Investing Guide For Beginners

Investing Guide For Beginners

If you are serious about securing your financial future you need to begin focusing not only on creating as much income as possible, but also with investing that income into assets that can produce even more money while you sleep.

High-paying jobs are great, but they will never be able to beat learning how to invest in stocks, invest in real estate, or invest in other opportunities that can produce extra income streams totally separate from your time, your effort, your energy, or your skills and abilities.

The beauty of learning how to invest strategically is separating your financial future almost entirely from the concept of working for your money and instead turning things around completely and making your money work for you.

At the same time, trying to figure out how to start investing in stocks, investing in real estate, or capitalizing on other investment opportunities from square one doesn’t feel as simple or as straightforward as it probably could or should be.

But that’s why we have put together this quick guide.

By the time you’re done with the inside information we highlight below you’ll know exactly how to get started in the world of investing, safe and secure in the knowledge of how to best approach your first few investments, and how to transform a relatively small nest egg into a secure financial future and retirement.

Why Invest In The First Place?

The first thing you’ll have to wrap your head around straight out of the gate is the importance and value in investing to begin with.

For a variety of different reasons it can be really challenging to get into the mindset necessary to invest to begin with. This is especially true if your income doesn’t leave a lot of money left to invest at the end of the month to begin with, and you find yourself having to choose between investments that might not pay off for a decade (or longer) for buying something you really want right now.

Dealing with these competing desires is critical, though. It’s important that you are able to delay your gratification enough to become a successful investor – recognizing that you can turn even just a little bit of money right now into a mountain of money later on if only you’re willing to let time and compound interest handle the heavy lifting for you.

For example, here’s what happens to just $1000 when left in your average checking account, savings account, or investment account for a 30 year block of time.

Checking accounts have an average interest rate of 0.5%, which means that your $1000 deposit into that account would return $175.80 (or so) over that 30 year block of time.

Savings accounts have slightly higher annual interest rates on average at 0.9%, which means you’re able to turn that same $1000 deposit into $281.89 over a 30 year block of time.

Not to turn our noses up at “free money” – but there isn’t anyone retiring on an extra $200-$300 in 30 years anytime soon.

If, however, you put that $1000 into an investment that returned an annual average of 7% (something you can do quite easily with index fund investing, for example) you’d instead find yourself sitting on top of just north of $7000 at the end of 30 years.

Sure, you won’t be able to retire on $7000 after 30 years, either – but that investment approach would give you over 19,700% more money over that stretch of time than you’d get out of a checking account.

Now let’s imagine that you start with $10,000, $20,000, $50,000, or more stuffed into that 7% annual investment account. All of a sudden we’re not talking about enough money after 30 years to buy a used Honda Civic.

Start Investing Strategically

One of the coolest things about learning how to best approach investing in stocks, investing in bonds, or investing in real estate even is that anyone can get started with just about any amount of money and still enjoy tremendous success – as long as you start investing strategically right from day one.

The worst thing that you could do is pump all of your investment capital into an investment “just because”, allowing it to sit without any real intention behind what you are hoping to get out of that investment to begin with.

strategic investing

Yes, some people have great success filling up mutual funds with money and waiting 20 or 30 years to see what they get at the end of the day. But every now and again you have a crash or collapse like what happened in 2008 and you discover that your investment has been wiped out almost completely and you’re left with next to nothing.

A bit of active investing in stocks can help you significantly, especially when you’re leveraging investment strategies that are proven to work almost on autopilot to begin with.

We are talking about investing in index funds, capitalizing on bonds, and making the most of mutual funds as well as savvy real estate investments in a very strategic kind of way.

You need to think about how you want to invest your money, what you want to get out of these investments in the short or long-term, and (maybe most importantly) when you plan on exiting these positions so that you can actually cash in and take advantage of the investments you’ve made at just the right time.

Diversification is a smart and strategic way to go about investing in stocks, bonds, and real estate for sure – but that’s only one small piece of the puzzle. Intentionality is everything when you are just learning investing for beginners, which is why you need to set goals, set benchmarks, and then actively measure your investment progress throughout the year to make sure that you are headed in the right direction.

Stocks and Bonds

Investing in stocks (and investing in bonds, for that matter) is maybe the easiest way to get started creating real wealth – making it a perfect approach for those looking to get into investing for beginners.

Not only is there a wealth of information out there for learning how to invest in stocks and invest in bonds, but the tools and technology necessary to execute these kinds of trades, to research different kinds of trades, and to actively manage your own stock portfolio are more accessible (and more affordable) than ever before.

If you are going to get started in the world of stock and bond investing, however, you’re going to want to make sure that you decide right out of the gate what kind of investor you want to be.

