Investing is simpler than you think, and you don’t need piles of disposable income to get started. If you’ve got a career, you’ve already taken the first step! By earning money and gaining experience, you’re investing in growing your best asset: you. So since you’ve already got a head start, we can help you get going with the rest.
Most people save or invest with a goal in mind. Saving usually relates to short-term goals (like wanting to buy a house or a car in the next few years), whereas investing is usually for more long-term goals (like retiring early by generating income or profit from said investments). But before you get lost daydreaming of your ultimate goal, you need to get your finances in order. You can start by taking stock of where you stand, or speak to a financial advisor to see if you’re ready. Some of the basic things you need to do before you even consider investing are the following:
Know where your money goes, and keep it in order.
Get rid of high interest and unhealthy debt.
Set up an emergency fund.
Protect yourself and your assets.
Set financial goals.
This is by no means an exhaustive list, or a proper needs analysis based on your personal financial situation, but it is a good way to start growing your wealth! Here are some things you need to know before you get stuck in.
You can start early.
The younger you are when you start investing, the better off you’ll be later on. It’s simple maths! More years spent investing equals more money and more time for your money to grow. Don’t stress if you can’t start with a huge amount yet. Invest what you can and aim to increase this amount whenever you’re able to, but always check with your broker or financial advisor for a holistic view on your financial situation and portfolio.
Don’t stress about stocks.
Investing isn’t just about knowing the ins and outs of the stock market, so don’t worry about deciphering the rows of numbers in the financial section of the newspaper (who even reads the newspaper anymore?). If you’re keen to try anyway, do loads of research before picking shares, and consider using a platform like EasyEquities that will guide you through the process. Chatting to a financial advisor and spending some time online keeping up with financial news is a good place to start.
Diversification is key.
Is there anything that can’t be improved with a little variety? We think not! The same goes for your money. There’s the low-risk options like Money Market funds, and the more high-risk options like stocks. Each has its own merits, and each caters to different time frames and goals. Talk to a financial advisor, but also chat to friends, family and as many other trusted sources as you can. It’s your money, so you want to make sure you’re informed enough to make the best decisions about where it goes.
Be wary of scammers.
If an individual guarantees a big return in a short period of time, that’s a big red flag. No legitimate investment will make you rich overnight, and the point of investing is to set yourself up for a secure future to enjoy when you’re a little less lively than you are now. We know that’s not what you want to hear, but it’s the truth. In the meantime, avoid scammers, dodgy business deals, or Leonardo DiCaprio on quaaludes.
Before you dive right in, you might want to check out the next article to make sure you don’t confuse saving and investing.