It’s no secret that getting started as an investor can be quite intimidating. Not only are you unsure of the success and security of the venture you are putting your hard-earned money in, but the thought of losing your money in case everything goes sour is more devastating. Having little or no knowledge combined with the fact that you are putting your money at risk is often enough to scare you from achieving your financial freedom.
However, it’s worth noting that the best and most successful investors were ones like you. They had to start from somewhere since it has never been too late to start learning the investment curve and planning for the future.
Learn the Basics of Investing
Just like knowing the basics of running a successful business, you shouldn’t rush into investing without gathering enough knowledge on the basics of investing. Some of the most important things to identify include your investment goals and knowing what the process entails. There are many things to learn about investing. However, at the least possible level, investing is all about spending $20 worth of value on something worth $10. When you can invest your money and double it shortly, then you’ll have attained the basic goal of investing.
Identify Which Type of Investor You Are
There are three main types of investors. Before deciding to start your investment journey, it’s paramount first to identify which category of investors you fall in. Let’s take a look at these types of investors in detail.
Also known as active investors, DIY investors are always hands-on. This means that you will be required to not only invest, but do all the investment research yourself. At the same time, you will have to keep a close eye on all your investments at all times.
While this can mean that you have complete control of your investment portfolio, being a DIY investor also means that you have to spend a lot of time on your investment.
If you don’t have enough time on your hands, you can always go for passive investing. These types of investors will often use tools such as Robo advisor to manage their investments. While such tools will do all the work for you, there are numerous disadvantages to being a passive investor.
Relying on a Stock Advisor
Essentially, this type of investor will do the job while depending on a stockbroker for all the advice. To be such an investor, you will have to sign up for a stock picking service, which means putting more money in your portfolio.
Decide How Much to Invest
Two main factors will help you determine the amount to invest. The first is your investment goal, and the second is the duration of time you need to reach your investment goal.
If your investment goal is retirement, you should start by investing between 10% to 15% of your total income into your retirement account. While this might sound unrealistic, your investment goal is attainable. Regardless of the type of investment you want to make, having a clear plan on the amount you want to invest will go a long way in making your investment a success.
Determine Your Level of Risk
Although the core aim of any investment is to make profits, you should always anticipate incurring some loss along the way. This is not to say that making losses is allowed. However, you can still mitigate these losses by determining the extent of risk you are willing to take. By doing this, you will be in a better position to make profits from your investment.
If you choose to invest with a broker and suspect foul play on behalf of the broker or the brokerage firm, stock loss attorneys such as Attorney Stuart Meissner are important in ensuring that you and your investments were not taken advantage of, at least not without reparations.
Invest Your Way to Financial Freedom
Although getting started in investing is a daunting task, it’s important to know that reaching your financial freedom is not unattainable. By following the above tips, you can be sure to have a smooth start in your investment journey.