Investing for beginners can be a petrifying task if you don’t know the basics. However, you don’t actually need to be pro to invest your money in business. What you need are smart decisions and executing plans to make it successful. Don’t get stressed, yet, there is nothing to be frightened about. There are plenty of tools that can help you make money even if you don’t know the ABC of investment. So, what to do? Well, today’s article describes what you need to do to start investing.
1. Start to Save Up Some Money
This tip is not only for beginners but for everyone who is thinking about investing. Don’t invest your loan money or staple money (I have seen many people doing that) in business. That way, you end up losing everything if a business fails. You can’t afford to make that costly mistake. Instead, I would advise you to save money before you actually invest. Start by saving some money. Now, you don’t have to save up tonnes of money every month. Be practical! Sit down and track your rent and expenses down. Now, calculate how much remains after you have paid for everything, save the remaining. Even if your remaining money is lesser than $10, start saving them, you might not see the point in saving them up now, but when you calculate the yearly savings, you will be astonished at how much you have saved up.
You can either collect them in a cookie jar or big boxes; piggy bank works too! However, a little risk of saving money at home is that you need to control the intense urge to spend it. If you are familiar with it, try getting a bank’s savings account. Save the money in your account without linking a debit card; that way, you won’t be able to spend your money by impulsive shopping. After you have saved enough money, you can start by investing them somewhere you have planned.
2. Start Investing in The Stock Market
You might be thinking, what a weird idea! But hear me out, investing in stocks for beginners isn’t a big deal anymore. You don’t even need a tonne of cash to invest in stocks. Things are easy with digitalization, where you can get started with as little money as possible. If you are dreading to tread this area, invest just a few dollars to get started. Even if you end up losing the money, it won’t hurt you or your wallet. Nowadays, many stock platforms help you invest a little amount and understand how the market works. These platforms also give you helpful tips and educations for not losing your invested money. Once you have learned how to deal in the stock business, you can explore your options.
3. Robo-Advisor Investment
You might have heard about a Robo-advisor. For those who didn’t, Robo-advisors are online platforms that work by asking a few questions based on your goal and how much risk you can take regarding investing your money. Considering your answers, the Robo-advisor invests your money in a highly-diversified portfolio for bonds and stocks. It uses the algorithms to rebalance your portfolio at a lower-cost and optimize it for taxes. Keep your cookie jar saving approach in mind cause most Robo-advisors require $500 or less to get started? However, Robo-advisors can charge some fee of 0.25% annually. Don’t just give up on Robo-advisors yet! Robo-advisors’ fees can be avoided by building your portfolio of Exchange-Traded Funds (ETF) or mutual funds, but that might take a lot of extra work.
4. Try Your Hands On Real Estate Investments
Now, I admit that the real estate investment market can be a slippery slope, but there are some ways you can get away without involving in a big mess. A new category was introduced not long ago that requires less money or good credit to invest. That category’s name is Real Estate Crowd funding. So what Real Estate Crowdfunding’s role? This investment method makes it possible to own fractional shares of large companies without actually buying or owning a property. The benefit of real estate using the crowdfunding platform is that the cost is shared between you and other investors without requiring any property maintenance responsibility. However, one major disadvantage of crowdfunded real estate investment is that you do need a lot of money to invest. Another risk is that you are putting all your money in a single investment body, so if anything of inconvenience happens, you might end up losing the entire capital.
5. Try Treasury Securities for A Safer Investment
You should find best mutual funds to invest. Bonds are a safe way for small investors to begin investing. They are also known as Treasury Securities in the US. If you don’t have an immediate plan of getting richer, I will encourage you to start with Treasury securities. The reason I say so is that it is a risk proof investment, and you may even end up receiving some interest if you are lucky. You can buy fixed-income saving bonds with maturities at $100 denominations. You can also buy Treasury Inflation-Protected Securities through Treasury Direct to receive an interest amount. Not only that, but they also make adjustments to accounts for inflation based on the changes in consumer price. The slight drawback is that you can’t expect anything significant out of treasury securities as the yields are downgrading with time. I won’t really refer to it as smart investing for beginners, but you have nothing to lose!
When investing your money, always be vigilant and think practically. A practical approach can save you from making bad decisions. An amateur investor should think about learning the investment game rather than thinking of hitting the jackpot because that rarely happens. So, be smart, not greedy!