Often, you hear people reminisce about how cheap things used to be in the past. While this might seem true on the surface, the fact is that things have not become more expensive today. Rather, inflation has depreciated the value of money over the years.
So, if you’ve been saving your money under the mattress or in a savings account, it’s time to reconsider and think how to invest for beginners. The best way to save for the future is to invest, as this will prevent your money from losing value over time due to inflation.
When you invest your money today, it gets to work for you, thanks to compounding. Simply put, compounding is when any investment returns are reinvested, thereby earning more money. You should invest in a professionalplatform like Viva Capital Management.
Let’s now take at how to invest money for beginners:
Contents
1. Decide What Type of Investment to Make
If you have set aside some money for investing, the first thing to do is determine what type of investments can help you achieve your financial goals. There are many types of investments, but the most common ones for beginners are:
Stocks
Investing in stocks can prove to be an excellent idea since it earns you profits from a publicly-traded company. When you buy stock, you become a part-owner of the company whose stock you bought. As such, when the company makes profits, so do you, and when its value increases, so does the value of your stock in it.
Cryptocurrencies
Cryptocurrencies are a form of digital currencies and have been the hot topic over the past year or so. The value of cryptocurrencies such as Bitcoin and Ethereum has grown exponentially in the last decade, making it a very ideal investment prospect. People who included cryptocurrency into their investment portfolios have already recorded massive returns.
Investment Funds
An investment fund offers a wider choice of investment opportunities, greater management expertise, and lower investment fees than you can get on your own. The different investment funds are mutual funds, exchange-traded funds, hedge funds, and money market funds.
2. Identify Your Strategy & Learn How to Invest Your Money Well
As a beginner investor, there are tons of investment strategies to consider. Value investing is arguably one of the best strategies out there since it allows you to purchase valuable companies for way less than they are worth, thus guaranteeing you great returns along the way.
Feel free to explore other great investment strategies to discover what works for you.
3. Open a Brokerage Account and Track Your Portfolio
After deciding your investment approach, you need to open an online brokerage account. An online broker allows you to trade investment securities and provides you with the resources and education you need to make the best investments.
Here are some great brokerage services you can consider:
- Merrill Edge
- E-Trade
- TD Ameritrade
- Ally
- Fidelity
Make sure you keep track of your investment securities. Note, you can always sell your securities if you feel they are underperforming, but many experts advise that you hold your positions for a long time.
Start Investing to Build Wealth for Your Future
If you are keen on investing your money, implementing the three steps highlighted above is a great place to start.
Be sure to conduct enough research on your own to ensure that you adopt an investment style that suits your profile. More importantly, don’t forget to consult an expert if you feel that you need professional help with your investment.