Words by Ola Majekodunm
A guest-post by all things money on beginning your investment journey.
“In this world, nothing is certain except death and taxes” – and market crashes and cycles. The investing game involves a fair share of swings and roundabouts. A quick Google search of the words “bitcoin”, and “stocks” will prove as much. Despite all the bad news, we couldn’t be more collectively obsessed with all things investing.
That’s not a bad thing. It’s actually a very good thing. Taking an interest in building wealth is beneficial – if done smart and right. And before you go risking your well-earned money, there are a few things to learn. Like, you know, what investing *actually* is.
At its simplest, it’s this: “Investing is when you buy certain stocks or assets with the hope that they will increase in value over time.” That’s pretty much it. Rather than leaving your money to settle in a bank account – or, if you’re particularly scared of banks, under your bed – you can send it to work, investing in companies, funds, coins, markets and just about everything else these days. Money used to purchase these options can increase in value – when your investment increases in value, that is.
But – and it’s a big but – there’s always a risk. Winning and losing money is part of the game. Your appetite for risk will determine exactly what it is you invest in. There’s no cheat code or get rich scheme. Do your research.
That aside, here are some quick, top-tips about investing:
Go it alone or make friends with a robo-advisor
First thing to take into consideration is how you want to invest. In the age of the internet, where technology is infused in just about every area of life, there are endless options. You could go it alone, making judgements about which assets are worth backing. Or, if you’re new to the game, you could assign that job to a Robo-advisor (several investment apps have this option). It’s a nice, gentle way to get eased into markets, stocks and everything in between.
Make a budget
After that, you’ll want to make a budget. Deciding exactly how much you want to spend on investments is a matter for you. Whatever the amount – whether 1000s or £1 – risk still applies. Don’t go spending more than you budgeted. It’s a quick road to financial misery and ruin.
Choosing the right platform
There are more investment platforms than anyone could care to count. Knowing which to use is important – it can make a helluva lot of difference. After sifting through, choose one that works for you. You’ll need to open up a stocks and shares ISA – making the returns tax-free.
Play the long game
Playing the long is important. Making money is often a marathon, not a sprint. If you can, try and invest your money for a minimum of five years. It’ll give you more chance of riding out volatile periods.
These five tips on how to start investing will get you on your way – but it’s not a quick game. Doing the research and paying attention is important. There’s nothing worse than a careless spender.
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