It’s that time of the New Year again, when resolutions are made and broken. But alongside the usual plans to lose weight, get organized or learn to dance, it’s not a bad idea to put some of that resolve into managing your investments. Inspired by King Solomon’s advice from the Book of Proverbs to act with wisdom and prudence, and Jason Hartman’s 10 Commandments of Real Estate Investing, here are 5 resolutions to make 2014 a prosperous investing year.
1. Become Better Educated
Resolve to become a more savvy investor in 2014 by learning more about investing in general and your investments in particular. That way you’re more able to make smart decisions and identify questionable advice and advisors. Investing knowledge can be acquired through courses, research or sharing with other investors, often for free.
2. Take Control of Your Investments
Make the decision to invest directly – and retain all the decision making power where your investments are concerned. The confidence to do this comes largely from Resolution Number One: become better educated about the investing process so you’ll be able to make good decision without resorting to an array of managers, advisors and partners. Keep investing in your own hands whenever possible.
3. Explore Diversification
Whether you’re a seasoned investor or just starting out, explore ways to diversify your holdings and spread investments over as many areas as possible. That helps minimize risks and maximize returns, especially if markets suffer a downturn. Getting your eggs out of that single basket and considering all possible opportunities can keep your investing career afloat fro the long term.
4. Leverage Debt Efficiently
Explore ways to put other people’s money to work for you. Funding investments with borrowed money can protect personal finances and reduce risk. Financing and refinancing investment properties can also help protect owners from legal issues and create eligibility for a variety of tax breaks.
5. Learn to Love Taxes
As Jason Hartman says, real estate is a highly tax favored asset, and property owners are eligible for a long list of deductions and exemptions that can help investors accumulate wealth. While you’re putting Resolution Number One into practice, take time to learn about taxes — in some ways, they can be an investor’s best friend.
Resolutions are always made with the best of intentions. But while that treadmill you got for Christmas may be gathering dust by March, the investing resolutions you make could keep paying off all year long. (Top image: Flickr/theconsumerist)
The Solomon Success Team