The Basics of Investing: A Beginner's Guide to Choosing the Right Investments | INVESTEDMOM
Investing is an important aspect of personal finance, but for many people, it can be intimidating and confusing. With so many different investment options available, it's hard to know where to start and how to choose the right investments for your goals and risk tolerance. The basics of investing can feel like, well…, not basic at all.
In this beginner's guide to investing, I'll cover the basics of investing the right way, and provide some tips for choosing the right investments for you.
What is investing?
Investing is like planting a seed and watching it grow. When you invest, you're using your money to buy something, like a stock or a piece of property, that you think will grow in value over time. As that thing grows in value, so does your money. It's like growing a money tree! But just like plants need sunlight and water to grow, investing requires time and patience. The longer you wait, the bigger your money tree can grow. So, if you want to be rich when you're older, start planting those seeds now!
Why should you invest?
Investing can help you grow your wealth and achieve your financial goals, such as saving for retirement, buying a home, or paying for your children's education. Investing can also help you beat inflation, which can erode the purchasing power of your money over time.
Instead of just keeping your money in a piggy bank or under your mattress, you can put it to work for you by investing it in things like stocks or real estate. As the value of those things goes up, so does the value of your money. Investing is also a way to help you reach your long-term financial goals, like buying a house or retiring comfortably. But remember, investing does come with risks, so it's important to do your research and be patient. By investing wisely, you can make your money work for you and help secure your financial future.
Why should you invest?
Investing can help you grow your wealth and achieve your financial goals, such as saving for retirement, buying a home, or paying for your children's education. Investing can also help you beat inflation, which can erode the purchasing power of your money over time.
Instead of just keeping your money in a piggy bank or under your mattress, you can put it to work for you by investing it in things like stocks or real estate. As the value of those things goes up, so does the value of your money. Investing is also a way to help you reach your long-term financial goals, like buying a house or retiring comfortably. But remember, investing does come with risks, so it's important to do your research and be patient. By investing wisely, you can make your money work for you and help secure your financial future.
How to choose the right investments
Choosing the right investments for your goals and risk tolerance is critical to achieving success as an investor. Here are some tips for getting started:
Determine your goals: Before you start investing, it's important to identify your goals and the time horizon for achieving them. Are you saving for retirement, a down payment on a home, or your children's education? Knowing your goals will help you choose investments that align with your objectives.
Assess your risk tolerance: Your risk tolerance is the degree of uncertainty or potential loss that you're willing to accept in exchange for potential returns. A high-risk investment may offer the potential for high returns but also comes with a higher level of risk. A low-risk investment may offer lower returns but also comes with a lower level of risk.
Choose your asset allocation: Your asset allocation is the mix of different types of investments that you hold in your portfolio. A well-diversified portfolio should include a mix of stocks, bonds, and other types of investments that are aligned with your goals and risk tolerance.
Consider fees and expenses: When choosing investments, it's important to consider the fees and expenses associated with each investment. Fees and expenses can eat into your returns and erode the value of your investment over time.
Monitor and adjust your portfolio: Once you've chosen your investments, it's important to monitor your portfolio regularly and make adjustments as needed to ensure that it remains aligned with your goals and risk tolerance.
By following these tips, you can start to build a well-diversified investment portfolio that aligns with your goals and risk tolerance. Remember, investing is a long-term strategy, and it's important to be patient and disciplined to achieve success.
New to investing? Read: How to Get Wealth in Your 20s: The Winning Formula. written by my friend, Jeremy Horowitch. You will learn the basics and be able to choose the right investments for your goals and risk tolerance with his tips. Start growing your wealth today.
You can also join the Wealth Builders Academy Membership and get access to a community of people on the same journey, learning how to become financially free and live an unrestricted life!
Stay Invested xx
Meet the Author:
Inge was born and raised in Cape Town, South Africa, and moved to Canada in 2010 looking for a better life. She always had an entrepreneurial spirit and started her first side hustle when she was 9 years old – selling fudge at school during lunch breaks.
It wasn’t until much later that she realized that saving isn’t enough to get ahead. She was always very interested in real estate, but saving up for a down payment was grueling and slow, and the demands of life kept getting in the way.
She started investing in herself and upgrading her skills while learning how to invest. She quickly became debt free and compounded her money at a staggering rate.
It wasn’t until she became a coach that she realized how significant an impact she can make in people’s lives by sharing her journey, learnings, and processes.
So here she is, advocating for everyone who is invested and wants to build their wealth, especially the mommas!