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Most people have this misconception that market investments are for the rich only. Trust me, that's the only barrier stopping you from putting your money to work.
With so many resources and abundant information available on the internet, investment has become so much easier even for the beginners. And this article is all about getting you started.
Investing is a very personal decision and there can't be any one-size fits all formula. It totally depends on your financial goals, existing assets and risk tolerance among other factors.
Here are few ways you can opt for:
Investing is all about putting your money to work and it's important to be consistent in doing so. You can make a plan for either weekly, monthly or quarterly investments depending on the availability of funds in your bank account.
Once you've decided how much you want to invest each time, automate this process by linking your checking account with the brokerage account and set up an automatic investment plan.
There are two types of brokerage accounts: commission based and fee-based that differentiates between the trading cost you'll have to incur as well as its convenience.
Commission Based Accounts: If you're working with a limited budget, go for these because you only need to pay when you make a trade.
Fee-Based Accounts: If your investment amounts are more than $5000, it makes sense to go with this option as they charge a flat monthly fee thus saving money on commissions.
Here are some of the best brokerage accounts for beginners:
Once you've decided how much and on what basis you want to invest, it's time to choose the right investment vehicle. If this is your first time investing in stocks or mutual funds, index funds can be a great starting point. They have low fees and track an entire market which makes them diversified thus minimizing risk of loss.
You can also consider ETFs as they are easy to buy, have low fees and highly liquid on the stock market. Alternatively, you can opt for mutual funds where a professional money manager will invest on your behalf by analyzing different stocks or bonds with appropriate asset allocations based on age, risk appetite etc.
In order to make an informed decision, you need to develop a process for evaluating the firm's financial performance. There are several factors that might influence the company's stock price in future including its management team, financial models and corporate strategy.
Good things to consider before investing:
"I will tell you how to become rich. Close the doors. Be fearful when others are greedy. Be greedy when others are fearful." — Warren Buffett
Regardless of how much you make, your money should work for you and this happens when it's invested at the right time. Though market fluctuations are normal but timing them is very difficult thus avoiding the temptation to jump in everytime there's a rally or sell during dips is important.
Investing is a marathon and not a sprint. It's all about putting in the effort to reap rewards over time by making smart investment decisions that can get you closer to your financial goals with minimal risk involved.
It takes real discipline and it starts with setting aside money for investing each month or every paycheck before spending on any other expenses. This will keep you motivated to stick with your investment plan and achieve financial independence over time rather than just thinking about it!
Even though it's not necessary to keep track of your investments, being informed about how much you have earned or lost can help you make better decisions. You can use a spreadsheet or an investment application to keep a track of your investments.
Obviously, we can't include everything there is to know about investment in just a few paragraphs, but here are some best investment rules to live by:
I'm sorry to say that some don't. Not all cryptocurrencies like Bitcoin and Ethereum provide the same level of returns as compared to traditional markets and not all cryptos will survive in future.
But this doesn't mean we should shy away from cryptos; we just need to be smart with our investments otherwise we can end up losing everything we have gained so far by investing in them about a year ago or today!
We must understand what kind of investment strategy would work for cryptocurrency before jumping on board purely because it's generating huge returns at an unprecedented pace.
So here are three golden rules of crypto investing:
Rule #1: Don't put all your eggs in one basket, diversify your investments in various coins and exchanges.
Rule #2: In the long run, some cryptocurrencies will fail but the very few of them that survive are bound to become some of the biggest names in the business. See the potential.
Rule #3: Remember, the market is volatile and it's very difficult to predict which cryptos will succeed or fail. Do your research well.
In the end, all you need to do is educate yourself on the basics of investing and don't be afraid to take control over your finances. There are plenty of online resources that can help you make informed financial decisions.