So, you’ve managed to stabilize your personal finances and get some cash in the bank. Naturally, you’ll want to see that money grow like no tomorrow. The best way of doing this for the average person is investment. If you’ve got no experience managing your money on this kind of scale, the whole concept of making money from investing may feel extremely daunting. To save yourself from getting burned, here are a few helpful investment tips for beginners…
Despite what you may have heard elsewhere, you’re never too young to start saving and planning for the future. After getting your first real job, and sorting out a personal budget, make a plan to carve off some of your monthly income and set it aside for saving and investing for the future. By and large, the longer you invest, the more money you’re going to make. Like anyone, you’re going to go through ups and downs and make various rookie mistakes. However, it’s extremely rare for someone who starts investing from age 30 to make more from it in their lifetime than someone who starts at 20.
Talk to Someone with the Knowledge
If you know you’re completely clueless when it comes to investment, you need to spend some time figuring out your options. You can speak to an investment advisor at your bank, for example, over whether or not you should open a certain kind of savings account over another, or a private equity fund administrator in your extended social circle, who will help you devise a long-term strategy for making your money go further. Sometimes, joining a forum and posing questions to all of its members can be all it takes to get a clearer picture of the road ahead of you. Once you understand a bit more about different kinds of accounts, assets, and the factors that affect them, you’ll be in a stronger position to start investing with confidence.
Start With What You Know
When you’re looking to take your first steps into a volatile market, for example the stock market, it’s best to stick with what you know. If you have a daily ritual of having a green tea latte, then target shares in coffee shops. If you’re a technology geek, start assessing the prospects of fledgling start-ups. Just remember that you have to separate this from more serious investing, and use your money wisely depending on the time scale you have.
Finally, you have to avoid putting all of your eggs in one basket at all costs. Mutual funds and exchange-traded funds tend to be great choices for young, plucky investors, who don’t have enough capital available to create their own diversified portfolio through more conventional methods. Think about mutual funds as a basket of different investments. Everyone puts the amount of money they want in, and the manager chooses where to invest that money. If the markets behave as the manager predicts, then everyone who chipped in gets a considerable profit margin back.