Let’s talk about loans first.
Those who are starting to deal with personal finance and investments have a very unusual relationship with loans. Many people want to get rid of loans as quickly as possible, but without important tools for optimizing loans, this is very difficult to do.
And in general, the attitude towards loans among the majority is unequivocally negative, which from the point of view of, for example, professional financiers, is not very correct. Money is money, even borrowed money – it is a tool that you need to know how to use.
I will immediately answer the question from the title of the article, for the impatient.
It is always possible and necessary to invest, at least small amounts. But first, you must definitely figure out your finances.
Everyone considers credit as evil, and investing is a panacea, but this is not entirely true, read our articles and you will learn more about personal finance management, one of the components of which is investing.
To begin with, we can say that a loan is not evil, it is not always a bad thing, but for millions of families it is generally a real chance to live in their own homes.
It’s another matter if the loan that you took out does not allow you to breathe calmly, accumulate a safety cushion, or pay some unexpected expenses. In general, after the minimum payments and loan payments, you do not have any money left at all.
Then it’s worth considering.
What is usually recommended in this situation:
- Try to refinance your loan. Do not confuse restructuring (it is considered a tool for dealing with overdue debts and I think it affects your credit history). I wrote about refinancing in my blog on Instagram, under the heading “Terms”.
- Create at least a small additional source of income – ask for a raise, take a part-time job, including online, improve your qualifications.
If you take at least one of these steps, it will become easier for you with payments. You will have “air”, a space for creating a financial cushion and investing.
To start investing, and I won’t tire of repeating this, be sure to make sure at least:
– you have a pillow – the necessary funds as a financial airbag,
– you invest small amounts in highly reliable instruments.
And this is the minimum checklist for beginners. The most basic mistake newbies make is investing their last money.
And believe me, this is a common story, I talked with hundreds of newcomers who come to me as a financial advisor. For some reason, people believe that if they have some money, then they need to be fully invested, and do not think that money may be urgently needed.
Think about it – if you urgently need money, for example, for urgent repairs of an apartment, car, replacement of household appliances, you will not sell your shares quickly, and the stock exchange does not work on weekends. You understand that money is needed very urgently.
Let’s go back to investments with loans
If the loan fits into your financial plan, then nothing should stop you from investing.
Many financial bloggers will tell you that you should close the loan faster. Why such an attitude to debt, I do not understand well. Perhaps because of the abuse of debt, but after all, not everyone does this.
If you already have a loan, and you are comfortable with it in terms of the money remaining after monthly payments, then you just need to invest and save at least small amounts. Think for yourself, you won’t wait 20 years for a mortgage [comfortable for you to pay] to start investing.
In any case, I recommend that you complete both points of the plan to minimize your credit burden.
And in any case, loans should not prevent you from saving and even investing in minimal amounts. The situation is now very good in terms of investing with small amounts. For 2-3 thousand rubles, you can buy several shares or bonds, which will bring you profit, and often higher bank interest rates.
In order not to be unfounded, I will consider an example.
If you invest at least 2-3 thousand a month, in 15-20 years you will be surprised at the amount that will accumulate in your account. This is a seven-figure amount – with a monthly replenishment of 3,000 rubles and a standard yield, this is about 1.7 million rubles, if you invest every month, you can count it on a special service for deposits. I think this money will definitely not hurt you.
I hope I convinced you. But I will add one more argument. In our school and blog, we talk a lot about psychology, and a calm attitude towards loans just speaks of psychological maturity. Imagine that even large companies often use credit loans in order to invest in themselves and get a resource for themselves to grow profits in the future. They just use this money wisely, and really come out in a plus, not a minus.