The best time to start investing was yesterday, but the second-best time to start investing is today. If you’re interested in starting your foray into investing, this article will help you find a starting point from which you can discover the perfect investment opportunities for you. To start investing, you don’t need to have an extremely large sum of money to invest — you just need enough to start your journey.
Set Goals
There are many different types of investments, so you should consider what you want out of your investments before you begin to invest your money anywhere. Make sure that you’re setting goals that are achievable based on what you’re investing — if you only have a small amount to invest, it may not necessarily be expected that you’ll make a large sum of money back from your investment right away.
Analyze Your Finances
If you’re looking to invest, the odds are that you have some money that you can spare. Make sure that you’re only investing money that you don’t need to survive. Do an analysis of your entire financial background, from salary to bills to debt, and consider what you can realistically invest.
If you want to start saving money to invest, try to start small. Below there are a few different examples of how much you need to start investing, so once you choose the type of investment you’d like to start with, you can set a savings goal. If you save just $10-$20 a week, that will add up to $500-$1,000 over the course of a year.
Figure Out Your Risk Tolerance
Investing comes with the risk of losing your invested money. If it were a 100% sure thing that you would get your money back, there would be many more people investing. However, there are different levels of risk based on the type of investment you’re interested in making.
Oftentimes, the higher the risk of an investment, the higher the reward is if the investment is successful. However, since it is a high risk, there is a higher chance that you won’t get your invented money back. On the other hand, something that is low risk will likely not end with you losing your investment, but it also will not yield the same dramatic returns as a high-risk investment.
Do Some Research
You’re already starting on this step by reading this article. However, this is a very broad overview of how to start investing, and you should definitely do more specialized research on the specific type of investing you’re interested in. Make sure that you have enough information to fully understand your investment before you begin your foray into the world of investing so you fully understand the investments you’re making and the level of risk associated.
Set Up Your Retirement
A retirement account, like a traditional IRA or a Roth IRA, is a great way to start investing. With a retirement account, you’ll be putting away a certain amount of money into your retirement account every month, and once you retire you will have that money on hand to live off of.
Diversify Your Portfolio
You’ve probably heard the phrase diversify your portfolio before if you have looked into investing, so what does it mean? Well, it breaks down to having investments in different industries and areas to ensure that you don’t put all of your eggs into one basket. For example, if you only invest in one company’s stock and that company has a scandal that lowers the value of their stock, you automatically lose money. If you’re investing in a range of stocks, you may still be able to break even on your investment if one of your stocks loses value since another may gain value.
If you’re very set on investing in one market, you should still invest in other markets as well to ensure diversity in your portfolio. For example, of the 84% of people who have invested in real estate and plan to do so again, there are likely many people who have investments in other markets. Although they had a positive enough experience to reinvest, that doesn’t mean that they are singularly investing in that market.
Keep Up With the Markets
Make sure that whatever you’re investing in, you’re aware of the climate around the market. If there’s a market that’s been growing for years, you may want to invest in that over one that’s stay stagnant or gone down in the more recent past. For example, the global solar market grew 29.3% in 2017, so you may want to invest in the solar market for one of your investments. If you didn’t know anything about the solar market’s growth, you might not know to invest in it.
Use an App
If you’re completely lost about where to start, try researching different apps that you can use to invest. Some 15% of all paper documents are lost temporarily, and 7.5% are never recovered, so using an app can help ensure that all of your investment info is in one place where you can never lose it. There are investment apps for many different types of investments, and some of them have lower initial investments than something more traditional, like a mutual fund. Researching different investment apps is a great way to start your research. Many are aimed towards helping new investors, so try to look for an app that will tell you more about your investment opportunities and what you can potentially get out of it.
Start Now
As soon as you’ve done enough research to understand the repercussions of the investment you want to make, it’s time to start investing. As mentioned in the introduction, the best time to start investing was yesterday. It takes time to see a return on your investment, so hesitating will truly not work in your favor in the long run. Starting small is better than not starting at all.
If you have money that you can spare, choosing to invest is a great way to ensure that your money is working for you instead of sitting in a bank going untouched. After you’ve done your initial research, it’s time to jump in and join the exciting world of