Don’t Buy Any Stocks Or Shares Until You’ve Read This
Just so you know, every single newbie investor is united by the fact they are in over their heads, so it is only natural that you feel that way too. The world of finance is a terrifying, intimidating and wholly foreign one. In fact, stepping into the stocks and shares arena is about as alien as trying to read hieroglyphics.
The important thing to realise is, well, there is no point worrying because every investor to ever make a buck felt the way you do now, and some of them have gone on to make millions. Armed with patience, the right temperament and the perfect knowledge, you can do the same.
Here are the most important things to understand when dipping your toe into the investment pool:
- Start Super Early
There is a little term called compound interest, which gives you all the reasons you could ever need to start investing today. Compounding makes it so much easier to build your wealth. Look at it like this: if an 18-year-old put $416 a month into a tax shelter of some sort, they would retire with $4,359,874 thanks to long-term interest rates. For a 40-year-old to achieve the same thing, they would have to put away $38,000 plus a year.
- Tailor Your Portfolio
Every single person that has any idea of investing will tell you the same thing: diversifying your portfolio is absolutely essential to managing your risk. However, what you need to learn is that your personal and wholly unique circumstances are the most important thing to consider when diversifying. This is because your unique situation will best dictate what you want to achieve in terms of financial objective, risk tolerance and timeline.
- Help Is The Real Secret
In order to get the best real-world returns, you need to be using an expert, no matter what. It could be using a qualified advisor to manage your affairs, it could be going to the best CFD provider, or simply signing up for a robo-advisor service. So long as you do this, you will have the best chance possible. Yes, it means taking on more expenses, which is why you should see it as another investment. Trust us, there is way too much evidence to argue this point.
- It Won’t Go Your Way
Not all the time. You are going to endure rough patches, and you will go through patches where the value of your portfolio drops by over fifty percent. All that effort and you will see something out of your control cut your rewards in half. It is infuriating. It is frustrating. It is horrendous. And yet it is something you cannot avoid. So get used to this and learn how to live with it. Asset fluctuation is a part of life. Real estate, stock markets, entire economies – they all suffer huge drops.
And there we have it, an introduction into investing for absolute newbies. Now, as you have probably gathered, this is by no means an extensive list (we’ve not even mentioned tax and asset protection strategies for heaven’s sake), but it should be enough to get you on your way.