Advertising
Advertising

Warning: These 4 Steps Will Make You a Confident Investor

Warning: These 4 Steps Will Make You a Confident Investor

It’s a whole new investing ball game folks.

Even just a few years ago, your odds of being able to start investing with as little as $100 were as good as a pig not rolling in mud after a storm.

Sure, people have been writing about investing with $100 for years.

But the knowledge needed to pull it off properly was crazy. And the emotional and practical obstacles to getting started were scary.

Not anymore.

If you’ve always wanted to hit the start (or restart) button on investing, here’s how you can do it with $100.

Is This You?

Let’s be honest.

Most folks believe the investing myths that abound everywhere you turn. I’m talking myths like:

Advertising

  1. Getting started with investing isn’t necessary if you eventually make enough money
  2. Investing with small amounts has no benefits
  3. You need thousands of dollars (or more) before the investment company gatekeepers will let you in
  4. People who don’t know a stock from a bond or how “The Market” works should stay away
  5. You should pay off all your debt – regardless of the terms and interest rate – before investing
  6. The best returns for a solopreneur or small business owner are always reinvesting in your business

There could actually be some truth to these myths in certain scenarios. I should know since I worked in the investment industry for a decade. But people who these myths apply to probably don’t look and act like you and me.

Every day, a new barrier to investing with small amounts is being invisibly broken down. So, if you’re determined to have your purchasing power grow faster than taxes and inflation constantly devour it, you should be investing now.

Know the Breakdown

Many people get stuck with investing because they feel they need to know the perfect investment before starting.

Here’s a secret everyone should know:

There is no such thing as a “perfect” investment. There are only suitable or appropriate investments, some of which you might already know about.

You could get tips from Warren Buffett all day long or even incredible education in less than two pages, but the fundamental process can be the same for everyone.

Here’s the breakdown to get you moving, educated, and joining a new generation of confident investors.

1. Answer Some Initial Considerations

Advertising

You don’t need to know every investing definition, process, and principle before starting.

But you do need to know your investing goals up front. Beyond ensuring your purchasing power is keeping up with the hidden bite of taxes and inflation, do you need money to pay for higher education, retirement, a future wedding, a new car, or that vacation you richly deserve? Answering this question will determine the account structure you need to pursue these big goals.

You should also consider how much to invest initially and periodically, especially if you have debt or are self-employed. Do this based on more than just financial analysis though. The health, emotional, and mental angles are essential too.

2. Choose an Investment Account Type

You could open a limited partnership, futures, or foreign currency account (among others). However, the newly empowered investor probably will find them too complex, too expensive, and too risky.

Instead, base your selection on the answer to this core question:

Do you want to invest with a focus on retirement, higher education, or something else?

If retirement, pick among retirement options like an Individual Retirement Account (U.S.), Tax-Free Savings Account (Canada), or Individual Savings Account (U.K.). If higher education, choose among options like a 529 College Savings Plan (U.S.), Registered Education Savings Plan (Canada), or Junior Individual Savings Account (U.K.). If retirement or higher education doesn’t suit your needs, the plain vanilla account is a great option.

Advertising

3. Select an Appropriate Investment

Remember there are no perfect investments for you, only suitable or appropriate ones. And among all the investment types under the sun, picking one between stocks, fixed-income (i.e. bonds), mutual funds or Exchange Traded FundsReal Estate Investment Trusts (REIT), and commodities will generally be appropriate for most people.

Just make sure you first understand core investing principles like risk tolerancediversificationliquidityrate of return, and keeping costs low before making a choice.

Filters and screening tools can be your best friend here, so use them liberally.

4. Picking an Investment Company

It starts getting easier now because your choices of account structure and investment type aren’t offered by all investment companies.

Separate from each investment company’s online functionality, support methods, and pricing model, the core decision point will be how little money the company requires to open an account and invest in specific securities.

Consider signing up for automated periodic investments to further decrease the minimum balance amounts required if otherwise too high. Just about every country has investment companies with no minimum balance amounts for certain investments or minimum amounts as low as $100.

Advertising

Tools at The Motley FoolFindTheBestFinancial Highway (Canada), and Money.co.uk (U.K.) can be really helpful.

