How to start investing the small way in 2019
Do you want to start building up your wealth? Want your money to not sit in a savings account and lose value due to inflation? Here is a handy little guide on how to build up financial wealth and start owning assets today that can start making you money. This is not a get rich quick guide and in no way will get you retired before the end of the year. This guide will assist you in how to start investing small and learn the basics to simple investing.
Everyone says that they do not have a lot of money to start investing with and that is fine. Even though some people who say that are investing 7 bucks a day into a coffee or 600 bucks a month into a brand-new car. The money is just not there. There are of course other people who just simply do not have a lot of means for investing and that is understandable too. The point is to draw the line and understand that if you can cut things out to invest more money, do it and if you don’t have a lot of money to invest, start with what you got.
Investing can be simple or complex. Chances are that you will not have a lot of time to throw into understanding your portfolio and you will be forced to either pay an investor fees to manage your money or you can do it on your own. With the uprising of apps like Robinhood and Webull to just name a few, you can start investing right away. For this example, we will use Robinhood due to their instant deposit policy and great interface for basic learning.
Step 1. Make a budget and stick to it.
Reading here, we go over just simply put together a budget and stick to paying yourself first and then your bills. Do not be late on your bills but make a budget and see how much you can afford to invest.
Step 2. Install Robinhood on your phone (you can use this app or any other app that fits your budget)
As stated, we are choosing Robinhood due to simplicity, ease of access, instant deposit and even their reputation of no fees. You can afford to purchase 1 share of a stock trading for 10 dollars and not have to pay out 5.99 commission fee. In the old days, you couldn’t afford this due to the extra over head but today, you can buy stock and pay no additional fees.
Step 3. Pick yourself out some stocks that you trust or stick to ETFs.
If you want to start investing, pick out some companies that you feel have the best odds of sticking around. Investing into the stock market has really become regulated gambling with higher odds if you are a long-term trader. Do not go into these investments worried about day trading, swing trading or penny stocks. Put your money where you are comfortable with.
If you do not know how to find your own stocks, you can purchase ETFs that are basically like mutual funds. Many of them will grow or just stay around the same dollar amount while pitching out dividends. Some pay even monthly which can help you build up a monthly income that you can see and understand. Of course, stocks can be exactly the same way so build up based on what you are comfortable with. People like ETFs because it is a group of stocks and not a possible one point of failure.
Step 4. Put the phone down and walk away.
There will be ups and downs when it comes to your investments. If you sell because you panicked, you will most likely lose money. The average return after 50 years on stocks is still positive. Meaning, just because the market goes down, doesn’t mean it will stay down. The rich get richer because they buy when everyone is selling and the poor get poorer because they give up their stocks at low prices. This investment needs to stay packed away and not be money that you need tomorrow. Good things do come to those who wait.
Step 5. After the growth, live free
Do you want to only depend on a 401k that you can’t pull out till they say you are old enough? Or do you want to depend on a pension funded by a debt that the government can’t promise will be there in the next 20 years possibly? Build your own future and do not depend on the wealth of others. A strong and brutal saying says it best.
“If you die tomorrow, your job will be posted online before your obituary.”
Build up your future now instead of waiting. Have the ability that if you had to stay out of work for a period, that your wealth can keep growing. Do not settle for anything less. Financial freedom is not impossible, it just requires self-discipline and the ability to execute where necessary. Start investing small in 2019 and help yourself grow financially free.