Your present financial situation

You need to begin by evaluating your current financial situation. Consider your assets, your liabilities, your total household income and the amount of discretionary income that you have available to invest on a monthly basis. Your discretionary income is the income that you have left over each month after you pay all of your household expenses. Next, you need to evaluate your current level of cash reserves. Cash reserves can be defined as the assets set aside in the case of an emergency or for an opportunity. An example of an opportunity would be a great investment, a real estate property that you want to buy or a great vacation discount that you want to take advantage of. It is recommended that you keep between 3-6 months of your total household expenses set aside as cash reserves. The other factor to consider is the level of your personal protection. Your most important asset is your ability to earn an income. Protecting yourself, your home, your vehicles and your family is important. Evaluate your levels of insurance coverage to determine whether it is sufficient to cover your present needs.

What are you saving toward?

Everybody saves for a purpose. Some people save to ensure a better retirement. Some people are saving to buy a car, home or a new boat. Some are saving to ensure that their children have a great college education. Before you begin to save, sit down and think about all of your goals, and then prioritize them based on personal importance. Ask yourself whether these goals pass the acid test. The acid test asks if you would be willing to do whatever it takes to achieve these goals. For example- Would you reduce your lifestyle and expenses to save more money if it would ensure that you reached your goal? If a goal does not pass the acid test then you should remove it from your list. Next, define each goal with a time frame and an amount. For example- I need to have $50,000 saved for my oldest son by 2010 to pay for his education, is a clearly stated goal. Once you have defined your goals, determine the dollar amount needed to save to achieve them and the length of time you have to save for them. These factors will be taken into consideration when making your individual investment selections.

Do you understand your investment options?

Consider investing into mutual funds if you are a new investor into the stock market. Mutual funds are comprised of multiple individual stocks or bonds and usually offer a smaller initial investment amount to be contributed on a monthly basis. This smaller dollar amount makes it possible for a variety of investors to begin saving into the stock market without large sums of cash already set aside. Understanding stocks, bonds, mutual funds, real estate investment trusts, cash value life insurance, annuities and trusts is an important place to start when you are a beginning to invest. Research each investment option to determine which combination will best assist you in reaching your financial goals.

Define your Investment Risk Tolerance

Now that you have an understanding of the stock market, you need to determine your personal risk tolerance before you start to invest. Your risk tolerance refers to the amount of variance you are comfortable with in your portfolio, and is often defined by how far away the goals that you are savings towards are. Investors are typically categorized as Aggressive, Moderately Aggressive, Moderately Conservative and Conservative. Each investor type is characterized by their investment portfolio, their time frame to save, their expected portfolio returns and their overall tolerance to withstand portfolio value changes on an annual basis.

These are the most important things to consider before you invest into the stock market. Having a financial plan that you implement will increase your chances for financial success.

This is not investment advice. Before implementing any investment strategies, consult your financial advisor or financial professional.

1. Knowledge

A wise investor would only delve into stock market investment upon being apprised with the necessary and crucial information. It is a must to invest on companies only upon learning everything about it, from its past records, current performance and future plans.

Stock market investment advice should be sought considering the difficulty of locating that right stock that will give big returns. The investor must fully know the fundamental value of the stock he or she will buy.

Invest in a company which belongs to a familiar industry. The stock market investor must have a good understanding of the business in order to realize more the value of the stocks. This will also make the investor less dependent to analysts and advisers.

The sources of information to rely upon must be carefully chosen too. Tips offered in the market should be avoided as much as possible. These are usually given by people with vested interests.

2. Long-term goal

An important consideration in stock market investment is setting a long-term goal. The long-term goal would determine the approaches to be taken and influence the decisions to be made.

The adherence to that goal would ensure regularity in instances of indecision when the stock market gyration comes to play. It would avoid whimsical decisions adversely disturbing the finances. A long-term goal could result to a more stable financial future through steady purchases investments. The key word here is consistency.

3. Calculated Risks

There are risks in any business endeavors. However, this must be calculated to minimize the probability of loss and to increase the expectation of profits. Speculating is not an option.

Never gamble and risk losing big money in the stock market. Investments should not rake in huge losses. It is easy to buy stocks, but money lost would be difficult to gain back. One cannot afford costly mistakes.

The established system in realizing the long-term goal must be strictly followed then. This will reduce the probability of putting too much money just to incur big losses.

5. Discipline

To make the most of the stock market investment, the investor himself must possess the proper determination and discipline to continually persevere in realizing the long-term goals set.

Stock market investment today requires passion and courage to come out as a winner. The stock market gives the opportunities; all that is required of the investor is being prudent.

