Investing For Beginners – How To Get Started A Step-by-Step Guide

Hey everyone, Pratap here from FinanceCompanies.us and in this blog, I’m gonna talk to you a little bit about investing for beginners.

How to get started, what’s the best way to get started, and what advice do I have for people that are brand new.

Now to give you guys an idea, I got started investing when I was 18 years old and I’m now 23 years old today. At the time I didn’t know anything about investing, but I was reading these self-help books and I read some books on finances.

And I just learned some basics about investing and I realized the most important thing is to start as early as possible. Because the earlier that you have to start investing then the more beneficial it’s gonna be later in your life, because then you can take advantage of compounding, which Einstein said is the ninth wonder of the world.

And Warren Buffet, all these investment gurus all talk about the power of compounding. I learned some basic things about that and so I knew at 18 years old, I needed to get started. And of course, the earlier that you start then the sooner than you can make mistakes, you can learn from those mistakes, you have a much higher risk tolerance because a mistake that you might make is not gonna be as costly as opposed to if you’re in your 30’s or 40’s or 50’s or 60’s, where you gotta be a little bit more cautious and conservative in your investment strategy.

So I was 18 years old, the first book that I read on investing was called The Wealthy Barber by David Chilton. And it’s more of a book geared to Canadians but it basically taught the principles of paying yourself first, first and foremost, the number one rule, the most important thing is to pay yourself first, and to invest on a monthly basis, an ongoing basis.

So that you can take advantage of what is called dollar cost averaging and have your investments and your money compound over a period of time. And I’m gonna explain a little bit what I mean about those, but just to go back to my story. I got started when I was 18. I started with about, I think $500 was my first investment in a mutual fund.

It was actually the Bank of Montreal mutual fund here in USA. I started putting aside $25 a month on a pre-authorized payment plan to constantly buy more shares of that fund on a monthly basis.

I think maybe when I was 19 years old, I made a $5,000 investment to another mutual fund. And invested in a few other different things, and then I just kinda stopped. I mean, I was always kinda putting money aside every month, paying myself first, but I didn’t really do any active investing for awhile. But I did remember a number of years ago, I did buy Apple stock and I had a great return from that. I did buy Facebook when Facebook just went public, a number of years ago, and I made some money from that.

But at the time, I didn’t have a lot of money to invest. And so, I literally, I remember buying like $600 worth of shares of Facebook and $800 worth of shares on Apple, so even though I did make some good returns percentage-wise, the return was really only a couple hundred bucks or a thousand bucks or something like that.

But since then, to give you guys an idea, I’ve done very well with business, I’ve learned a lot more about investing. At 23 years old, I bought a real estate property a number of years ago, I think in 2016, that is a rental property that I rent out and I make a little bit of a passive income from that, as well as the capital growth of that.

I’ve also got an over 1.6 million dollar investment portfolio of just stocks. I no longer invest in mutual funds. Actually, I do have one mutual fund still, but primarily a stock portfolio that consists of blue chip stocks, index funds, a variety of different sectors, a lot of dividends paying stocks, some real estate investment trusts, bonds, a number of different investments.

And I’ve also invested in private businesses, I’ve also done a loan as well. And so I’m gonna go over some of the strategies and just kind of give more basic advice. But I wanna give you guys an idea that I started from nothing, and I’ve been able to build myself up to a millionaire today, at 23 years old.

So what I’m gonna share with you can definitely help you if you’re just getting started. It can take time, of course. But I’m gonna share with you some just very basic principles that are really important for you to understand.

Now the first and most important thing is to pay yourself first. And that’s the first thing that you’re gonna learn in any investment book or any financial book out there, because you need money to invest. You need money that you can put aside to save or invest or whatever it is.

And if you don’t have that, if you can’t take a percentage of what you make and put that aside, then there’s no hope for you to be able to grow your net worth and be able to make more money. And so, whatever amount of money that you’re making right now, whether it’s a $1,000 a month, $2,000 a month, $5,000, $10,000, or more, you’ve gotta make a decision.

