Explore these avenues to give yourself a foundation for success
So, you want to quickly learn about investing? What’s the easiest and best way to start?
These five tips will set you on the right path, so you can learn more as you delve into the broad and very exciting world of investing.
- Determine why you want to invest: How you invest depends on why you’re investing. Do you want to save for more education, a home, travelling, or your retirement?
The time horizons on each of those can differ, so you need to figure out how much you want to make, how much risk you’re comfortable with, and what the best path is for each your goal.
If you have a short timeline, you’ll need to invest more conservatively, so that you can protect the money you have and grow what you need. If you have a longer timeline, you can choose slightly riskier investments that may earn you more as you’ll have time later to conserve your capital.
Ask your advisor for tools to assess your risk tolerance as advisors regularly do that before they help you with your financial planning and investments.
Knowing all of these factors can determine what you still need to learn to begin this exciting journey.
- Read: Once you’ve determined your goal, timeline, and risk tolerance, start reading: books, articles, and stories about successful investors and how they achieved their goals.
Consider getting some paid subscriptions once you start honing in on the areas that you want to learn more about. But be wary of paid subscriptions promoted on social media as they may promise far more than they deliver. In fact, many of them may even be scams.
Reading everything you can will help you decide what kind of investing you want to start with. That could include investing in the stock market, exchange-traded funds (ETFs), mutual funds, bonds, alternatives such as agriculture, real estate, and cryptocurrency, or even socially responsible investment, such as climate change, that meet your personal goals and interests.
Take some time to read up on each of these to determine what excites you and what you want to learn more about to start investing in. They each have specific worlds. So, you may decide to specialize and do a deep dive into one or try out a few. Let your curiosity guide you.
- Find a mentor: You may already have a friend or family member who invests and can help you with some of the rudiments. You may also have joined an investment club. But, if you have, ensure you are learning from people with expertise as opposed to other beginners like yourself in order to set yourself up for success.
This is a great time to ask your financial advisor for some advice about to learn from. He or she may be able to share their expertise or refer you to someone in a particular niche that isn’t their expertise.
The more you read, the more you may come across other sources for finding a good mentor. But, if you don’t know the person, check out his or her credentials and ask around to see if anyone does. You want to learn from the best without leaving yourself vulnerable to scam artists.
- Take courses: There are a lot of seminars, online courses, and even live classes again where you can also learn from a teacher and have a guided learning experience.
Check the web. Find DVDs. Ask friends, family, and colleagues what they’ve heard of that might help you meet your goals.
Local school boards and colleges may offer continuing education courses that could provide you with the basics and even more advanced courses once you’re done those.
Ask your advisor for recommendations for your interest and level of learning.
Be wary of sales funnels that can suck you in, take your money, excite you during the course, and then leave you with a strategy that isn’t going to be profitable for what you want to achieve.
Some of the courses are free, but some can be very expensive. So, start with the basics, and work up from there as this is another area where taking the time to discern what you’re really interested in and researching where you can learn it will really pay off for your long-term education.
- Follow the stock market: Starting checking the stock market each day and read headline stories to learn about economic trends, third-party analysis, and general investing lingo. Check the web and T.V. business shows for stock quotes and follow your interests, even before you start investing.
The more you watch and follow what’s happening, the more comfortable you’ll get with the lingo and what the commentators and interviewees are speaking about.
Once you feel like you have a base of knowledge, you can even buy your first shares or practice trading through a stock market simulator. Don’t be afraid to start small – even trading one or ten shares will be educational.
If you’re not ready to spend your hard-earned money yet, check out stock market simulators to do some virtual – or paper -trading, so you can practice buying and selling stocks before you commit your real cash. But be careful: if you’re still new, start modestly, and then slowly work your way up to buying more shares as you learn more about this business and how you can benefit from investing.