One of the major misunderstandings people have about investing is that it’s only for wealthy individuals. This may have been accurate in the past, but nowadays, the investment industry is committed to offering investment opportunities to people of all income levels, including beginners and those with limited funds to invest.
As a result, the notion that only the rich can invest is no longer valid. With so many investment options accessible to beginners, there’s no reason to avoid investing. This is excellent news because investing is an excellent method to increase your financial resources.
Why is investing important?
You may have encountered someone who fondly recalled how economical certain goods or services, such as petrol, used to be in the past. This is because the worth of money diminishes over time due to inflation.
However, by investing your money, you can effectively fight the effects of inflation and increase the likelihood of purchasing the same amount of products and services in the future as you can currently.
Investing allows you to make the most of your money by using the concept of compounding. With compound earnings, any profits are reinvested to generate additional returns. The sooner you start investing, the more you can benefit from compounding.
Is it your first time? These important factors to consider
Investing is simply putting your money to work for you so that it can grow over time. Think of it like planting a seed in a garden – you may not immediately see the results, but with time and care, the seed will grow into a beautiful plant.
Here’s a simple guide for beginners on how to start investing slowly:
- Understand the basics of investing: Before you start investing, it’s essential to understand the basics. This includes understanding the different types of investments, such as stocks, bonds, mutual funds, and real estate. Each type of investment carries its own level of risk and potential return.
- Set your investment goals: Before you start investing, it’s important to have a clear idea of what you want to achieve. Are you saving for retirement? A deposit for a house? A child’s college education? Knowing your investment goals will help you determine the right mix of investments for your portfolio.
- Start with affordable amounts: It’s okay to start small. In fact, it’s recommended to start investing with small amounts and gradually increase as you become more comfortable with the process. There is no point in over-extending yourself. As a beginner, if you want to start investing in the stocks and funds, you can start with amounts as small as €100 per month, and invest in a diversified portfolio of stocks.
- Invest in a diversified portfolio: Diversification is key to investing. It means spreading your money across different types of investments, such as stocks, bonds, and real estate. This will help reduce your risk and increase your chances of earning a return.
- Be patient: Investing is a long-term game. It’s important to remember that the value of your investments may fluctuate in the short term, but they will likely grow over time. If you want your money back in one or two years, this may not be for you. The money may be better in a zero risk account linked to a credit union with zero interest though.
- Educate yourself: Many resources are available to help you learn about investing. Read books, articles, and online resources to learn about different types of investments and how to make informed decisions about your money. It is really simple once you break it down. If somebody can’t explain it simply, they don’t know it well enough.
- Professional help: Firstly, investment professionals like us have specialised knowledge and expertise in investing. We can assist you in navigating the complexities of the financial markets, comprehending the risks and benefits of various types of investments, and pinpointing investment opportunities that align with your individual financial situation and objectives..
Secondly, we can provide guidance and support to help you make informed investment decisions. For example, we can help you create a customised investment plan based on your risk tolerance, time horizon, and financial goals and provide ongoing monitoring and analysis to ensure that your investments continue to align with your objectives.
Finally, we can help you stay disciplined and avoid emotional or impulsive investment decisions that could harm your long-term financial health. Working with a professional enables you to create a well-informed and strategic investment approach that aims to assist you in accomplishing your financial objectives over time.
Investing doesn’t have to be complicated. By understanding the basics, setting your investment goals, starting small, investing in a diversified portfolio, being patient, and educating yourself, you can begin your journey to financial freedom. Remember that investing is a long-term game, and it takes time for your money to grow, but with patience and consistency, you’ll be on your way to achieving your financial goals.
If you need any assistance regarding investment, don’t hesitate to contact us.