Starting to invest seems like such a daunting task for many people. It is a leap of faith into the unknown. You need to learn how to start investing for wealth success today. Investing is on the opposite end to the financial literacy scale. You probably have your handful managing your salary, understanding interest rates and budgeting. The little money that you have is precious and you don’t want to lose it on some unknown investment.
Investing is what you do when you are rich right? When you have some spare money? You can’t use your other money because once you have spent that you have nothing left. Before you know it you are midlife and suddenly you realise that things aren’t adding up. You still don’t have spare money and you don’t have enough for retirement. If only you knew how to invest.
Stop making excuses
The first trick to start investing for wealth success today is to stop making excuses. There is no reason on this earth why you should not start investing as soon as possible. You don’t have to be rich or earn a fortune. You just have to make a portion of your earnings available for this. Most people start investing with just a small amount of money.
You won’t earn money forever so you need to invest some now for later. You will achieve financial freedom if you are diciplined and invest a large portion (50%+) of your earnings.
If you don’t invest some money you will spend it all. This will continue so as you earn more you will spend more. Lifestyle creep will happen and years down the line you still won’t have money to invest. All because you had an excuse that you could not afford it. If you can’t afford it now then you never will. Now is the time to start.
You are missing out on an opportunity where your money could be growing in value over time. All you need to do is invest the money and allow it to grow. This is the best way to generate wealth over time without working or using your time
I don’t know how
When you don’t know how to do something you find out and learn how to do it. You need to learn how to start investing for wealth success today Information on investing and financial literacy is available everywhere. That said the best way to learn is to do. Especially with investing. When you have skin in the game you pay attention and learn quickly.
Lets be honest investing and finances is not the most exciting topic to learn. Problem is that besides your health it is probably the next most important aspect in your life. Money creates opportunities and buys you time, who wouldn’t want that.
Investing covers a range of options from stock and equities to property, bonds and commodities amongst others. Understanding investing and access to markets is so much easier than it ever was. Many people are able to manage their own investments and invest directly themselves. When you are starting out with little to lose then this is a great option. But still you need to understand what you are investing in, this is a golden rule.
Investing in the stock market in individual stocks doesn’t have to be complicated or costly. The internet changed that with online trading accounts. Index funds and exchange traded funds made it even simpler by offering a basket of stocks that track stock market indexes. This reduces the risk and provides low cost diversified options to gain direct access to the stock market.
The best time is now
It is always the best time to start investing. The reason is that the biggest secret to investing is compounding. You will hear this all the time, the earlier you start the better. Compounding works over a period of time, the longer the better. It is exponential so the true power of compounding starts slowly but accelerates the longer it lasts.
The stock market has provided the best return over time. Companies continue to grow as the world economy grows and progresses. This has been the trend over the long term. Despite the market crashes and depressions the market will recover and continue to grow ove rtime. The sooner you enter the market and stay for the long term the better.
There is no right or wrong way to start
Everybody starts their investment journey differently, but the common theme is that they started. Like with most things you start you don’t know anything until you start. That’s why it is called starting. Doing is the best teacher. Once you start you will have an interest and learn quickly.
If your company has share options or an employee share scheme then start with that. Maybe you like a company or brand and start buying their shares. If you have access to investments via your bank then start with that. In the end you will have many different investments and they will change overtime. So don’t think that there is only one and you must only choose the right one.
One thing that you should never start is investing in a get rich quick scheme. If it sounds too good to be true then it is. You must start with a reputable institution with a good track record. Find out what other established investors are using.
Places like Satrix and Easy Equities for example. Don’t be tempted by the latest greatest thing that everyone is jumping on. Rather start with a lower risk investment that is secured by a registered institution.
How I started investing
My first investment was in the days of government bonds via the post office. That was very small and didn’t materialise into anything significant. Then I took out an Old Mutual Endowment policy. I remember taking it out thinking that this was going to make me a fortune. Only to cash it out many years later for an insignificant amount of money. About 10 years later I bought my first stock.
I started with a few individual shares of companies that I knew a bit about in industries that I thought had potential. This was during the dot com bubble and global financial crisis. I experienced two market dips but still made a reasonable return on all my shares. However I realised that this was too complicated and time consuming for me. At the same time I had also started buying Satrix Top 40 on a monthly basis.
So eventually I switched to ETFs and that is all that I am doing now as far as equities go. The investment cost is very reasonable and I buy as much as often as I want. I am still directly invested in the stock market so I get the full benefit but obviously also have a higher risk.
Look out for my next article on how to start investing with index funds and etfs.