Investing is often thought to be an activity taken up by the wealthy and is often disregarded by everyday folks. However, the truth is that anybody can use investment vehicles to grow their money and secure a better future for themselves.
If you have savings available and are considering taking your first steps into the world of making investments, then read on. This simple guide will give you everything you need to get started.
Work out your budget
Never forget that when you invest your money, there are no guarantees. That means that when you are working out your budget, you have to be prepared to lose all of the money that you put in. The likelihood of that happening is slim – if you invest wisely. But you never know what’s around the corner, and all it might take is an unusual event to occur and the stock market could tumble, leaving you in an awkward financial position.
When you assign money, therefore, it is vital to use an overflow, rather than your everyday money. You should also have a healthy amount that you can access in a savings account. This will act as your buffer, should anything disastrous happen. We don’t mean to scare you away, but it is something that has to be made clear.
Decide on your needs
While some people make a living from their investments, most will use them as a way to grow their money over time and give them a bigger nest egg to retire with. You can also invest in your kids’ futures – a college education will cost a pretty penny. In general, there are a few rules to think about.
If you are prepared to play the waiting game and leave your money alone for ten years or so, then you should look into property investment or the best long-term stocks you can find. Although playing the stock market is usually seen as riskier than property, there are certain areas that are deemed safe.
Companies like Coca-Cola, for example, are often used as a good model for long-term stock investment. Like them or loathe them, they will always be around and have a global reach that protects them from the occasional disruptions that can cause share prices to plummet.
Get advice
The investment game isn’t as complicated as many people think, but it does take a lot of time if you want to reduce your risk to minimal levels. With this in mind, it isn’t something that you are going to be able to commit to if you lead a busy life.
However, you could hire a financial advisor to take care of your money. They will bring their expertise and knowledge of the various investment vehicles that are best for you, and help you from making expensive errors of judgement. And, as a beginner, there will no doubt be many of those!
You could also use a stock broker or a fund manager to help you spread your portfolio. As any successful investor will tell you, a healthy mix of investments is essential to reduce your risk. Using a fund manager will help you protect – and grow – your wealth far better than you will be able to. Especially if you have no experience!
We hope this has helped you make a start on your investment journey, and we wish you every success!
