The majority of people, love to invest while some are scared to give it a try because of the unforeseen thing that may happen along the way, the subject looks complicated and it requires a proper investigation before diving into it. The power to invest rests on every individual but it is should be noted that investing isn’t difficult and it isn’t magical you can learn how to invest. You are planning and saving for the future when you make the right decision.
the best way to invest is to get all the necessary advice from your financial advisor if you failed to do this, sometimes investing might go wrong and a perfect example of how something can go wrong is when you invested your hard earn money into Forex and you lose all at the end of the day, this is an unplanned event that can swift up your money.
It looks like the investing world is filled with regular and misleading information, in fact, most of the time people find it difficult to understand the technical jargon that comes with it.
The information given by some financial advisors might be contradicting, some we tell you real estate is the best, another will give you the advice to stick with Crypto while someone else will say why can’t you go for stocks or gold.
It becomes confusing and sometimes investors find it difficult to focus on a particular financial market, which results in losing the money invested and they are now left with regrets.
The complexity in this market will likely want you to find experts that can give helpful advice on how to invest and the best investment that is 100% safe, this will lead one through the jungle of finance.
Learning how to invest rightly will do a lot of good than bad, that why we say investing isn’t difficult, you can do it evening without the need for a financial advisor, you only need the basics and you are on your way to earning better investment returns.
- 1 Learn how to invest; it is not difficult to start
Learn how to invest; it is not difficult to start
Getting above-average returns is possible with a minimum of work and worry when you keep things simple, I know that sounds great right, Let’s learn how to invest.
Investing Rule #1: Get Started
The first rule and most important is to get started, there is no way to invest and make again without getting started. The amount you have right now shouldn’t be a barrier, invest it, and cultivate the good habit. There are many investment apps out there that make investing easier than ever.
The Random walk Guide to Investing, written by Burton Malkiel started that “Procrastination is the natural assassin of opportunity. Every year you put off investing makes your ultimate retirement goals more difficult to achieve.” Start with that little amount with you right now, success comes slowly; it is not possible to attain the highest peak level at once.
The junior high school math class explained to us if you can still recall, compounding investment generates more interest. A perfect example is if you invested
N 5000 at 8% annual return at the end of ten years you will have more than N 10,794.62
Can you see that the system is very powerful but it needs time to work like magic if you can give it time? The longer you wait to begin investing, the less time your money has to grow.
Investing Rule #2: Long-term investments are better
Looking into daily charts and following the trend won’t help you that much, when you invest, real investors project for the long term and leave it until the due date, when you do daily investment you are bound to make little or you don’t even make anything out of the market, the short term investment returns fluctuate and the smart investor doesn’t want it, they go for long term investment, do you why because they want to make the real money.
Smart investors, invest for the long term.
Long term investment takes time, some take years, as an investor try to always go for long time investment as these will help to build wealth.
Take for instance, when you invest in real estate, the investment if leave for long your returns will be high compare to the short-term investment in the same niche.
If you try the stock market too, it provides high returns over the long term, and risk is always minimal.
What your investments did this year shouldn’t give you more worries, what they’ll do over the next decade should be your priority. Don’t get panic in one year, and don’t chase after the latest hot investments. Stick to your long-term plan.
Investing Rule #3: Spread your investment Risk
In the financial world, putting money in one basket comes with a lot of riskss, it is better to go for different investments, when you buy stock, it is going to be better if you can also invest in real estate than buying two stocks at a time, what if something happens to stocks, your money is gone. All Investors reduce risk by owning more than one type of investment.
Mutual funds are one of the best ways to spread your investment risk; it is a collection of investments. Where people like you and me pool our money to buy small pieces of many companies all at once.
With Mutual funds, your investment diversification comes easily by letting you own shares in many companies at once.
Mutual funds are now popular because it offers great advantages to individual investors these days.
Investing Rule #4: Automate your investments
To take out all the human stress, you need to automate your investments, doing everything manually will take a lot from you, after you have set up your investment account, contact your company HR if you want to automate your retirement contribution using your employer retirement plan.
The downside is most company’s plans don’t accommodate index funds, then you need to do it yourself. If you plan to invest on your own and you’re just learning how to invest, you should pick just a company will be better than going for two or more.
Investing Rule #5: Keep everything simple
Index funds crowd everything up, in investing rule number 3, we said you should diversify into some other investment but not everyone will appreciate this, instead, they would want to go for index funds, this is an investment that guarantees same returns as stocks and mutual funds but comes lower risk, lower cost, and lower taxes than stocks and mutual funds. They offer a great advantage for individual investors who are interested in Index funds.
Many intelligent investors have concluded even Warren Buffett said that 99% of people should be investing in index funds, though there are different index funds from an investor can choose from. The bottom line is that you should keep things simple on investing, know what you want to invest on and know how many you want to have.
An index fund investing there is no particular right approach, however, it is simple as you can take as much time to decide on what asset is right for you, it then better to do proper research and educate yourself, as it gives you change to make changes later, pick one and get started.
Investing Rule #6: Focus by ignoring the noise
On your journey to knowing how to invest, you need to ignore a lot of noise that may want to discourage you. The news, and your friends, might want to be better of the noise, know how to silence them.
The best thing to do is to make a plan and stick to it, transform those plans into workable actions, and then see the magic as it works like fire.