Do you want to make more money?
Have you decided to start investing your money? Do you want to get in on what everyone is making from stocks, bonds, and other investments? Do you have any clue where to start?
How to Start Investing for Beginners
You’ve come to the right place if you’re a brand new investor or have only a limited knowledge. Investing for beginners can be very confusing if you don’t have the right instruction and steps to follow.
If you don’t know anything about investing, start with the basics. Use this step by step plan to improve your knowledge and help you determine the best investments for your portfolio.
A beginner can be someone with absolutely no knowledge at all Looking for the Blog? Click here.
It doesn’t matter where you’re starting at this point because I’m going to walk
you through the basics. Soon you’ll be able to start researching and making investments all on your own.
How to Start Investing
Here we will go step-by-step through the process of investing for the absolute beginner. Take it slow through the course to ensure that you understand how to invest money and what to do when you start.
Step 1: Get Your Finances in Order
You won’t reach your investment potential if you don’t have your finances under control. Check out our Personal Finance Guide to learn how to manage your money, set financial goals, and maximize your investment potential.
Whether you haven’t started investing yet or you’re just getting your finances in order to start, there are many tools that can help you along the way. Here are some finance and investments tools that will help you get your money under control. When you’re confident and prepared in your finances, you’ll feel the same way with your investing. Plus, you’ll have more money to invest.
Step 2: What is Investing?
Investing is when you put your money somewhere with the expectation that you’ll get it back and then some. You might:
- Lend money to a company by purchasing a bond expecting to be repaid with interest
- Buy stock in a company hoping the price will go up in the future so that you can sell it for capital gains
- Buy a house or building and rent out apartments for regular rental income
- Purchase gold or silver and sell it later on when the price is higher
Learn more about what investing is here. Learn about the risks and rewards of investing in general.
Step 3: What do You Want to Invest In?
There are many different types of investments and ways to invest in them. Some are very complicated and take a lot of studying to understand. Others are much simpler. Complication doesn’t make an investment better or more lucrative. Many investments do very well sticking with the simplest securities.
Stocks and bonds are two commonly known investments that most people are familiar with and some know how to invest in. Stocks are equity investments and bonds are debt investments. Bonds are typically less risky than stocks, but stocks often earn more. However, these are not hard-and-fast rules. There are definitely bonds that are much riskier than some stocks.
Other types of investments include:
- Mutual funds
- Real estate
- Foreign currency
- Certificates of Deposit (CDs)
In order to help choose which type or types of investments you want to start with and learn how to invest in, you need to learn more about them. You also need to learn how to get started with each security that you choose to go ahead with. Below you will find individual courses that will better explain each security in more detail. Click each one to explore further.
Step 4: Education
If you’re trying to find out exactly where you should put your money as a beginner, you won’t find it here. Every investor has different needs and circumstances that may result in vastly different investment choices. There isn’t a best investment for beginners in general. Some securities are easier and may fit better for beginners just starting out, but ultimately, you need to make the final decision. You need to understand risk and reward as an investor. When investing money for beginners, it’s important to find a balance.
Education is critical if you want to be a great investor. Here at BIB, you’ll find lots of great information to get you started. We are constantly expanding, so please bookmark the site and check back often. You can also subscribe to our blog feed above. Also, pick up a copy of How to Invest $50 to $5000 and Investing 101 for a more comprehensive dip into the world of investing. Each of these books are a great starting point.
Step 5: Get a Broker
If you’re going to invest in stocks, bonds, options, or other types of securities such as these, you will need a broker. A broker is a financial firm that purchases the securities for you on your behalf. For example, if you want to purchase 100 shares of McDonald’s, set up an account with an online broker and put in an order for a trade for 100 shares. They will complete the process and you will be an owner.
These days, online stock brokers make investing very affordable and incredibly easy, especially for new investors like you. Set up a brokerage account now to be prepared now for future investments.
Step 6: Take the Plunge
Once you you feel comfortable in the knowledge you have acquired and know how to invest, take the plunge and start investing. The sooner you start investing, the more money you’ll make because you have more time on your side. Time is an important aspect of investing that you should not overlook.
Invest on a regular basis. If possible, take money from each paycheck and put it toward more stocks, bonds, commodities, CDs, or other investments you’re prepared to make. You will reach your financial goals much faster if you make investing a habit.
Many brokers offer automatic investment plans to help you make investing a habit. Take advantage of these savings features.
Step 7: Maintaining and Building your Portfolio
So now you know how to invest, you’re taking action, and you’re making some money. Now what? Do you just leave your cash to sit in investments and grow? How can you be a proactive investor?
There is a lot more to investing than just understanding each individual security. You need to know how they can coincide in your investment portfolio. Learn how to build a strong portfolio that works well for what you need.
- Diversification – Diversification will help reduce the risk in your portfolio. Learn about what it is, why it is so important, and how to take advantage of it.
- Asset Allocation – Asset allocation is a part of diversification, but it’s more than just spreading things out. Find out what else you need to maintain a strong portfolio.
- Keep Learning – Never stop building your knowledge. Watch the news and read the paper to stay up on important financial news.