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Always invest money that you can afford to lose

One of the first rules when investing successfully in the stock market (and this is true in any stock markets over the world) is to invest money that you can afford to lose. This may does not sound really exciting. This is definitely not a glamorous rule. But do not panic yet and let’s first review what we mean by “money that you can afford to lose”? We are talking about money that you would need in case of an emergency.

While the size of your emergency fund will vary depending on your lifestyle, monthly costs, income, and dependent, the rule of thumb is to put away at least three to six months' worth of expenses.

You always need to establish savings before starting investing. You need to be able to meet your responsibilities at all time. Also, once you start investing, one of your primary goal should be to avoid major losses. How to do that? By taking advices from professionals, by avoid being greedy and by being patient. Why it’s not as bad as it sounds after all? Because if you seek advice of qualified advisors, your probability of losing all of your investment becomes incredibly low. It is of course possible to lose money on the stock markets (or on any other type of investment including real estate).It is also possible that you lose up to let’s say 75% of your initial investment in a short period of time. However, (especially if you invest for the long-term) losing everything is extremely unlikely or even almost impossible.

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