Between the years 2020 and 2021, the real estate market for the US is estimated to increase by 4.1%. With statistics such as this, it’s no wonder that people are looking into investing.
Most people may consider investing at some point in their lives. They would have heard stories of how investing has prospered others. But a large number of us won’t have a clue where to start.
The following article is a guide to investing for beginners. We will cover where to start, how much you will need, and a few great tips to help you along your way.
What Is Investing?
Let’s look at a basic explanation of investing. Investing is buying a number of shares for certain assets. Your share’s worth depends on the total amount of each asset’s market value.
A share is a piece of a company/asset. If you buy shares for a young company, each share’s value will increase with the company’s rise. However, if the said company were to fail, the value of your shares would drop with it.
The hardest part of investing is knowing when to sell your shares before you take a loss. If you are looking for an “Investing for Dummies Guide,” that one fact will sum up the basics. If you are not willing to make a potential loss, investing may not be for you.
How Can Investing Be a Benefit?
The aim of investing is to take your money and increase the total amount. With the total inflation of the modern world, most people want to find new ways of increasing their money.
Investing is an excellent way of increasing your money easily. There are options of putting money into a bank account and watching the interest make it grow. But, investing can offer a far higher rate of return than using a bank.
Interest at a bank can average around 2% interest each year on your money. Starting with $10,000, you will grow that number to around $12,190 after ten years.
Investing that same $10,000 could gain you 8% interest each year. This level of interest would find you with a total of $21,589 after ten years. That’s almost $10000 difference.
How Much Is a Good Amount to Start With?
This question is probably the most asked when regarding investing. But it’s not a simple answer. The total amount of money each of us can invest will vary from person to person.
There are a few factors to consider when deciding your answer to this question:
- What are your individual financial goals?
- What is the reason you want to increase your money?
- Are you looking to make a large purchase, such as a house?
- Do you want to increase your pension funds?
- Look into investing in alternatives for advice in this area.
- What is your budget for investing?
- It’s safe to say, the more money you put in, the more you may take out.
- Don’t risk losing all your money. Invest 5-10% of your net income.
- What level of risk are you willing to take?
- There is always a risk to investing.
- Will you target the high-risk assets or the low-risk.
- High risk will gain you a higher outcome, but you have more chance of losing it at the same time.
Every beginner’s guide to investing should point out that there are risks. But, it is down to you to decide how much risk you are willing to take. Don’t take too high a risk if it will lose all of your money.
Guide to Investing
Let’s have a quick look at actually how to invest. The following steps can all be done online, and you can start your investing journey today.
- The first thing you will need to do is create yourself an investment account.
- Find the right account with the right broker for the instruments you wish to invest in.
- Test out demo accounts to practice investing without risking actual money.
- Download your investing platform
- With the rise in modern technology, you can now download software to help your investing
- Research platforms such as MetaTrader 5
- Decide your investment market
- The available assets you can invest in are broke up into different markets
- Find a guide to investing in stocks
- Find a guide to real estate investing
- Each market will have a range of benefits and risks
- Find the right market for your investments
- The available assets you can invest in are broke up into different markets
Tips to Get Started With Investing
You should now have a better idea of why you want to invest. You should also know the steps on how to begin your investment journey. Let’s cover a few tips to remember during your time as an investor.
Investing Is a Long Term Game
Investing is perfect for those who are wanting to buy shares and leave them to grow. Most investors will buy shares and leave them to grow over the space of decades.
If you want to make a lot of money in a short amount of time, maybe you should look into trading. Traders can make money in as little as a minute. Investing is a long-term game.
Regular Upkeep of Your Investments
As we have mentioned, investing has its risks. You could have shares with a company that may lose market value overnight. You should always maintain your upkeep to ensure you don’t risk losing money.
If your shares are growing, consider contributing extra money over time. Place as little as $50 extra each month. You could find that your investments will rise quicker than your original sum.
Use Your Head
During your investing journey, you will see a lot of new and exciting trends. You will see that a large number of people are either buying or selling shares. Just because they are doing it, it doesn’t mean you have to.
Use your head while choosing your portfolio. Make your decisions based on data, not popularity. If you see a trend that isn’t part of your strategy, don’t be tempted to follow the trend, you could end up worse for it.
Invest and Progress
Investing can have some significant profits on your bank account. But it can also come with some serious risks. Remember to think about those factors to consider before you take those risks.
Do you have any further inquiries regarding this guide to investing? Head over to our contact page and send us a message with your questions. We aim to reply within a maximum of 48 hours.