WHAT TO DO WITH YOUR FIRST PROFIT: 3 SMART OPTIONS
The moment you first see a positive addition to your portfolio is special. Whether it's a few tens of dollars or a substantial sum, the feeling of satisfaction and confidence comes instantly. It's a signal that your decisions are working, and you're moving in the right direction.
But along with joy comes the temptation to spend, lock in, and "celebrate success." This is where many people make their first serious mistake: they become emotional about profits, forgetting that the initial profit is not a goal, but a start. Properly managing it helps develop investment discipline and set the tone for your entire financial strategy for years to come.
Let's look at three thoughtful approaches that will help you use your initial profits wisely.
1. Reinvest a portion of your profits: let your capital grow faster
The power of compound interest is one of the greatest miracles of the financial world. When you don't take your profits but instead reinvest them, your money starts working for you. Even small amounts invested systematically turn into substantial capital over time.
Example: If you invest $1,000 and earn a 10% return, leaving those $100 in the works will result in a profit of $1,100 next year, not the original amount. This process repeats itself over and over again, and after a few years, the effect becomes noticeable even with modest investments.
Tip: Choose a simple rule for yourself, such as "reinvest at least 50% of your profits." This will help you maintain a balance between "experiencing the results" and "building the future." You can withdraw half or use it to treat yourself, but be sure to return the other half to your income stream.
2. Diversify your profits: let your money work in different directions
When you make your first profit, it's tempting to reinvest everything back into the same asset that showed growth. But this creates the risk of becoming dependent on one sector or company. It's much wiser to use your profits to expand your investment horizons.
What this means in practice:
If you've made money on one company's stock, consider stocks in another industry or country.
If your portfolio is built entirely on stocks, add bonds or ETFs.
If all your investments are in a single currency, add some currency diversification.
This way, you're not just "locking in profits," but creating a stable and balanced portfolio that can generate income even when market conditions change. Tip: Try the 70/30 rule — Put 70% of your profits into familiar instruments, and use the other 30% to explore new opportunities and learn through practice.
3. Invest in yourself: profits that grow with you
One of the most reliable ways to use profits is to invest them in developing your own knowledge and skills. This could be a stock analysis course, a book on financial strategies, an investment masterclass, or a consultation with an expert. Every step toward education increases your confidence, reduces the risk of impulsive decisions, and helps you better understand the market. These investments don't depreciate and aren't dependent on index fluctuations—they form the foundation for more mature and thoughtful decisions in the future.
As Warren Buffett said, "An investment in knowledge pays the highest dividends." And the sooner you start investing in yourself, the sooner you'll see not only your capital grow, but also your professional approach to it.
Conclusion
Your first profit isn't so much a sign of success as it is a test of your financial maturity. Many investors at this stage conclude, "If I've made money, I've got it all figured out." But a mature approach means realizing that this success shouldn't be squandered, but rather consolidated.
Use your profits wisely:
Reinvest to grow your capital faster;
Diversify to reduce risks and open up new opportunities;
Invest in yourself to make even better decisions in the future.
This way, you'll turn random luck into a sustainable strategy. And your next profit won't be your first—it's simply further confirmation that you're doing the right thing.
HOW TO INVEST?
Open a free brokerage account with Unibank Invest and start investing. The Unibank Invest app provides access to the world’s largest stock exchanges, enabling you to purchase international investment instruments, such as stocks, bonds, and ETFs.