The most important financial decision of your life, which is that you’re gonna take a percentage of what you make, and I recommend 10% at minimum, take 10% and you’re gonna put that aside and pay yourself first, you’re gonna put it in a savings account, or an investment account, or some other account that you’re not gonna touch.

Very important, okay. Now, you might be saying, well I don’t have the money to do this, I live month to month. Well, maybe the step before that, that’s actually even more important, is you gotta manage your money, you gotta manage your finances, and you gotta pay attention to it on a weekly and a monthly basis.

Because you should never be in a position where you’re living month to month. That’s a horrible position to be in, that position means that you’re never gonna be able to get ahead in your life. Because living month to month basically means that your expenses are here and your income is here. And so, whatever income that you’re making is going right towards your expenses.

And the only other options to be able to pay yourself is either you need to make more money and keep your expenses where they’re at, so make more so that you have a positive cash flow that you can then take that money and pay yourself first. Or you’ve got to lower your expenses.

Now for most people, the best thing to do is to lower your expenses. Cut down on your current living expenses. Because if you’re living month to month, you can’t afford to live the way that you’re living.

You’re living beyond your means. And that’s not smart financially. Most people that live in a house or they rent an apartment or rent something that they can’t afford. They have a car that they can’t afford, they’re buying food and luxuries that they can’t afford. And you gotta make a sacrifice. And this is coming from someone, I was in debt at one point in my life.

When I came to this realization, I had to make a sacrifice. I had to, for example, I had to move back into my parents house, or I had to live with my friend on his couch for several months, or I had to eat at home and not eat out as much or not go out as much or take the bus and get rid of my car.

These are all sacrifices that you might need to make in order to bring down your expenses so that you have that positive cash flow. Very important. Look at your current lifestyle now. Look to see and set a budget for yourself that you’re not gonna spend more than X amount of money. Anything in excess, you’re gonna save that and you’re gonna pay yourself first.

The reason why they say pay yourself first is ’cause you’re supposed to pay yourself that money before anything else, before you pay your bills, your rent, or anything else. Okay, that’s how important that you have to make this.

So that’s the first step, maybe I’ll do another blog that would go into managing money and financing, but you’ve gotta pay yourself first, 10%. I don’t care if that’s 100 bucks a month, $25 a month, $1,000 a month, you gotta make sure that you’re doing that. To give you guys an idea, I started that way but now because my business and my cash flow is really big, I’m able to pay myself like 80% of what I make.

Just because I have low expenses and very high margins in my business and so therefore, I’m able to literally, tens of thousands of dollars every month, invest that, and invest that to be able to grow more, my portfolio and everything like that.

So you wanna be in that position where you have positive cash flow, number one. Number two is you need to make sure that you have an emergency fund of savings.

Very important. If you don’t have that then you’re gonna be in trouble. Typically, what all the financial books say, you wanna have at least three months to six months of savings, which is typical of your expenses.

So if your expenses every month is $2,000 a month, and by the way, you gotta know what those numbers are, you gotta know exactly what you’re spending every month, and what you’re making every month. If you can’t tell me those numbers, you’re gonna be in financial trouble. You gotta know those numbers off the top of your head.

So, if it’s $2,000 a month, that’s your expenses, then you need to put aside at least $6,000 to $12,000 in savings as an emergency in case something happens to your job, in case a disability happens, in case something happens to your business.

Who knows what can happen, but you gotta have that emergency fund, very important. Next, once you have that emergency fund of three to six months, and if you wanna be more conservative, you could do more than that, if you’re more risk tolerance, you could do less. But three months at minimum, important.

Now once you’ve done that, you’re gonna have an extra positive cash flow, where you’re gonna be paying yourself and you’re gonna have that money go into a savings.

What do you do with that money? How do you invest it?

Well you gotta explore the different investments that exist. Now, the number one investment that you can make, the number one, according to Warren Buffet the multi-billionaire investor, the best investment that you can make is not in real estate, not in stocks, not in your business, it’s in yourself.