To begin with, in order to be truly successful, or in other words to emulate the behaviors of truly successful people, there are a few key principles you must understand and apply to your daily practices.

The first and most important of these principles is that your life is and will be EXACTLY what you make of it. It sounds over-simplified, I know, but hear me out. The world functions down to the smallest atom on certain unchangeable natural laws. What goes up must come down, objects in motion tend to stay in motion, and so forth. But the most profound of these laws is that of cause and effect, a principle which simply states that a process must be initiated in order to carry itself out to completion. A similar concept which springs forth from cause and effect, and the core of what we’re talking about here, is called the law of attraction, or manifestation, or any other name it has been called by. It is simply the force which carries an idea from its initial intent to its final result. What this means to you and I is that whatever intent or attitude we place into being has the full potential to be made manifest, like a message sent out to the universal order that will, in fact be answered in one manner or another. So getting back to the simple, what we think is what we will become, simply because we have started its creation by thinking of it.

Given this reality, it becomes paramount to discipline our ways of thinking toward the positive and productive. The mind is like a muscle, and flexing it can be difficult at first, but given some time and excercise, positive thought can become second nature. Meditation, or simply making a daily ritual of affirming your goals to yourself can be excellent starting points on this evolution. There are, of course, more advanced steps, however those are bridges you will want to cross when you get to them. My seven step program, referred to at the bottom of this article covers those advanced techniques in detail. Now that we’ve established the need to affirm your principles of action and personal goals, let’s take a look at some of the most important of those principles.

1. Abundance is a Function of Natural Law:

Inherent in nature’s laws of cause and effect lies the universal truth that abundance is always present in our world, needing only to be claimed by those willing to initiate their own cause, within the boundaries of time tested methods.

2. Net Worth Begins With Self Worth:

In any free market transaction, true value must be demonstrated in order to attain rewards. Therefore, one must create superior worth and directly associate that worth with every action he or she takes. Because all people will inevitably act to their own benefit first and foremost, you must respond in kind by elevating your own value to a level of superior market worth.

3. With Freedom Comes Responsibility:

Having personal freedom means, above all, that you are given a choice of whether to act as master of your own destiny, or be acted upon haphazardly by those who are looking out for their own best interests. In order to be truly prosperous, however, one must be willing to live by true principles. For some it goes without saying, but one of these can easily be summed up by the Golden Rule. Positive goals can never be accomplished with any lasting result through harm or deceit. But the most profound implication of this pillar is that YOU DO have the ability to live abundantly whenever you so choose.

4. Intent Manifests as Reality:

In This principlehas been referred to by various scholars and luminaries by such names as “The Law of Attraction,” “The Principle of Manifest Intent,” and even “The Power of Prayer.” It is simply the act of making your will known to the universe, and contributing the necessary effort to bring that will about. Because this principle is so far reaching and powerful, it becomes paramount to discipline one’s thoughts toward the positive.

5. You are Your Own Best Asset:

The fundamental difference between the mindset of a CONSUMER, once termed ’sucker’ by famous American entrepreneur P.T. Barnum, and that of a CREATOR is that a consumer believes material possessions to be the only source of value. Whereas, a creator views human life as the only true source of value. Thus consumers primarily drain the marketplace, while creators primarily add to it.

6. Your Life Has Profound Impact:

Reaching even beyond the infinite value of your own life, you can gain boundless significance, simply by remembering those whose lives you deeply desire to change for the better. Your loved ones, children, friends, and colleagues will all benefit tremendously from the positive actions YOU take. As Thomas Jefferson once so eloquently penned, “All men [and women] are created equal.” Realizing this wisdom, it becomes imperative to achieve your duly endowed potential by creating value for yourself and others.

7. Money is Granted Value by Transactions:

Because the amount of money you make is always directly proportionate to the value that you bring to the table, your value is legitimized by profit. If sufficient value is not present, no transaction can possibly be performed. This principle serves to protect and benefit both parties.

8. Success is the New Normal

As Rupert Murdoch, one of America’s greatest moguls has said, “The world is changing fast.” No longer is it normal for prosperity to remain exclusive to the select few of society’s elite. One need only watch the evening news to see fast acting and energetic individuals making leaps and bounds every day toward leveling the playing field of American business.

9. The Path of the Herd is NOT Always the Correct Path:

The fact that all of the other dogs are barking up a given tree does not make that tree the right one. Enough said?

10. Ownership Equals Freedom:

True freedom is only possible through independence. As long as one must rely upon an outside source for survival, he or she is not truly free. As Alexander Hamilton said, “Power over a man’s subsistence amounts to power of his will.”

To view more information on these and other key concepts to wealth creation, including a full 7 step wealth training program, visit http://www.groundinstone.com