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How to find out if you're ready to start investing in shares

by , 27 January 2016

If you want to start investing, you'll need to have some cash to put to work on the stock market.

So how can you find out if you have enough money to start investing?

Read on to find out…

Working out if you have the money to invest in shares

There are a few things you need to consider when deciding whether or not you’re going to start investing in shares.

You’ll need to have a lump sum, no less than R10,000, but ideally around R30,000. And you need to be prepared to put this money into the stock market for the long-term.

If you’re going to need this money in the short-term to medium-term, don’t invest it. The stock market has its ups and downs, and this means you risk losing money if you want to sell out of positions quickly.

The key to investing successfully is time in the market.

What if you don’t have a lump sum to invest in shares?

If you don’t have a lump sum to invest, you have two options…

You can start to save money each month to put towards investing. Or you can explore other investment options that don’t require a large lump sum investment.

You could look to invest in unit trusts or exchange traded funds (ETFs) instead. These funds allow you to invest from as little as R200 or R300on a monthly basis.

Investing this way allows you to build up your holdings slowly. And it also has its advantages. You can take advantages of ups and downs in prices, averaging out your entry price.

So there you have it. How to find out if you’re ready to start investing in shares.

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How to find out if you're ready to start investing in shares
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