Investing can seem like the perfect way to make money. You buy some shares in something, the value rises, and you make money. In theory. In reality, there’s often quite a bit more to it than that, and if you’ve got no experience of investing or no knowledge of the markets or jargon, it can all seem very overwhelming.
Investing is a great way to make a passive income with relatively little effort. But, there are risks involved, and you certainly shouldn’t invest large amounts of money in anything that you don’t understand. There’s a lot to understand and think about. There are rules and laws, different terms to understand and many different ways that you can invest. Investing your hard earned money can be a minefield, and most of us are put off from even seriously considering it because we can’t face learning all about it. However, it is possible to make shrewd investments, and a lot of money, without being an expert.
Learn What You Can
Some people are great with money. They’ve got a good understanding of their own finances, they understand the markets, and they have a natural gift for investment. Other people, just don’t get it. They’re not necessarily bad with money, but they don’t understand it on a deeper level.
If you just don’t get it, don’t worry. Read up on the basics, learn online, and try to get a firm understanding of only the things that you really need to know. Don’t worry about the rest, but always try to learn as you go.
If you are keen to invest and have learned as much as you can, but still don’t feel confident going it alone, get help. Speak to an advisor, or use Robo advisors after reading Wealthfront vs Vanguard for tips.
When speaking to an advisor, be honest with them about your own limitations and don’t be afraid to ask questions if you need to.
Even if you’ve got savings and you want to make a lot from them, you don’t need to invest everything all in one go. In fact, when you are starting out, it’s a good idea to make several minimal investments in different areas. Monitor them, watch what happens, learn about your options as you go and see it as a trial. Use the opportunity to become more comfortable and confident.
Trust Your Instincts
When it comes to investing your money, like much else in life, you must learn to trust your instincts. Especially as you start to learn more about the markets and where your money is. Read up, learn what you can, ask for help, but learn to trust your instincts. If something doesn’t feel right, take a step back.
Never Invest More than You Can Afford
The key to being a successful investor is never spending more than you can afford. Even when you start to get better at it, and when something seems like a fabulous opportunity, stick to your budget. Remember, there is always a risk involved, don’t spend more than you can afford and try not to get carried away by any successes.