That’s the number one investment that you can make. And by in yourself, what I mean by that, is investing in your knowledge, developing your skills, your confidence, your beliefs, self-development, learning about finances, learning about business, learning about marketing, all the different skills. You gotta invest in yourself.

All the most successful people in the world all understand this. And the truth is, is that if you could invest in yourself, that’s what’s gonna bring you the highest return out of anything else, because if you continue down the path you are and you don’t invest in yourself then you’re gonna continue getting what you’ve always got.

And by investing in yourself, you’re gonna be able to learn the skills, and the confidence, the habits, et cetera, that can help you make more money and make better decisions in your life, which are gonna make you a lot more money. So for me, I realized this, I realized that I need to invest in books, number one, I needed to read. If you wanna earn more, you gotta learn more.

So I started reading books, I just started studying. I started going to courses, and products, and video training, and audio training, and seminars, and coaches, et cetera to continuously develop myself. Very important, that’s the most important thing.

The second most important thing that I think that you’re gonna get the best return from besides yourself, is your own business.

Now, a business is something that has a high potential for reward because you are in control of the business. In fact, it’s directly related to you.

The more that you improve yourself, the more that your business will succeed. And you always wanna bet on yourself more than anyone else. So, betting on yourself, investing money in a business, whether it’s an online business, or whatever it is, that has a higher potential of growth, and it’s gonna be a lot less risky because you have more control over it as well.

So that might be getting started on an Amazon business, or a publishing business, or developing a blog and doing affiliate marketing, or doing your own products, or an app, or a software, whatever that is. You’re gonna need money to invest and build that and to be able to market it.

You wanna have that advantage to be able to grow it. So that’s the number two biggest investment that I believe that you can make. And for me, a lot of the money that I make, I put it in myself, I’m always going to seminars, courses, even though I’ve made a lot of money I’m still investing even more in myself. I have coaches, I read books, I do all that sort of stuff, continuously today.

I invest in my business ’cause my business is a seven figure a year business that has the potential to grow even beyond that, and I’m gonna get the highest returns in my business. Very important. The other options that you have would be stocks, would be real estate, investing privately in other businesses, loaning money, bonds, there’s a lot of different investment vehicles out there. And you can explore a number of the different ones.

I’m not an expert on all of them to be honest with you. I think your business is always the best because you know that the most, you understand it the most, where as other investments you might not understand or know much about, but you wanna explore the different options.

For me personally, I like stocks, primarily, index funds is great. In fact, Warren Buffet, that’s his advice for most, is to invest in an index fund. An index fund is basically a stock or a mutual fund that has very low fees, like ridiculously low fees, but it’s basically owning a segment of a market.

So for example, there’s index funds that you can own, the S&P 500, which is the United States, the top 500 companies in the United States. So you can own an index that’s diversified and owning a peice of all 500 of those companies. You can own an index fund of the TSX, the Toronto Stock Exchange, that will own the top companies that are in USA.

You can own index funds that will own the whole world economy, or different markets, or bonds even. There’s many different types of index funds that are out there. But index funds are great because as the economy goes up, your investment goes up, you make more money, when it goes down, it goes down. Now when investing, the best advice that I have also is to invest long-term. Have the long-term mentality, don’t be caught up in the whole get rich quick mentality because that’s what’s gonna lead you to making a lot of bad decisions and you’re gonna get into trouble.

I believe in investing long-term and so investments that I make, I invest in businesses and stocks that long-term are gonna have a positive return, a positive yield. And depending on how old you are, if you’re watching this and you’re less than 40 years old or even 50 years old, you have a lot of time on your hands. And so you have the time to wait. And so for me, when I invest in index funds or other stocks, it’s gonna go up and it’s gonna go down, but I actually enjoy it when it goes down.

Going down is a good thing if you’re investing in index funds or if you’re investing in blue chip companies or stocks that are very secure, because when things go down, that’s an opportunity for you to buy more at a discount. Buy more shares because, the economy always recovers, recessions, depressions, they always recover.

