investing for beginners

A Quick How To Guide to Investing for Beginners

You don’t have to be a millionaire to start investing. In fact, all it takes are just a few educated tools to help you grasp the basics.

Why entrust all of your money in a savings account that garners little to no returns? If you’re one of the 18 percent of Americans who haven’t saved a dime, it’s never too late to start.

Online brokers are a great resource to help you navigate the investing for beginners process. Not only will you get assistance with your investment portfolio but their expert navigation will help guide you through those New York Stock Exchange and Nasdaq transactions with ease.

Be smart about how you invest your money and before you know it, you’ll be steadily growing your finances.

Investing for Beginners: Five Ultimate Tips

For novice investors, the entire process can seem overwhelming. Bears? Bulls? S&P 500? Mutual funds? Index funds? It’s enough to make your head spin. But it doesn’t have to.

Take a look at the five tips below and get on track with your future finances.

1. Learn the Investment Lingo

Avoid the media’s sensationalized version of how the market operates and instead learn the good old-fashioned way by reading books.

The Intelligent Investor by Benjamin Graham and Rich Dad, Poor Dad by Robert Kiyosaki are two great books to start with.

2. Small Change Can Make a Big Difference

It’s a common misconception that you need a large amount of money to start investing; however, that couldn’t be further than the truth. All you need to begin the process is a savings account, some discipline, and some short-term money saving goals every month.

For example, instead of buying that iced latte five times a week at $5 a pop, take four days’ worth of coffees and put that cash into a savings account. Before you know it, you will have saved $80 dollars a month! With a modest amount of discipline, you can save and invest approximately $1,040 a year!

3. A Diversified Strategy is the Best

If you’re new to investing, there’s one thing you should know right away: don’t put all of your golden eggs in one basket. It’s too risky to invest everything in an undiversified portfolio because if the market crashes, you lose it all.

Instead, choose several stocks and funds to invest in of just one and you’ll greatly reduce your risk of losing everything. Mutual funds are also another great option for keeping your investments diversified.

4. Don’t Ignore Your Employer’s Retirement Plan

If your employer offers a retirement plan option like a 401K to you, take advantage of it.

It’s a great way to build up your portfolio without your bank account taking a major hit. Even if you start off deducting just a small percentage of your paycheck every month – under three percent – over time you can increase that amount as needed.

5. Think Long-Term

While it’s easy to get caught up in the fantasy of getting rich quick with a lucky investment, it’s best to think long-term.

Consider a five, 10, 15, and 20-year approach and allow your investments room to grow.

Ready to Grab the Investment Bull by the Horns?

Now that you’ve got a few investing for beginners’ tools in your belt, it’s time to get out there and have fun with the process. For more great life hacks and productivity tips, remember to visit our blog for the latest news!

Contact us today and let us know which investments worked out best for you!