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Start Investing Early to Achieve Financial Freedom
By Don A 
Do you want to have financial freedom? Many people do and I'm one of them. Financial freedom is great because you can have the freedom to do whatever you want with your life. You can work whatever job you want at whatever time you want. You can even stop working if you want to. You don't work because you have to. Instead, you work because you choose to.
To achieve financial freedom, one important thing you should do is learning how to invest. By knowing how to invest you can greatly increase your chance to achieve financial freedom. It can make the difference between living from paycheck to paycheck your entire life and having financial freedom. That's because by investing you will make your money works for you. You won't just let your money sits on the bank doing nothing. Instead, you make it work so that your wealth grows more and more. Eventually, your wealth will reach the point at which you achieve financial freedom.
But knowing how to invest is not enough, you should also start early. The earlier you start, the better you chance to achieve financial freedom. That's because by starting early you will have the compounding effect works for your advantage. Since compounding effect has the potential to grow your wealth exponentially, the more time you have the more growth you can expect. That's why starting early is so important.
You need to start now. Don't wait until the situation is perfect for you to start investing. While waiting for the perfect time, you are actually wasting a lot of time to have the compounding effect works for you. People who start earlier will have been far ahead of you by the time you find the "perfect" time to start investing.
You don't have to start big. Start investing with whatever amount of money you can. Obviously, the more you can invest the better. But the most important thing here is time. Don't let anything get in your way of investing early.
Don writes about investing in his blog Learn to Invest Money.
Article Source: http://EzineArticles.com/?expert=Don_A
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Investment Strategy to Start Investing
By James Leitz
You need a basic investment strategy before you start investing. First, concentrate on asset allocation. Then keep your diversification (balance) on track as the years go by. Here's an example of how to start investing with a sound investment strategy.
Drew decides to start investing, $5000 a year for twenty years. He wants to keep his risk moderate to low, and figures if his money grows at 6% to 7% per year on average that he will have about $200,000 in 20 years.
First, he deals with the asset allocation issue. How does he divide up the $5000 in various investment options? He decides to go with 1/3 in a safe investment that pays interest, 1/3 in bonds to get higher income, and 1/3 in stocks to get growth. This asset allocation makes Drew comfortable because it is a bit conservative and will give his portfolio considerable diversification. If stocks have a rough time of it for a couple of years, he can ride it out while earning income on 2/3 of his money.
Plus, he will invest money in the amount of $5000 a year, and doesn't need to worry about timing the stock market.
Now, here's an important part of Drew's overall investment strategy he does not want to overlook. As the years pass his asset allocation will get off track, since each of his investment options will earn different returns.
For example, let's say that in his first few years he averages 3% a year in his safe investment, 6% in his bonds, and 12% on average yearly in stocks. Drew looks at how much he has in each and sees that more than 1/3 of the total is now in stocks. The other two investment options each represent less than 1/3 of the total.
To get back on track (1/3 in each) his investment strategy requires him to move some money around, from stocks to the other two. In the future he will move money whenever he gets off track to keep the three investment options close to equal in value.
Ignoring your investments is poor money management. Drew does not want to just let things ride because he does not want to risk having much more than 1/3 of his money invested in stocks. At the same time, he does not want to have much less than 1/3 invested there either, because he needs some growth in order to average 6% to 7% overall in his investment portfolio.
Drew has made a financial commitment to himself to invest money. The only remaining problem is that he does not know how to pick stocks and bonds to invest in. Mutual funds are the simplest solution here. This way he has the advantage of professional money management and diversification within each of his investment options.
Very simply, he splits his money three ways: a money market fund, bond funds, and stock funds.
If Drew decides to get more aggressive or conservative along the way he can change his asset allocation to reflect this. Then he continues his basic investment strategy of keeping his new allocation on track whenever it gets out of line.
A retired financial planner, James Leitz has an MBA (finance) and 35 years of investing experience. For 20 years he advised individual investors, working directly with them helping them to reach their financial goals.
Jim is the author of a complete investor guide, Invest Informed, designed for average investors or would-be investors of all levels of financial background and experience. To learn more about investments and investing and his new financial guide go to http://www.investinformed.com.