If you’re owning index funds, for example, in 2008 when the recession happened, it was a great opportunity for you to buy more. And if you did, if you were investing and buying a lot, if you own an index fund or were buying a lot of stocks during that time, today you’d be worth, that’d be worth a lot of money. So invest long-term, invest on a monthly basis as well.

That’s known as dollar cost averaging because the stock market is always volatile, ups and downs, but if you invest every month, basically it’s gonna even itself out. There’s gonna be times where you’re gonna buy high, there’s gonna be times you’re gonna buy low, but overall, by investing and buying every month the trend is always gonna go up and it’s gonna always be better off for you.

So dollar cost averaging, investing every month, very important. Saving, paying yourself first every month, investing in yourself every month, whatever that might be. So I personally prefer stocks. I enjoy them because they’re very low maintenance. Index funds are pretty safe, low fees, you can get dividends on index funds as well.

Which means that you can actually get paid a dividend either every month or every quarter or every year, depending on what the payout is, so that’s a passive income. And then also, you can actually set up a lot of these investments and stocks on a drip, which means that when you get paid the dividend, it will automatically buy more shares for you. Which is great because then you’re buying more shares and then if you focus long-term, then you have the benefit of compounding over a long period of time.

Now, index funds I think, are a must for every portfolio. Other options are owning blue-chip stocks, I like to own a lot of banks, I live in USA, I permanently bet and invest in USA. Although, I do do some investments in the US. Banks are good, they pay good dividends here, they’re very secure.

For example, Bank of Montreal here in Canada has not missed a dividend payment in over 100 years, so that’s going through depressions and recessions. And the bank system is very secure here in Canada. There’s no risk of them collapsing or anything like that. And so if it goes down, great, I can buy more, it’s gonna eventually go back up anyways.

Real estate investment trusts I like as well, because although I do own a real estate property, I’m not a big fan of owning real estate because there’s more maintenance involved.

There’s more problems that happen and if you really wanna scale it, you need a property manager, which you’re gonna have to pay, usually five to 10% of whatever the rent is, just to manage the property for you. I’ve owned real estate now for three years, and I haven’t really enjoyed it as much.

Whereas, real estate investment trust means that I can own a company that owns real estate. And I can investment in them, and that way I benefit from the real estate market, whether it goes up or down, and I can easily get out of it, whereas most real estate could be hard to get out of and liquidate. And I can get paid a dividend from that as well, and I don’t have to manage it.

So I enjoy REIT’s, real estate investment trusts as well. So, I think learning the different sectors, the different models, the different vehicles is important. Reading books on that, I think is very important as well. But index funds would be the simplest advice that I’d give for beginners to get started with and do some research on those. And then real estate is another thing as well, and doing the research on that, and I think it’s important to make sure that you get started as soon as possible.

Although at times, you’re gonna wanna make sure that you’re very strategic about the investments that you’re making and you’re not just buying real estate if the markets hot and it’s not a good opportunity to.

For example, right now in Vancouver, the real estate market’s ridiculous. I personally would not buy right now, it just doesn’t make any sense to. I’d much rather use that money, invest it in stocks, or other vehicles that exist out there as well.

So I know I’ve kind of sprinkled a lot of different advice here for you, but just to kind of recap, pay yourself first, 10% ideally, invest in yourself, make sure that you have a good savings of three to six months, your expenses, invest in a business if you have one, or other people’s businesses, stocks, explore the different opportunities, invest long-term. I like to invest to get a passive income, specifically in dividends.

Investing for beginners books

I personally don’t enjoy mutual funds as much, even though I still do own one. A great book that can help you is Tony Robbins book called Money: Master The Game, as well as the books by Robert Kiyosaki, such as Rich Dad, Poor Dad, Cash Flow Quadrant. These are all great books that can help you as well to understand a little bit more.

But I think these are the most important things, and just kind of getting yourself in a position where you have the money to invest. And you don’t need a lot of money to invest, I think that’s a misconception as well. Just get started with a couple hundred bucks. And make sure that you build up that savings as well, and you manage your money, ’cause that’s really the most important thing.

