Are you interested in investing but don’t know where to start? If you answered yes, you’re not alone. More and more young adults are becoming curious about investing in their future, but there’s so much information out there that it can be overwhelming to take that first step.
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What is investing? Who is it for? And are there any risks? These are some of the important questions that I’ll be answering in this beginner’s guide. By the end of this post, you’ll be able to understand the basics of investing and decide whether or not it’s for you. Here are 7 basic things to know about investing.
1) What is investing and who is it for? Investing is the process of purchasing assets in the hopes that it will increase in financial value overtime. Anyone can start investing, especially since it’s being made more accessible for beginners.
2) What should I consider before investing? Some key things to consider before investing include your current budget, outstanding debts, financial goals, objectives, and risk profile. Are you hoping to retire by a certain age? What types of investments will help you meet your objective? Do you have an emergency savings fund that can assist you in the event of a loss?
3) Is investing for short-term or long-term goals? The answer to this question may vary, as there are many different types of investments you can make. However, investing is usually a better option for long-term goals such as saving for retirement or an education fund. It gives these investments the opportunity to be held for a longer period of time, therefore potentially generating a higher return rate.
4) Are there risks involved with investing? Yes, investing does come with the risk of losses. However, you can manage risk by doing your research and asking yourself beforehand if you’re able to handle these potential fluctuations. This goes back to question 2, in things you should consider before investing.
5) What types of investments are there? There are many types of investments to assist you in achieving your financial goals. The main ones including retirement plans, stocks, real estate, and cryptocurrency. Some popular investments in Canada include a registered retirement savings plan (RRSP) and registered education savings plan (RESP). A popular investment in the UK is exchange-traded funds (ETFs) and self-managed super funds (SMSF) in Australia.
6) Do I need to open an investing account? Once you’ve done your research and have decided it’s the right time for you to invest, you can then open an investing account. Depending on the types of investments you’d like to make, you can either open one through your bank with the help of an advisor, or online through popular companies like Wealthsimple and Questrade.
7) What else should I know? When it comes to investing, it can be an overload of information. It’s important to sit down and determine what you’d like to achieve for your financial goals. Don’t rush through the process, take your time, speak to as many people as you can, and always ask questions.
I hope this guide has given you some basic insight on investing. For those of you who are already investing, do you have any advice you’d like to share with beginners? I’d love to hear your thoughts. If you enjoyed this post, be sure to also visit my latest ‘6 Ways to Take Control of Your Financial Future’ here. For more posts relating to productivity, visit my tag here.
Great post with some excellent information for anyone wondering where to start with investing! I feel like there’s so much misunderstanding that really leads to young adults not giving it a try, which is a shame because it’s truly and investment in your future.
My biggest lesson? Over long periods of time, the volatility of the market evens out in a general upwards trajectory. I’m risk averse so I don’t pay attention to the day to day because it causes anxiety for me. But it’s good to know over years, the money will earn me money. Usually.
I agree, there’s a ton of information mixed with misinformation that it can be hard to follow. Thank you so much for sharing your experience and advice to beginners!
Your article is very timely. With high inflation and rising costs, your future self will surely thank you for investing and saving more now!
I’m glad you think so! We can always take the steps to set us up for success in the future. Thank you for reading Heidi!
I’ve always been scared of investing because I’ve heard of people losing all their money when the market crashes, but this post was really informative! Having a separate account just for investing is a great tip that I will follow in the future!
I feel you! It can be an overwhelming process with all the information out there, but it’s definitely worth looking into. Thank you for reading Winnie!
Investing is not everyone’s cup of tea but I have found it a better option than saving in banks with super low interest rates. Your advice is helpful.
Thank you Jaime! I agree, the banks do have low interest rates and I’m glad you’ve found an option that fits your needs.
Very informative post – exactly what I’m getting into at the moment. There’s still so much research I need to do, and this was a great starter.
Good luck Laila! I’m glad this was a good starter point. Thank you for reading!
It’s always important to check the risks before investing, after all, investing money is a huge risk and as much as it can be successful, it’s important to take the risks into account x
Lucy | http://www.lucymary.co.uk
Absolutely! When it comes to investing, always do your research and determine your financial situation, goals, and risks beforehand. Thank you for reading Lucy!
