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Investing Tips For Beginners

Investing Tips For Beginners

Those who don’t know anything about investing tend to fall into one of two categories: people who think it’s incredibly easy to get involved, and people who think it’s impossible to understand the first thing about investing.

Though you do have a lot to learn if you want to be successful when investing your money, it isn’t impossible to increase your net worth through the stock market. But it’s also not a get-rich-quick scheme, either. Before you dive into the stock exchange, there are a few things you should do and understand first.

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Set a purpose

Okay, so obviously your purpose for wanting to invest in the stock market is to make money. But why do you want to make more? How much are you willing to invest? How long are you willing to wait until your investment pays off? Like I said, you won’t start making money overnight, so it’s in your best interest to think long-term. Are you looking to pay off school loans or your mortgage? Are you trying to save for retirement? Or do you want to ensure you have some money saved up at the end of each year?

Once you set a goal, do some research regarding the length of time and the amount of money you’ll need to invest in order to reach that goal. Be realistic, and you’ll end up being much more successful.

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Know the risks

Investing your money in the stock market is definitely a risky venture, especially if you haven’t done the proper research. Even if you have done the research, there’s always going to be the possibility that you could lose everything due to factors beyond your control. You have to be okay with that. In other words, don’t put out more money than you can afford. Investing too much money leads you to make decisions based on emotions rather than logic, and will almost certainly lead to ruin. As long as you are comfortable with the possibility of losing the money you’ve invested, you’ll be able to make sound decisions that will benefit you in the long run.

Understand the basics

Earnings per share, return on equity, fundamental and technical analysis. If that sounds like a foreign language to you, do not put your money into the market just yet. Don’t just hire a broker and hand them your money while asking them to work their magic, either. You should have a full understanding of exactly how your money is being invested. Otherwise, you run the risk of being played by a broker with an ulterior motive. Understand the different types of investment accounts available for your goals, so you can have a good idea of how to make your money work best for you.

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Diversify

The most important piece of advice I can give you when investing your money is to never put all your eggs into one basket. Creating a diverse portfolio ensures that, even if one of your investments fails, you’ll almost certainly never lose all of your money. Diversifying your funds also allows you to set different goals for your investments. An investment in an ETF is much different than a gold IRA investment account in terms of the amount of time and money needed to be successful.

Use your own money

I previously discussed the importance of only investing money which you can afford to lose. Along with this, you should never invest money that you’ve borrowed from a bank or other service. Leveraging, or borrowing money to be invested, will ultimately destroy your profit margin once you take into consideration factors such as interest and brokerage fees. Not only that, but if you invest money that’s been loaned to you and the market crashes, you’ll still owe that money, with interest, to the entity you borrowed it from. If you want to experience true monetary gain through the stock market, use your own money, and only your own money.

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Featured photo credit: Grow Your Money / Chris Potter via farm9.staticflickr.com

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Last Updated on April 3, 2019

How to Nix Your Credit Card Debt in Less Than 3 Years

How to Nix Your Credit Card Debt in Less Than 3 Years

Debt is never a fun thing to be in. But, there are many actions that you can take that will help you rid yourself of the burden of debt once and for all.

By coming up with a set plan, eliminating your debt can feel much easier than constantly thinking about it.

This post will provide some tips on how you can do this to help you nix your credit card debt in less than 3 years.

Hint: there are ways that are easier than you think.

1. Consider Consolidating Multiple Credit Cards If Possible

This may not be applicable to you, but if you have multiple cards – it is something to consider. Keeping up with multiple bills is time consuming.

It will depend on the balance you have on each. Consolidate ones you can but do not do it to the point that you get too close to the maximum limit. Also, it is ideal to pick the card with the lower interest rate.

Consider if there are any fees or alternatively, rewards, with transferring a balance to another card. Watch out for fees. Note that some cards offer rewards for transferring a balance to them. This is extra cash that can help go towards paying off your debt.

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Having one or two cards can make nixing your debt much simpler than keeping up with the balance of a bunch of cards. Keeping track of paying the minimum towards a bunch of cards is time consuming. Spend the time to consolidate instead to make the overall process simpler going forward.

