If you have confidence and manage your risk well, you can increase the value of your savings. You already make the same critical judgments that investors make. When you buy something, you compare prices and values, you do your research, you talk to friends, you make judgments, investing is the same. 

You are already making the same thought process as an investor on Wall Street. Kind of. You look at prices, values and risks and decide whether it’s a good product to buy or not. Take those street skills and apply them to the investing world.

Don’t let investing intimidate you. 

There are a lot of very smart people working on Wall Street making wealthy people and companies wealthier. The interesting thing is that nobody gets it right 100% of the time. Investors who beat the market for five years straight, can miss the boat completely for the next five. 

The single most important concept any investor must understand is risk. The higher the risk the higher the reward. The lower the risk the lower the reward. Never risk money you cannot afford to lose. When you sign up for a brokerage account or with an investment advisor, they must determine your risk profile. Meaning, they figure out where you sit on the risk scale. It’s determined in part by your financial status, your age, as well as your self-reported openness to risk.

The value for any investment is not the price the investor pays. 

Value is a measure of potential. The price is the amount the investor pays at any given time. Value is the intrinsic measure an investor places on an investment, If the investor sees value, the current price will seem like a bargain. If little value is seen, the price will be seen as expensive. For any investment, there’ll be a wide range of values and only in hindsight, will anybody know the true value of that investment.

In order to invest, every investor needs to weigh risk against value.

Doing this over time is what builds confidence. If you’re confident about your decisions, you stand a much better chance of making successful decisions. To be a confident investor and therefore a good investor, commit to learning, know your limits, gauge your tolerance for risk, make strong decisions and stand by them. 

Investing is based on stoic, educated decisions. Anything outside of that is speculation or gambling.

Even the experts get it wrong. 

Be Careful in the advice you buy. Be even more careful with the advice you don’t solicit. In the world of investing everyone seems to have an opinion one way or another and everyone seems to be an expert. But nobody really knows until after it happens. Investing is a lifelong journey and one everyone should strive for. Having your money work for you is the only way to grow income to wealth.

Don’t worry, you can do this. 

As far as anyone knows, no one was born with the knowledge to do this. It was learned over time. Risk aversion, value identification and confidence are not static skill sets. The more you understand about yourself and the market, the better you will become at it