A Look at the Different Types of Investor You Can Be
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When it comes to investment planning, it’s always a good idea to determine what type of investor you are. While some investors quickly put their money where their mouth is with a little research and get lucky, many others do not. It’s important to plan and research a business or investment opportunity before piling money into it, just so you can have your own peace of mind. Here are a few different types of investor. Which one are you?
Pretty much all of us begin our investment journey as a pre-investor unless we are lucky and had a decent trust fund from the age of zero. Typically, pre-investors live between paychecks and rely on investment opportunities to succeed to give them the lifestyle they crave.
The problem is, pre-investors often don’t have the knowledge when it comes to savings or plans and instead, just pile money into investment opportunities in the hope they pay off. This is typically the worst kind of investor you can be, but it’s also a great learning curve to try and become a passive investor where the real money starts rolling in.
When we eventually grow up and realize that the pre-investor status isn’t the status that’s going to put us on the path to financial freedom, we end up becoming much more responsible and look at a passive investment strategy to increase our chances.
Such a strategy involves the use of information online and in bookstores to determine what our next investment model’s going to be. A passive investor usually supports the “grown-up” motive and secures a mortgage, plans for retirement and saves at least a percentage of earnings every month. While there are no official statistics in place, it’s been noted that more than 90 percent of investors believe themselves to be passive investors.
With the advantage of having an online finance masters degree to better your knowledge in the online finance field, it’s possible to become an active investor who makes their money do all the work. Being an active investor is much more profitable than both pre-investor and passive investor, but it takes a lot more experience and knowledge in the field to become a success.
Usually, active investors build on their passive investor foundation and use their income to invest in different ventures to earn an income. Being an active investor requires more work, which is why many investors stay at the passive level because they quite simply can’t hack it. Active investors understand that building wealth is through return on investments, and that’s why they put more effort into making their endeavors work.
Pre-investors will never make a lot of money because they haven’t quite grown into the world to realize that it’s hard work. Passive investors are those that have grown out of the pre-investor status and start to earn money via other investment means. It’s obvious that the active investors status is what everyone wants to achieve in the investment world. However, there are only certain types of people who can get to that level. Those people are motivated, determined, and love money more than anything else in the world.
Photo courtesy of: Maklay62