Are you looking to become a daytrading investor that actively pics different stocks, different bonds, and different mutual funds for yourself, actively executing trades every day or every couple of days?

invest in real estate

Or are you more interested in a “set it and forget it” kind of approach to investing for beginners that has you buying and holding stocks and securities for longer positions, requiring a lot less active management but potentially not capitalizing on quite as many wealth growth opportunities as you could with a more hands-on approach?

Both of these investment strategies are valid approaches to building wealth but they take two completely different pathways and require different disciplines, different tools, and different levels of focus.

You’ll also want to decide whether or not you are going to lean on robo-advisor style investment tips and research or if you’re going to do the heavy lifting yourself by reading financial news on a day-to-day basis, feeling the pulse of the market yourself, studying charts and technical analysis, and handling your due diligence on your own.

It might be a good idea to mix and match these two distinct approaches when you are just getting started, to be honest.

Investing for beginners can be a little daunting as is, but combining algorithmic and automated trading research and tools with your own research and due diligence can produce winning portfolios right out of the gate.

Real Estate

Getting started in the world of real estate investing is always an attractive proposal, particularly since there’s so much potential to create windfall wealth almost out of thin air (very quickly, too) when you get into the real estate arena.

At the same time, there aren’t too terribly many investing for beginners guides out there that recommend you jump headfirst into real estate right out of the gate.

invest in stocks bonds

Not only are there are a lot more moving pieces to investing in real estate (and a lot more money at risk) compared to buying stocks or other securities, but there are a lot of outside factors and market pressures that fluctuate on a day-to-day basis that can wipe out your entire real estate investment faster than you ever would have thought possible.

As a general rule, selling stocks and securities (including exchange traded funds and mutual funds) is a whole lot easier – and all whole lot faster – than moving a piece of real estate at the price that you have set and determined.

There’s always some jockeying back and forth, there’s always negotiations to be hammered out, and anytime you bring lawyers into the mix – or real estate agents that want a cut – your profits are going to get beat up a little bit.

That being said, real estate is a fantastic vehicle for creating tremendous wealth. Those getting into investing for the long haul might want to consider real estate more than those looking to build a nest egg in a hurry. Buying and holding property practically guarantees that its value will increase, though you may have to hold it for a little bit longer if the housing market takes an extended downturn.

Non-Traditional Investment Opportunities

There are no shortages of nontraditional investment opportunities to take advantage of today, either.

Nontraditional lending organizations allow individual investors like yourself to offer loans to other people, taking advantage of the same kind of investment opportunities that traditional banks and lending institutions have been capitalizing on for decades.

Crypto currency is another nontraditional investment opportunity that may or may not be interesting to you. In the last five years crypto currency has made thousands of people millionaires almost overnight – but it’s also stalled out of late and we may never see the kind of skyrocketing value it had just a few years ago ever again.

Nontraditional investing for beginners may not be the smartest way to go, but if you want to stay out on the cutting-edge, want to capitalize on unique opportunities, or have set aside funds that won’t break your investment nest egg to kind of play around with nontraditional opportunities it may not be a bad idea to check some out.

Automate And Systemize As Much As Possible

Technology today makes it so much easier to invest than ever before, giving you instant access to financial information, tools, and strategies that weren’t available to your average investor even just a decade or so ago.

In fact you can download a free mobile application to your phone right now (this very second) and open a stock trading investment account inside of 15 minutes – buying and selling stocks in record time, all without paying any commissions or fees along the way!

It’s a good idea to leverage technology as much as possible, especially when you are getting started in the world of investing as a beginner.

Automation will guarantee that you don’t miss out on opportunities you already identified, can help you hedge against risk, and can help you sift through all of the information out there and really laser focus your attention on the most important details. Take a look at automatic investment plan (AIP)

There’s no such thing as a sure fire system for 100% successful investing (even Warren Buffett stumbles every now and again), but it’s a good idea to create rules, boundaries, and guidelines that influence the investment decisions you make even as someone brand-new to the game.

This’ll add a lot of structure to your investments, will help inform the decisions that you make, and will help quite a bit when you’re trying to decide whether or not a specific investment opportunity or risk is worth investing for retirement or passing up until something else comes down the line.

At the end of the day, individual investors have a lot more power and a lot more opportunity today compared to any other time in human history.

It’s important that you capitalize on the leverage available in that you make the most of time and compound interest going forward. The best time to invest your cash and capital was 30 years ago. The second best time to invest your cash and capital was yesterday. The next best time to invest your cash and capital is today.

Take advantage of the tips and tricks included above to help you hit the ground running in the world of investing as a beginner!