The Newbies Guide to Investing provides guidance to the first time investor as the idea of investing money can be very scary for someone new to the field. It’s easy to become confused, overwhelmed and even scared. The fear of ‘losing it all’ is very real for first time investors and the fact that the Internet seems to be filled with conflicting advice – and an awful lot of rather suspicious looking ‘get rich quick’ schemes makes it an even more daunting prospect.
However, as sensible financial investments really are a key way to secure your financial future allowing these doubts to stop you from finally getting into the investment ‘game’ it’s a real shame. Here’s a look at some of the things newbie investors can – and should – do to make the experience profitable – and maybe even pleasurable -right from the start.
The Newbies Guide to Investing
Understand That Investing Is Not Gambling
One very popular argument against ‘ordinary’ people getting into investing is that investing is ‘just like’ gambling. However, although investing can be ‘risky’, the risks involved are very different to those involved in gambling.
A share of common stock is ownership in a company. It entitles the holder to a claim on assets as well as a fraction of the profits that the company generates. Too often, investors think of shares as simply a trading vehicle, and they forget that stock represents the ownership of a company. A company whose performance will directly affect the value of the stock. A value that can be influenced. And determining which company’s stock is likely to perform best is certainly a skill. A skill that can be learned, but a real skill indeed.
Gambling, on the other hand, is a ‘zero-sum’ pursuit. Money is taken from one party (the loser) and given directly to another (the winner) No value is ever created and the whole thing is down to luck. Basically investing and gambling are completely different things, so this argument/myth is completely invalid.
The Newbies Guide to Investing
Start Slowly
Putting a lot of money into your very first foray into the world of investing is not only a frightening concept but it is not a very smart one either. You should only invest money that you could afford to lose. Betting next month’s bond payment on a hot stock tip you found online will almost always end in tears.
To this end, you should understand that it is okay to start small. As you learn more about investing and how it works then you will hopefully begin to build the wealth you need to invest more and to do so in higher risk financial investments that offer a larger gain. But never risk your basic financial security for today.
The Newbies Guide to Investing
Educate Yourself and Don’t Be Afraid to Ask For Help
It really cannot be said often enough: as a first-time investor you need to educate yourself, keep learning and take advice from those who have gone before you. Never go into anything that involves your money without doing due diligence first.
Chances are that you don’t even spend money on a decent meal out these days without checking the restaurant’s reviews right? The same goes for investing. There are more great resources available to the ‘ordinary’ newbie investor than ever before, so take advantage of them every chance you get.
The best advice we can give is to speak to an Investment Consultant particularly as a ‘Newbie to Investing’, do it today and start earning from the professionals.
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