Boom! You’re Investing

After the account is opened and you’ve placed your first trade, you’re rocking and rolling as an investor. Your investment balance might be small-time, but you should feel big-time confidence that your money can now grow to pay for your future needs.

Plus, it feels awesome to fight back against the ever-present grip of taxes and inflation.

When you act on these steps, your mind and spirit will thank you for liberating your time, money, and talent. Your pocketbook and bank account will thank you too.

So what’s it going to be folks? Commit to getting started (or restarted) with investing and let us know when it’s happening in the comments!

Featured photo credit:  time is money via Shutterstock

More by this author

Warning: These 4 Steps Will Make You a Confident Investor Your Best Weapons Against Buying Crap You Don’t Need Why Chasing Money Is Worse Than Dogs Chasing Cars

Trending in Money

1 25 Easy Tips on How to Save Money Fast 2 What Is a Good Credit Score (And How to Get One) 3 9 Millionaire Success Habits That Will Inspire Your Life 4 10 Reasons Why Following Your Passion Is More Important Than Money 5 How to Pay off Debt Fast Using the Stack Method (A Step-By-Step Guide)

Read Next

Advertising
Advertising
Advertising

Last Updated on June 26, 2020

25 Easy Tips on How to Save Money Fast

25 Easy Tips on How to Save Money Fast

“How to save money fast?” This is the question asked by all of us not in the top 1% of rich people.

If you are looking for ways to drastically reduce your expenses immediately, first look at what you need to spend money on every week. And I mean really need.

You don’t really need to order in food. You don’t really need to buy expensive perfume.

Building from that, you can work out how your regular expenses can be reduced.

As for irregular expenses, they can also be deceptively costly in the long run. Once-off buys can also be tackled with some prudent planning and a little extra research.

And remember: a budgeted lifestyle does not mean a bad or boring one!

But first, understand what budget you can cut down on daily:

  • Regular expenses for the average adult (can be trimmed but not eliminated):
    • food
    • rent/mortgage
    • cell phone
    • insurance
    • socializing/entertainment
    • transportation
    • hygiene products
    • household bills
  • Irregular expenses for the average adult (can be eliminated or cut down a lot):
    • travel
    • clothing
    • medication (*depends)
    • grooming (hair, nails etc.)
    • gifts

Now, let’s dive right into the 25 ways to save money fast:

Save Money on Food

1. Bring a stock of food to the office/work

Instead of popping out for an overpriced salad and a smoothie, leave a set of basic utensils at the office as well as a stock of non-perishable goods such as tinned fruit, tuna, rice crackers and so on (try to avoid the junk food and this can turn into a pretty great diet!).

Advertising

Stocking up means you won’t forget or say “I didn’t have the time” when you rushed out to work in the morning.

2. Buy the store-brand version

Many basic foods, such as bread and milk, will taste exactly the same as their branded alternatives. Go for stuff with minimal additives and preservatives. Meat in a tube is probably insanely unhealthy!

3. Eat cheaper cuts of meat

Learn how to tenderize and flavour cheaper meat and fish, and save on the (typically) most expensive item on your grocery bill.

4. Have group dinners

If 10 friends put $5 each in the kitty, it’s pretty easy to make a giant lasagne and get refreshments, as well as hang out with your favourite people.

Save Money in Transport

5. Get a bicycle

Save on gas money and bus/metro fares with this underrated mode of transport.

6. Use public transport and/or don’t get taxis

Some places can only be reached by car. But as a good practise, check your public transport website and see if any routes pass nearby where you need to get to. Walk as much as you can.

7. Find the cheapest gas

Regularly check out where the cheapest gas can be bought.

Save Money in General Shopping

8. Shop online

Not only will you save on the gas or transport fares from going to the shopping mall but you will also find better deals

9. Sell your old stuff

Get your unwanted belongings up on eBay ASAP and earn a few dollars.

Advertising

Here’re more ideas for you: 25 Things to Sell to Make a Lot of Money

10. Bulk buying stores

For regular non-perishable/slow perishable purchases such as toilet paper, cat food, pasta, washing powder and so on, do an epic stocking-up trip to a co-op or equivalent (my mum used to go to a place that restaurants buy from).

Be wary of supermarket “deals”, as some have been found to be fraudulent after working out a simple calculation.

