This is a collaborative post by Ellie Jo about investing.
Investing is one of the most enticing things in the world for a lot of people. After all, it gives you the chance to earn extra money and use the money that you do have in a more productive and valuable way.
At the same time, it’s also something that a lot of people can find rather intimidating. The idea that a lot of people have in their heads about investments is one of massive earnings and devastating losses.
There are all kinds of technical terms that can often make it feel as though investing is something that’s only really possible for a chosen few people who really understand the whole process. Which raises the question: is it really possible for anyone to get started as an investor?
Well, the simple answer to that question is yes! In fact, investing has never been easier than it is right now thanks to things like the internet. Investing is no longer the preserve of the very wealthy and now it’s open to just about anyone. Of course, that doesn’t mean that it’s always going to be easy. With that in mind, here are just some of the things that you can do to get started as an investor.
Invest through your employer
If you’re on a tight budget or you’re completely new to the entire process of investing then there are few better options available to you than investing your money into retirement plans with your employer. Look into the kinds of retirement plans that your employer offers.
These plans often allow you to invest and save such small amounts of money that you won’t even notice it at the time. This might not seem like it would make all that much difference but over the years this is money that will add up pretty significantly.
This is especially true if your employer offers a retirement plan that matches your investments, essentially doubling the return on that investment. Another thing that makes this an excellent starting point for a lot of investors is that it’s extremely low risk when compared to a lot of other investment options.
This might sound like the most obvious thing in the world but if you want to start investing your money, you need money to invest in the first place. This is one of the things that keeps a lot of people away from investing as a viable option for them since it can be kind of scary to imagine gathering the capital that you may need for any investments.
However, it’s actually a whole lot easier than you might think, even if you don’t really have all that much experience with saving money at all. It can often be tempting to just spend your money as soon as it comes in, especially if you’re struggling financially.
However, by carefully budgeting your money you may well find that you have more money left over at the end of the month than you expect. Even something as simple as pausing every time you’re going to buy a coffee or get take-out and putting the money you would have spent into your savings can make a huge difference and will allow you to set aside the money you would need to start investing far more quickly than you might otherwise expect.
Mutual fund investments
If you’re looking for something closer to a one-time investment rather than making lots of smaller payments then one thing that you might want to consider looking into is mutual fund investments. Mutual funds are companies that pool money for a variety of different investors to invest in various stocks and bonds. In the past, mutual funds required a pretty large initial investment but more and more companies have begun to offer smaller investment options.
A single investment that isn’t too big can often make for an extremely cost-effective option. You’re even in a position to put yourself in the driver’s seat in terms of how much cost and risk you’re looking to take on when you invest. Another benefit of mutual funds is that they often involve automatic investing and can be done through payroll at work, making it incredibly easy to invest without taking up a great deal of your time.
Do your research
When it comes to investing, the phrase “a little knowledge goes a long way” is absolutely true. In fact, there really is no limit to the benefits of doing your research and coming to understand the process of investing.
Whether you want to learn forex trading or better understand the methods for diversifying your portfolio, knowing what your doing is one of the best ways to protect yourself from the potential risks and dangers that come with investing any amount of money.
It’s tempting to jump straight in without thinking when it comes to investing but that can often be a pretty dangerous option. It’s often far better to take things slow, start small, and do as much research as possible before you ever put down any money at all.
Do it part-time
One of the most common mistakes that can lead to people becoming discouraged with investing is the fact that they assume that they need to throw themselves into it completely in order to have any kind of success. Sure, the idea of potential profits from investment can be exciting, but the thought of quitting your job and doing it full time can be pretty scary.
It’s fortunate then that doing that really isn’t all that necessary. If you’re looking to start investing then one of the best things that you can do is to just do it on the side. Dip your toe in the water before you go diving in headfirst. Instead of putting all of your financial eggs in one basket, invest small amounts here and there.
After all, when you start out as an investor, you’re going to be inexperienced which means that you will likely make mistakes. Making mistakes is totally natural but the last thing you want if for that to happen with huge amounts of money. If you’re doing it part-time and only investing small amounts then you’re going to find it so much easier to recover from any potential failures.
Things like trading apps or penny stocks are a great place to start when you’re trading part-time until you find your footing and have the confidence and knowledge to start investing larger amounts and taking on more potential risk.
Of course, just because these things make investing a whole lot easier and more accessible than it has ever been before, that doesn’t mean that there aren’t challenges that you will face along the way. One thing that you need to remember at all times is that there is no such thing as a “risk-free investment.”
Anyone who tries to tell you that any form of investment is totally without risk is either tragically misinformed or they’re lying to you for their own benefit. But being aware of those risks and coming to understand the process of investing as well as possible is going to go a long way towards helping you minimize your risks. Starting in simple, small ways is always the best option so that you can find your feel without putting your finances at serious risk.
Investing has never been easier than it is in the modern world, but that doesn’t mean that you can be careless with the places where you put your money.