Getting Started with Investing: A Beginner’s Guide

1.Get started now.

2. Decide on the type of investment to do and how much to invest.

3.Open an investment account.

4.Form an investment strategy that meets your risk tolerance and financial goals.

5.Find the right platform.

In our previous post“introduction to investment”, we listed 5 steps on how to start investing. Well, here is all you need to know about these core steps.

Thinking of investing while in school or not earning so much can be discouraging. However, once you’ve mastered budgeting for monthly expenses and can set aside little emergency fund, it is time to start investing. The trick is to decide on the type of investment to get involved in and form an investment strategy.

As a newbie, I am sure you have a lot of questions to ask.

HERE IS WHAT YOU NEED TO KNOW TO START INVESTING.

GET STARTED NOW!

Investing as a young person is one of the best ways to learn and earn. Set aside as much percentage of your income that is available and invest today. Thanks to compound earnings, your investment can start earning their own return over a period of time.

There will be wrong turns in the stock market of course, but as a young person you can learn and strategize better while riding them out.

If you’re still unconvinced by the power of investing, use our inflation calculator to see how inflation can cut into your savings if you don’t invest.

DECIDE ON THE TYPE OF INVESTMENT TO DO AND HOW MUCH TO INVEST.

How much to invest depends on your investment goal and time set to reach it.

One common Investment goal is retirement . You should aim to invest at least 10%-15% of your earnings a year. It may seem much, but overtime it gets easier.

Take advantage of any chance to get free cash especially if you have a retirement account at work that offers matching dollars. Contribute enough to that account to earn the full match.

To invest for other goals, consider the time frame and the exact amount you need. Work towards investing daily, weekly or monthly to reduce the amount and reach the goal.

The type of investment you should get involved in depends on the risk factor attached to it. It’s important to understand each instrument and how much risk it carries. Do your research to better understand your investment options.

OPEN AN INVESTMENT ACCOUNT

If you do not have a company retirement account, you can invest for retirement in an individual retirement account. Create a special account to be used for Investment. If you are investing towards another goal, then do not opt for a retirement account because they have certain time restrictions.

Open a taxable brokerage account that is accessible and not restricted. Despite the popular misconception people have, an investment account is not only opened with a huge sum of money. Some online brokers require no minimum investment to open an account.

FORM AN INVESTMENT STRATEGY THAT MEETS YOUR RISK TOLERANCE AND FINANCIAL GOALS.

Forming an investment strategy is very important to achieve Investment goals as the stipulated time. Questions like: how much money you need to reach your goal and your time horizon should be answered.

If your savings goal is more than 20 years away (like retirement), almost all of your money can be in stocks.

If you’re saving for a short-term goal and you need the money within five years, the risk associated with stocks means you’re better off keeping your money safe, in an online savings account, cash management account or low-risk investment portfolio.

FIND THE RIGHT PLATFORM.

Profitable investing requires you use the right platform/ brokerage service that aligns with your investing goals, educational needs and learning style. Especially for new investors, selecting the best online stock broker that fits your needs can mean the difference between an exciting new income stream and frustrating disappointment.

While there’s no absolute way to guarantee investment returns, there is a way to set yourself up for success by selecting the right platform that best suits your needs.

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