11. Become a flea market/car boot sale/street market guru

You can find original gifts and develop good negotiation skills at these places.

12. Generic brand medication

More often than not, the generic version of paracetamol and other basics work the same as the branded version.

13. Choose deodorant, not perfume

It blows my mind when someone drops $70 on a bottle of spray. Stick with a nice deodorant, and not only will you smell just fine but you’ll be sweat-free as well!

Cut Down on Household Expenses

14. Printing

Ink is one of the most expensive substances in the office and coloured ink is doubly so. B

e more efficient and choose black and white, and if your printer doesn’t have a print-both-sides options, just print odd pages first, re-insert the paper and print even pages.

Expand the margins of what you are printing as often as you can to save on paper.

Advertising

15. Minimize SMS and phone calls

A combination of a free chat service such as WhatsApp and a free call service such as Skype can reduce your bill to nothing (so long as you have a decent Wifi connection).

16. Shop around for insurance

Most people don’t spend enough time searching for the best insurance deal.

Keep a watchful eye out for deals and new competitors in the market.

17. Try re-negotiating your rent/mortgage

If you have built up a good credit history or a good rapport with your landlord, then chances are a frank chat about needing to tighten your spending could result in lowering your payments. You’ve nothing to lose from trying.

18. Don’t get a TV

Invest in a computer/laptop and an internet-only package. You can watch more (and often better) entertainment on the web, and skip the advertisements as well.

19. Pool your internet bill with a neighbour

My apartment building is basically a big old house split into three apartments. There are five of us in total. We pool the internet bill, making it crazy cheap.

Save Money in Socializing, Entertainment And Travel

20. Have house parties

Instead of paying for overpriced drinks, set up a series of in-house get-togethers with your friends. Everyone takes a turn, so it’s not always your house that needs cleaning.

For sound insulation, hang heavy drapes on the walls and windows. For music, invest in a good second-hand set of speakers which you can connect to your computer. Let Spotify or Grooveshark playlists do the rest.

21. Open festivals, meetups and events

It never fails to surprise me how much underground stuff goes on around me for free or for very cheap. Find out who runs the blogs and websites that list all the less well-known cultural activities.

Advertising

22. Volunteer

If you can’t pay for a ticket, volunteer and get to be there anyway.

23. Housesit

There are multiple housesitting websites offering you the possibility to avoid paying hotels and skip the discomfort of crummy hostels.

Save Money on Hygiene and Beauty

24. DIY beauty

French manicures, pedicures, waxing, eyebrows… pretty much all of these can be achieved at home (and done well) with some practise. There are plenty excellent blogs and YouTube tutorials to help.

25. Fewer haircuts/volunteer at a trainee hairdresser

If you can’t bear the risk of a trainee touching your locks, learn more ways to manipulate your hair as it grows and get haircuts sparingly. Women’s haircuts are outrageously priced in many cities.

Bonus: Effective Money-Saving Tips for Everything

Here’s a summary of what you can generally do to save more money:

  • Share/pool resources. Organize a neighbourhood sharing scheme, common resources for your apartment block or with your friends. Not everybody needs an individual lawnmower.
  • Buy energy-saving everything. The easiest way to lower your bills – replace those lightbulbs!
  • Buy in bulk. Be sensible about it (i.e. make sure you have space!), and drastically reduce weekly expenditure.
  • DIY. Skill up using YouTube tutorials on plumbing and many other essential services so you never have to pay for simple problems again.
  • Research a lot before making a decision. Most money-wasting is the result of poor preparation and planning. Don’t shirk this part just because you don’t like it!
  • Use your network. Your network is full of resources that can ease the pain of budgeting. Ask for help.
  • Stop and think. Do I really need it?

Unfortunately, there are some things that require plain ol’ giving up for the time being. This can include high-cost sports such as skiing, the latest versions of some technologies, the finest brands of food/drinks, premier seats at the opera and most other indulgences.

What is important to remember during lean times is that when you look back on your life, it will be the experiences that stand out, not the extra comforts.

Living on a budget can teach you a lot about how much you can really get out of your paycheck. We only live one life, so make the most of every penny you earn!

More Tips for Personal Finance Management

Featured photo credit: Unsplash via unsplash.com

Read Next