If you don’t do that, it doesn’t matter how much money you have, if you can’t manage it, then you’re gonna lose it. You’re gonna make a lot of poorer decisions and make a lot of mistakes. And to get started with stocks, there’s trading accounts that you can get set up. Most banks, they have their own trading accounts. Here in Canada, RBC and Scotia iTrade, RBC has Direct Investing, and then there’s Questrade and a number of different ones out there that exist. And usually what they do is they take a fee based on the trade.

And so for every trade that you make, they’ll usually take maybe $20, $10. And usually the more that your portfolio that you have, the cheaper it gets, or the more trading that you do on a regular basis, the cheaper it gets as well. But if you’re investing through a trading account, then they’re gonna take their fee based on each trade that you make. And then of course depending where you live, this will be the last peice that I’ll give you guys.

You wanna take advantage of any tax deferral systems that you guys might have.

And so for example in Canada, we have what is called a TFSA, tax-free savings account. Right now, at the time of this blog, you can put in $5,500 a year, that will grow tax-free, very important to take advantage of that and max that out. United States, you guys have something different, you guys have your 401K’s or IRA’s, and all the different things that you guys have.

I’m not totally familiar with the US, what you guys do. But make sure that you guys take advantage of that because that’s also very important. All right, so that’s a lot of advice, a lot of beginner, basic stuff for you guys. A little bit of the mindset which is very important as well, but hopefully this can help you get started investing.

I might do more blogs on this subject as well. I do have a great blog that shares my million dollar investment portfolio, I’ve grown it a lot since then as well. But I’ll probably do some more blogs , as well as a blog on managing your finances, ’cause that’s very important also.

I have a lot of great resources that can help you invest in yourself and prove yourself, as well as be able to build an online business, if you’d like, and invest in that to build that as well so that you can make passive income and make money that you can invest with. So, hopefully, you enjoyed this blog.

Investing for beginners podcast

  1. The Investing for Beginners Podcast
  2. The Money Tree Investing Podcast
  3. The Investor’s Podcast
  4. The Dave Ramsey Show
  5. Wall Street Unplugged
  6. Stacking Benjamins
  7. The Real Estate Guys
  8. Motley Fool Money
  9. Best Overall: The Investor’s Podcast
  10. Best for Beginner Investors: Stacking Benjamins
  11. Best Expert Interviews: Invest Like the Best
  12. Best for the DIY Investor: Money for the Rest of Us
  13. Best for Life Stage Advice: Sound Investing
  14. Best for Stock and Fund Picks: Investing Insights from Morningstar
  15. Best for Younger Investors: The College Investor
  16. Best for Niche Investors: Invest Like a Boss

Investing for beginners pdf

  1. First Steps to Stock Market A Beginners Guide
  2. Investing 101: A Tutorial for Beginner
  3.  Saving and Investing

Investing for beginners with little money

Best Easy Ways To Start Investing With Little Money

  1. Try the cookie jar approach
  2. Let a robo advisor invest your money for you
  3. Enroll in your employer’s retirement plan
  4. Put your money in low-initial-investment mutual funds
  5. Play it safe with Treasury securities
  6. Saving Account
  7. Betterment
  8. Lending Club
  9. M1 Finance
  10. Fundrise
  11. Pay Down Debt
  12. Employer Matched Retirement
  13. Your Own Retirement Plan
  14. Prosper
  15. US Treasury Securities
  16. Your Own Skills
  17. Dividend Reinvestment Plans (DRIPS)
  18. Mutual Funds and ETFs
  19. Online Brokerage Firms
  20. Your Own Business
  21. Find an online brokerage or an expert to manage your investments.
  22. Decide where to put your money.
  23. Monitor your investment portfolio.
  24. Continue the steps above over and over again.
  25. The Best Apps for Micro-Investing
  26. Acorns for Spare Change
  27. Robinhood Has No Commission
  28. Betterment Uses Robots
  29. Don’t Forget Your 401(k)
  30. Invest In Mutual Funds With A Low Initial-Investment Amount
  31. U.S. Treasury Securities