I agree that the sooner you start investing, the sooner you will reap the rewards. Just like Baby Boomer Super Saver, I invested in a workplace scheme in the 90s that I completely forgot about. I only ever paid in about £300. Well, let me tell you, it turned out to be the best three hundred quid I’ve ever spent. A few years ago, my ex-employer contacted me and offered me £21,000 (in fact a little over) to transfer it. I moved it to a cash pot, which basically was my safety net when I was diagnosed with breast cancer. It meant, I could literally relax and concentrate on recovering from all the treatments. I took 18 months out and had no financial worries. Good job I accepted the offer, the original scheme I’d been in went belly up.
Thank you for sharing your experience Belinda! That’s wonderful that investing sooner ended up being so beneficial in the long run. It truly is about setting yourself up for the future. Thank you for reading!
As Richie commented, the longer you wait to start investing, the more you miss out. So there is a big risk in not getting started. I had about $5000 in an old retirement account from a former job that I sort of forgot about. After about 20 years, it had grown to over $20k, without me investing another dollar. That is the magic of compound interest over time. Many years later, I started investing again at a different job. I started with just $5 per week. Start small if you have to, but get started.
Thank you for sharing your experience! I’m happy it worked out so well in the long run. I love your advice to get started, even if it’s small because it does make a big difference. Thanks for reading!
I find it interesting to have a guide about investing, as there are many scams and people being deceived, so these tips are very useful.
I loved the post.
https://beperes.blogspot.com/
Thank you for reading Brena!
Wow lots of helpful information here. I have not done a lot of investing just a wee bit. It does take a lot of research for sure and should be done with caution and a lot homework.
Allie of
http://www.allienyc.com
Absolutely, research is 100% a must! Thank you for reading Allie!
Ahh, this topic is so complex, and I just never feel motivated to learn more. Even though I probably should!
Thanks for the quick guide 🙂
Lots of love,
Krissi of the marquise diamond
https://www.themarquisediamond.de/
It can be complicated, but it’s definitely worth looking into! Thank you for reading Krissi!
These are all great tips! My husband and I were able to retire early because we invested early in our lives. And we’re reaping the rewards now!
That’s so wonderful to hear! Thank you for reading Wendy!
Such a wonderful post! These are all fantastic ideas! Thanks so much for sharing!
Thank you for reading Elizabeth!
This was a really helpful post! I’ve never invested before but it’s definitely something I’d be open to in the future when I’m in a better position to take those potential risks. I definitely think doing a lot of research is super important! Thank you so much for sharing x
Yes, absolutely! I’m so glad this post was helpful, it puts investing on our radars so we have an idea of what to expect when we do decide it’s the right time to start investing. Thank you for reading Ceri!
Hi Winnie,
Some useful information there for anybody new to investing. I suspect I’m a little (OK, probably a lot) older than you so have been investing for a while – based on my experience I’d say:
1. When considering risk, keep in mind that not investing can also be considered risky – you risk the value of your cash being eroded by inflation.
2. Start early, even if it is only relatively small amounts. The great thing about investment returns is the compounding affect – the value of your investments should snowball over time.
3. Obviously providers have to make an income for themselves but their fees/commissions can take big chunks out of your returns – make sure that you find a combination of service and fees that you are happy with. If you want lots of advice and hand-holding then that will come at a cost. If you are happy to DIY then look for low fees to reflect this.
Thank you so much for your thoughtful comment! You’ve provided some incredibly helpful tips. Investing can be risky, but I love that you’ve included how risky it is if we don’t! Starting small is also a great piece of advice, I think that’s what deters most people from investing because they believe they need to invest large amounts. Also finding a combination of services and fees that you are happy with is super important. Thank you for sharing your experience and tips with investing, Richie!
Thanks for sharing tips! Investing can be hard if you don’t know where to start.
I agree, it can be incredibly overwhelming at first. Thankfully there are so many great tips available, even through advisors! Thank you for reading!
Really helpful to read, great post! As a beginner investor it’s definitely important to do some thinking and research before investing!
Thank you so much Hannah! Research is everything, it’s so important especially when it comes to investing. Thank you for reading!