The Ultimate Guide on Investing for Beginners
So, you have never ever invested your money in shares, funds or any other financial instrument? Are you planning to kickstart your new journey as an investor? Don’t know how to start and where to invest? If so, then this post will serve you well. Here, we strive to provide a 101 guide of investing for a beginner. So, settle down and read!
Earning and accumulating the wealth is one thing, while growing the wealth is another. However, growing the wealth is important as that allows one to achieve financial stability. This wealth can be beneficial for people to tackle unforeseen difficulties and during the retirement phase. However, getting started as a beginner could be potentially daunting. Before we dive into the discussion, let’s first understand the basics of investing.
What is investing?
The definition of investing may vary from one person to another. Investing simply means how you take charge of your financial security. Besides growing your wealth, it will help you generate an additional stream of income that can support you in your retirement phase.
There are different kinds of investment options like stocks, ETFs, bonds, or real estate, etc that will provide either growth or income or both. Some people invest with an aim to achieve profit and multiply their wealth in short span of time, while some people invest to reap future benefit.
However, in this context, investing can be defined as “putting money into a financial product, shares, property, or a commercial venture with a desire to attain a significant amount of profit”.
Investing for beginners simply means committing capital to different types of assets with the expectation to generate profit from these in the future.
Why Investing is a great option?
There are several perks of investing. Hence, you should start investing as early as possible. Here are some points that accentuate on the importance of investing for beginners:
- Higher Returns on Investment (ROI)
Investing funds in an asset involves a transaction. The investor does not use the funds in the present to meet his current needs and rather, he puts his money in a financial instrument for some higher utility in the future.
- Investment in stock can lead to returns through two ways – one could be through capital gains and one could be through dividends.
- Investing in a bond may benefit the investor in the form of regular payouts or coupons.
- An investor can benefit from investing in real estate through capital gains and rental income.
- Retirement Plan or FIRE
There’s no arguing with the fact that most people take interest in investment solely for retirement purposes!
As most people rely on their salary to fulfil their lifestyle needs, it becomes potentially daunting to sustain their lifestyle post retirement. Hence, investment can prove as a better alternative to people looking to retire with ease. So, everyone must consider investing a part of their income to ensure they must get all they need in their retirement years.
- Tax Efficiency
Those who invest consistently are able to save on taxes. The government has reduced their attention towards funding their citizens’ retirement years, however they have created various accounts that can be funded by the citizens to support them in their retirement phase. Hence, investing could be helpful in saving taxes as there are accounts such as RRSP, TFSA, 401k, Roth IRA and others.
- To Beat Inflation
If you want to beat inflation, investing is necessary! If you think you won’t invest money and leave it in your savings account, the money will decline as the inflation will eat away the value of your money.
Nowadays, the education and healthcare expenses are increasing much faster than reported inflation. In such a scenario, you should aim at growing your money so that you can live stress-free in such periods. Investing is the best option to keep you prepared for the unforeseen events.
- Reach Your Financial Goals
When it comes down to achieving financial goals, there’s nothing better than investing!
When an individual grows through life, there are needs that generally arise. And one of the basic needs is buying a house. Even if a bank or any third-party funds a house through a loan, then it will require a significant amount of down payment. When you invest through a mix of assets, you can easily build up the corpus needed for the down payment. Similarly, you can accumulate wealth to meet your other financial goals.
How to Get Started: Investing for Beginners
It can be tedious and confusing to start investing as a beginner. However, if you follow the right steps, it’s a cakewalk.
Here are some ideas on how to proceed investing as a beginner:
- Start crafting your investment plan: Yes, there’s no point to start a journey if you don’t know the destination! Hence, you should have a goal to achieve and according to that you can plan. However, invest according to your appetite. Make sure to evaluate how much capital you actually want to invest.
In fact, you must also plan the ways in which you will invest regularly. And it depends on you, whether you are planning to make weekly or monthly contributions.
- Start Tracking: Make sure you begin tracking all the expenses related to pursuing your education in investing. Investing is going to a part of your life, so it is incredibly important for you to keep a record of your expenses. This would ultimately help you to maximize the profits.
- Choose the Type of Investment: After going through point 1 and 2, you should then research to get a fair idea of what type of investment you really want to pursue.
Let’s take an example to understand!
If you are considering ETFs, make sure you check out the information and analysis websites that will help you learn about ETF investing.
- 4. Keep Investing: There’s no secret to benefit from investing. Learning about investing for beginners could be potentially daunting and it can never be done in a day. Just learn gradually and keep investing to see what works for you and what doesn’t.
Make sure you just relax and don’t think too much. Just keep learning and investing! And the best part is that when you enroll in the “school of investing”, you are likely to earn your high school certificate in “making a significant amount of money”. You can also take professional help and consultation from Wealthface.
How Wealthface can investing for beginners a Lucrative One?
As a beginner, do you want to generate more profit with minimum knowledge? If so, you’ve reached the correct destination!
Wealthface is a one-stop online investment company that helps all kinds of investors, irrespective of their age group, location, financial status, gender, and more. With extensive experience and expertise, we provide high-quality investment services that perfectly cater to each kind of investor in a fully transparent manner.
With a dedicated and experienced crew of financial advisors, we are always here to assist you so make you can make your investment for a beginner the right one.
To know more about us, visit wealthface & make the best investment for beginners, today!
