So you have a little extra money at the end of the month and you are probably wondering what to do with it. You could stash it away for a rainy day, but what if you already have a rainy day fund.
That is where investing comes into play. This is a way to excel your money making potential and provide yourself a good retirement. You work hard for your money, so now it’s time your money worked hard for you.
This is purely my opinion and I am not a licensed financial advisor. Anything written on this blog should be taken for entertainment purposes only.
Why
Everyone has their own reason for wanting to start investing in something. Whether it is a catchy new business venture, a multilevel marketing pitch, or just buying a bunch of gold.
Before you start investing, you need to find out your why. My reason for investing is, I work hard for my money so that one day my money will work hard for me. This money will continue to grow over time with compounding interests and is perfect for long term growth.
Investing also provides the Financial Security that comes with knowing you will have enough money for retirement. You could even achieve Financial independence (FIRE) earlier with investing. The last and Main goal that I think a lot of people achieve with investing is wealth building, especially for their future generations.
Best Time to Start
There is a quote out there that goes something like “The best day to start investing was yesterday, the second best day? Today.” When you invest you start using this thing called compound interest.
Earning serious money on your investments takes time. Therefore you should start as soon as you can. On the other hand you need to make sure you actually have money to start investing. So if you have extra money at the end of the month then maybe it’s time to buy some stock with that money.
Investment Types
Stocks and Crypto both come to mind when people think about investments. But the investment world is a lot broader than we could ever imagine. I am going to go through the top vehicles for your money, and give a small description for each.
Stocks, when you think about stocks it’s just another way of saying you own a piece of a company. And as part owner when the company does well your money grows, if the company does poorly you lose money. Sometimes owning certain stocks will pay you back dividends which is a small percentage of the profits from that quarter.
Bonds are something that you purchase in hopes that it will “mature”. You buy a bond for let’s say $10 and in 5 years the bond will be worth $15. The government does this when they need money and you are banking on the government being able to pay it back in the future.
Real Estate Investments, range from simply owning property to managing a portfolio full of properties. A Lot of people use this as a way to earn wealth, and it is probably the easiest way to really grow your net worth.
Forex, Cryptocurrency, and Mutual Funds, rounds off the list. Forex is the foreign exchange market where you can earn money from the different currencies of the world. Cryptocurrency is a deregulated form of internet currency. Mutual Funds are something that you invest in that has multiple variations of stocks and bonds. It’s a good way to diversify your portfolio while still keeping it simple and easy for you.
Best Strategy for Beginners
When you are just starting out investing it can seem overwhelming. But the biggest thing that works to your advantage is you have me. And you have time. The first thing you need to understand is to only invest money you don’t need for your everyday life.
When you invest money it grows (hopefully) and when you are ready to take it out it usually takes a couple of days to hit your account. So never invest money you will need in a year or two.
If you are new to investing then you probably want someone else who knows more to handle those investments. This is the best way for a newbie. A Passive account is the best account because all you have to do is keep putting money into it and it will grow. This is done with having a financial advisor which I will go more in depth about on a later blog.
Rob’s World
The investing world can be cruel and rewarding at the same time. Statistically speaking the majority of people who invest in the stock market lose money. We don’t want this to be you. So talk to a financial advisor before you start investing. Then check out the other content on this blog.