My tip: Have one main credit card. Have a second one that you use for necessities – such as groceries or gas – that offers rewards for those purchases (a lot of cards do) and set the second one on auto-pay. You should be able to pay off a smaller amount on auto-pay if it is a necessity. If you think you cannot, then you may need to cut down a lot on expenses.

Why do I suggest doing this? Having one thing set to auto-pay is one less thing to think about. One less thing to waste time on. Same idea with consolidating to one main card. Tracking down too many is a hassle.

2. Try to Pay the Full Balance You Spent Each Month at the Very Least

You need to pay off the amount you are spending each month when that bill comes in. This is the amount you spent THAT month.

Do not let the debt keep accruing while you work on paying any unpaid debt that has accrued. It will become a never-ending battle. Try as best as you can to be current on paying for each month’s expenses when that month’s bill comes out.

If this is a strain, consider why. You may need to cut expenses. Or you may need to consider other cards. Or look at where this money is going.

3. Pay Extra When You Can – Every Small Amount Counts

This cannot be emphasized enough. If you are looking at a lot of credit card debt, it can look daunting, but each extra amount that you can put towards the debt will really add up – no matter how small it is.

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It does not just reduce the principal amount that you have left to pay off, but it reduces the amount that is collecting interest. You will always save money with that reduced interest.

4. Create a Plan on How to Pay Extra

Back to the main point, having this plan is giving you one less thing to think about.

This plan should be a plan that works for you. If it does not work for you, your spending habits, and your views on debt, then it will not be an effective plan.

For instance, if a set plan of an extra $50 (or another amount that you know you can afford) works for you, then do that. Set that aside every month and pay that extra amount. Treat it like a bill. Choose an amount that works for you and pay it like clockwork as though it was a bill you had to pay each month.

Little amounts will not nix it entirely, but they will help tackle it and having a set plan can make it less of a chore. Creating a new plan of how much to put towards it each month is an unnecessary added stress.

5. Cut out Costs for Services You Do Not Use

If you are signed up for subscriptions that you do not use because of some free trial or for some other reason, cut it out. Your overall financial position will look better.

In turn, that will make cutting your credit card debt easier. Look at your statements to find these expenses. If you do not use them, you may forget you are paying some unnecessary amount each month. Cutting it out can really add up in savings that you can put towards other needed expenses.

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6. Get Aggressive About It

Consider these points:

Depending on the interest and the level of debt, you may need to give up a few indulgences. For example, instead of ordering delivery or going out to eat, cook at home. Everything adds up.

Other things may be more of a sacrifice. It may be a trip you wanted to go on, or a daily latte habit you’ve picked up. In these instances, consider how important it is to you and if it’s worth the sacrifice. And if it is a costly expense, think whether you can wait to indulge.

Cutting an extravagant expense can really help make a dent in your overall debt. Try not to add to debt when you are trying to pay it off. It will be a never-ending battle. Make it less of a battle with these tips and it will feel easier.

Bottom line: Do what you can to make this process easier for you. Implement steps that do this. It takes time now, but will help overall. Also, keep track of your spending and paying down of your debts. Which is the next point.

7. Reevaluate Your Progress at Set Intervals

Doing a regular check-in can help you see your efforts pay off or maybe indicate that you need to give this a bit more effort. If you check every 3-6 months, it will not feel so much like a chore or feel so daunting.

By doing this, you will be able to better understand your progress and perhaps readjust your plan. Bonus: if you see it pay off, it will feel great to do this check-in. You will get there.

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Finally (and most importantly)…

8. Keep Trying

Do not get discouraged. Pushing it off will make it worse. Just keep trying.

Once your debt becomes lower, each monthly payment will reduce the balance more. Why? You are paying less towards interest. It will be a snowball effect eventually and it will become much easier to manage. Just get to that point. And know once you do, it will feel easier and motivating.

Start Knocking out Your Debt Today

The best way to eliminate debt is to get started right away. Begin by implementing the above steps and watch your debt just melt away. Try out some of the above strategies and see what works best for you. Soon you’ll be on your way to a debt free life.

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Featured photo credit: Pexels via pexels.com

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