How To Start Investing Your Money
In today’s blog post, let’s talk about investing! Before we start, I want to note that I am not a professional financial advisor. I am sharing my advice about investing money from my own personal experiences. Because of this, I know how important it is to consider how an investment will affect your personal financial situation. Despite what anyone else may say about an investment, it is imperative to see how it plays into your own financial goals. My hope is that the information I share with you today can help you to make great choices in the future regarding your investments!
Investing 101
When it comes to beginning to invest, you want to start your endeavors with the end in mind. Set a timeframe for your goals – whether that be 5, 10, or 20 or more years, and think about your overall goal for that timeframe. Additionally, when it comes to making investments, you need to determine what the risks are, and if you are comfortable with them. For example, hedge funds and rental properties are investments that can carry a high potential for reward as well as a high risk. Take our current situation with COVID as an example – many people who rely on rental properties for income are facing loss right now. However, if someone is going into that investment with the knowledge that it may not be totally reliable, they may be able to come out of it okay. Nonetheless, despite it sometimes being risky, I am a huge fan of utilizing rental properties as an investment. People will always need a place to live – so this is an investment that can both cashflow for you as well as appreciate over time.
Let’s say that you have a lower risk threshold and are looking for a more stable investment. In this case, you can look to resources such as bonds, mutual funds, or even a 401k. The option that you choose really just depends on your personal circumstances, how the investments you select line up with your goals, and your risk threshold. If you’re willing to take on an investment with a higher risk threshold, then dabbling in the stock market might be for you. When it comes to choosing companies to buy stock in, choose five products that you use in your daily life that aren’t fad items, and invest in the companies that produce them. This way, you know you are preparing your investment to grow steadily over time. Most importantly, do your own research on whatever you are considering investing in.
If this is all overwhelming and you’re not sure where to start, I’ve compiled a list of super basic types of investments to start researching:
- Stocks
- Bonds
- Collectables
- Metals
- Mutual funds
- Currencies
- Real estate
Essentially, the pyramid of action for your financial future should protect the wealth you already have as the base, then look to future income, and then appreciation of your wealth at the very top. I hope this advice has brought you some clarity on how to start successfully investing your funds. If you have any questions, feel free to leave them in the comments below and shoot me a message – I’m always glad to help!
