Am I financially ready to invest?

Am I financially ready to invest?

Are you considering investing but are still determining if you're financially ready? Senior Savings, Investments & Funds Marketing Manager Karen Deenihan suggests asking yourself the following three questions to help determine your investment readiness.

Question 1: Have you paid off any high-interest loans? It's best to pay off any loans with high-interest rates before investing. By doing so, you'll avoid paying more in interest than you'll gain from investment returns. Clearing your debts will put you in a better position to benefit from any growth in your investments. 

Question 2: Do you have enough money saved up for unexpected emergencies? It's essential to have emergency savings to avoid dipping into your investment money from time to time. Ideally, you should have at least three to six months of living expenses saved up. This way, if you need to use your savings for an emergency, your investment money stays untouched. 

Question 3: Are you prepared to invest your money for at least five years? The longer you invest your money, the more time you give it to ride out any bumps in the market and potentially produce overall growth. Keep in mind that the value of investments can go down and up, and you may get back less than you invested. It would help if you had the confidence to hold onto your investments for the longer term and stick to your financial goals. 

The Results: If you've answered "yes" to all three questions, you may be financially ready to invest. However, suppose you've responded "no" to one or more of these questions. In that case, it may be best to pay off loans, save for emergencies, and establish long-term financial plans before investing.

Want to know more about the difference between saving and investing?  Read our article 

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