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Sunday, February 15, 2009

Warning Signs You Shouldn't Invest?

By M Taylor

Before you decide to invest in any kind of market, you really need to take a long look at your current financial situation. Investing in the future is a good thing; however, if your current financial status is less than ideal, it could be the worst mistake you'll ever make.

The easiest way to do this is to pull your current credit report. It's extremely important to get a credit report at least once a year, and it's very important to read your credit report and find out what's on it, so that you can get all the negative items on your credit report prior to starting to invest in the markets. For instance, .if you saved up $25,000 that you want to invest, you are better off cleaning up the credit first then taking what's left and investing that in the markets.

Before I share with you the idea that you should invest your windfall, there are a few things that you should consider. You really need to take a long look at your current financial situation.

Warning! If you go with the faulty logic that all you need to know is that you should try and make an investment in your future, you might as well drive books down the driveway. Yep, drive books and watch pumpkins fly. If you go for this hype without clearing up bad or potentially bad situations in the present, you might as well start "Chunkin Those Pumpkins", because you are going to be about as successful long-term as tossing a baby grand piano across the room.

If you can't do anything else, roll the money from the high interest credit card on to one with lower interest, and refinance high interest loans with loans that are at lower interest rates. It may be in your best interest to apply some of your investment money into paying down your loans and credit cards, but in the long run, you will see that this is the wisest course of action after reviewing all of your expenses and payouts.

Get yourself into good financial shape and then you can work towards improving your finance position. Investing doesn't make sense if your bank balance is shaky, or if you're living from paycheck to paycheck and paying bills is a constant scramble. Making sure that you pay your monthly bills, instead of investing your money would make better sense.

While you work towards financial independence, you could take the time to educate yourself on the various types of investments that are available.

Here's a secret: Investing doesn't make sense if your bank balance is shaky to disastrous, if your monthly bills are a constant struggle and you feel like you can't breathe out without hearing from a collection agency. Investing your dollars in rectifying your adverse financial issues first makes better sense and you'll sleep better at night. Progressing towards financial solvency will also give you time to educate yourself on the different types of investments available. In this way, when you found yourself financially sound once again, you will be prepared to make good investments for your future.

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