Technology is transforming the way we look at making money. With the ever-growing internet market, people can now make money much easier than in the pre-computer age. The entire world is at our fingertips. Networking has never been easier. Among the many ways to earn income online, the internet has enabled investing in stocks for everyone, and we no longer must rely on Wall Street to make our trades.
There are plenty of apps and websites where investing is made simple. You do not have to be a pro to begin trading. It can be as simple as a click or two, but even so, it still helps to do your research. There are loads of resources and tools to help you achieve your goals, but where to start? Below are five basic steps to begin investing.
1. Decide how you want to invest
Do you want to research yourself, or would you rather have an expert invest for you? Doing your research is much easier today, using tools such as a stock advisor and other websites where the company researches for you. Some endless blogs and articles can assist you in choosing the right stocks.
Using an expert is also a great way to start investing, where you let a firm (or multiple firms) invest for you, but of course, you will have to pay more fees. Having others invest for you is like putting it on autopilot. You can see the overall picture, but you do not have to deal with the day-to-day operations.
Either is a great way to invest, so it depends on how much time and effort you can invest into investing.
2. Open an investment account
You cannot invest without an investment account. There are multiple options, including opening a brokerage account or using investment management services. If you plan on doing most of the work yourself, opening a brokerage account is the way to go. If you would instead let the professionals handle most of the work, then use a professional firm.
Even with minimal experience, you can open your brokerage account and start trading stocks today. There are also plenty of smartphone apps where you can experiment with light investing in various penny stocks.
If you do not have time to do the investing yourself, or you would rather have a professional do it, many companies can do all the footwork for you. You only have to pay attention to the bottom end.
If you plan on using a firm, you are all set to invest. There will be professionals who explain the options to you.
If you are going to invest yourself instead of using a professional, read on:
3. Decide whether you want to invest in stocks or funds
Mutual funds allow the investor to invest in multiple small pieces of stocks in one transaction. By investing in multiple mutual funds, you are investing in a diversity of companies. Building a diverse portfolio is easy to create when investing in mutual funds. Especially if you have multiple accounts, investing in many different companies.
Individual stocks are for one company, where you can buy shares of the company one stock at a time. You can build a diverse portfolio by investing in different companies. Individual stocks can be more of a risk, but the payoff can be huge. For example, if you spent $1,000 on Apple stocks in the 1980s, you would now have close to $7,000. So those who bought a lot of stock in Apple now have a vast amount of money accumulated.
4. Figure out how much you are willing to invest
Now that you know what and where to invest, you must figure out how much you are willing to invest. Stocks can range from pennies to thousands, depending on how much that stock costs. Mutual funds have a minimum, usually around a thousand dollars (sometimes more), so if you are not considering to spend that much, you can investigate penny stocks. Penny stocks will have a smaller payout, but they are a great way to learn the world of investing.
5. Plan for the long term
If you are looking to get wealthy quickly, the chances are against you. However, investing in stocks is proven to be the best way to build wealth over an extended amount of time.
Look at your budget. If you have a certain amount of money that you can spare for investing, then it is a great idea to invest that money. Investing is sometimes a gamble, but you will put that extra money to good use if you do it right.
Investing is an excellent strategy for long-term wealth. If you have the money, then start investing today. Years from today, you will glance back and be so glad that you did.