Long term investing for beginners

  1. Long-Term Investment Guide:
  2. Stocks
  3. Long-term bonds
  4. Mutual Funds
  5. ETFs
  6. Real Estate
  7. Tax Sheltered Retirement Plan
  8. Robo-advisors
  9. Annuities
  10. Riding a Winner
  11. Selling a Loser
  12. Don’t Chase a Hot Tip
  13. Don’t Sweat the Small Stuff
  14. Don’t Overemphasize the P/E Ratio
  15. Resist the Lure of Penny Stocks
  16. Focus on the Future
  17. Pick a Strategy and Stick With It
  18. Adopt a Long-Term Perspective
  19. Be Open-Minded
  20. Be Concerned About Taxes, but Don’t Worry

Investing money for beginners USA

  1. Try the cookie jar approach
  2. Let a roboadvisor invest your money for you
  3. Enroll in your employer’s retirement plan
  4. Put your money in low-initial-investment mutual funds
  5. Play it safe with Treasury securities
  6. Bonus idea – Consider a 5% return with Worthy Bonds
  7. A 401(k) or other employer retirement plan
  8. A Robo-advisor
  9. Target-date mutual funds
  10. Index funds
  11. Exchange-traded funds
  12. Investment apps
  13. Online Brokers
  14. Investing Through Your Employer
  15. Minimums to Open an Account
  16. Commissions and Fees
  17. Mutual Fund Loads (Fees)
  18. Diversify and Reduce Risks
  19. The Bottom Line
  20. Saving Account
  21. Betterment
  22. Lending Club
  23. M1 Finance
  24. Fundrise
  25. Pay Down Debt
  26. Employer Matched Retirement
  27. Your Own Retirement Plan
  28. Prosper
  29. US Treasury Securities
  30. Your Own Skills
  31. Dividend Reinvestment Plans (DRIPS)
  32. Mutual Funds and ETFs
  33. Online Brokerage Firms
  34. Your Own Business

Investing money for beginners India

  1. Direct equity
  2. Equity mutual funds
  3. Debt mutual funds
  4. National Pension System (NPS)
  5. Public Provident Fund (PPF)
  6. Bank fixed deposit (FD)
  7. Senior Citizens’ Saving Scheme (SCSS)
  8. RBI Taxable Bonds
  9. Real Estate
  10. Gold
  11. Public Provident Fund
  12. KTDFC Deposits
  13. Recurring bank deposits
  14. National Savings Certificate
  15. Bajaj Finserv
  16. Mutual Fund

Investing money for beginners Uk

  1. Try the cookie jar approach
  2. Let a roboadvisor invest your money for you
  3. Enroll in your employer’s retirement plan
  4. Put your money in low-initial-investment mutual funds
  5. Play it safe with Treasury securities
  6. Saving Account
  7. Betterment
  8. Lending Club
  9. M1 Finance
  10. Fundrise
  11. Pay Down Debt
  12. Employer Matched Retirement

Stock Market for Beginners – Basis of Investment UK

How to invest in the stock market for beginners UK – If you are a beginner then the terms and phrases can be confusing and you want to invest in the stock market to increase your savings and wealth. It may scare you and leave you completely, but you are missing your financial security and independence.

I should teach you some basics, so that you too can invest in the stock market through Investment ISA.

Go to any high street bank or community formation and ask about their savings rate and you will be in a hurry – they are offering peanuts for cash deposits; So much so that the rate you get does not keep inflation down. This means you will lose money by living.

If you want to achieve your financial goals, then you need to consider investing in the long run – and if you are okay with the increased risk of investing, then you can probably take your first step by using a different savings account. Raise, which is the right way to save your investment from tax.

Deciding to become an investor is the easy part: knowing where and how to invest your money can be quite difficult. We look at how we can analyze your approach to risk, how long you need to invest, and how to choose your investments.

Thank you so much, everybody, I’ll see you guys in the next one, take care! Ta Da!

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