There are many ways to make money, especially in the digital world. And it doesn’t take rocket science to know that the two most popular ways to earn an income are through employment or operating a business where you sell products or services. But where does the extra income you earn go?
Of course, it takes thinking outside the box to create wealth, all of which starts from seeking ways to make your money work for you instead of working for the money. And so to speak, becoming a successful investor is among the best ways to be your own boss, but you need to get a few basics right when taking the plunge into investing.
Here’s a brief guide for beginners looking to get started in investing.
1. Start Early: The Earlier, the Better
The best time to start investing is now, if not yesterday. If you take the plunge while still young and productive, it’s a chance to snowball your account balance as your returns from the initial investment can always earn more profit.
It’s also one of the best ways to minimize financial strain and the stress involved in later years.
For instance, the $100 you throw into your investment account each month could easily turn into $20,000 or more over a few years to a decade when compounded. Nonetheless, this will largely depend on the investment option you pick, which makes it important to choose your investment option wisely.
2. Weigh Your Investment Options
There are numerous instruments to consider when getting started in investing, all with their own merits and demerits. For instance, a retirement scheme can be a great way to grow your wealth and protect your future in the golden years.
However, the options to balloon your investment returns might be a bit limiting compared to investing in stocks or equities. On the other hand, investing in rental real property may guarantee a certain (sometimes consistent) amount of income each month or year.
If you’re just getting started on investing, some of the decent options you can consider include:
- Stocks – You earn an income by buying and selling stocks, also known as equities or company shares. Stockholders also earn an income called dividends at the end of each year.
- Exchange-Traded Funds (ETFs) – ETFs are quite similar to ordinary stocks and mutual funds, only that ETFs allow investors to purchase and sell stocks at the listed prices on an ongoing/daily basis. The best thing about them is that the minimum investment requirement is often lower, making ETFs a suitable option for those just getting started.
- Bonds – Another fairly common investment instrument you can target, a bond is basically a “loan” to a government or corporate entity. By investing in bonds, your money is paid back after an agreed timeframe within which you earn a monthly or annual interest
3. Get an Investment Account
Once you understand the investment options available to you, the next crucial step is knowing who to approach, where to go, or the platforms to use to get your investment account up and running.
It’s even better if you can get an online platform that brings multiple investment opportunities closer to you.
While more than a few such platforms exist, not all of them can be trusted in terms of ease of use, cost-friendliness, reputation, and other factors. It might also take days, losses, and effort to find the right place to set up an investment account, but here’s a good example to reduce your frustration.
- A Sofi Invest Account:
So what is Sofi Invest, and why should you care? Well, it’s a beginner-friendly social finance trading platform that offers investors several options to pick from. Whether you’re interested in IPO investing, crypto, ETFs, active investing, automated investing, or retirement investments, it can be a good place to get started.
More so, their website provides a wealth of information on the different types of investment accounts and how you can get started.With these three tips, it becomes incredibly easy to get started on investing no matter how green you are.
You might as well consider taking a course on investment, finding a mentor, and borrowing tips from successful investors in your area of interest. Have a realistic budget for your seed or the money you want to get started with – and don’t be afraid to start small.