduct Regular Reviews
Just as planning your course is important, so is reviewing your results. The more you review, the better you are at making sure you are still on target. If you only do reviews once per year, that might not be enough. Once per quarter is a minimum. However, every month or even every week would be a better frequency.
