Getting started investing shouldn’t be so daunting as many beginner investors are prone to think. Within the next line, we will round up the most important steps to help you achieve your financial goals.
1. Pay off bad debts
There is no way you can start investing before you deal with your debts. Your debts could be the main reason holding you back from making your money grow. And here, we are not only talking about mortgages and student loans.
Bad debts from credit cards can also give you a lot of trouble, so make sure to pay them off before putting your money in investment accounts.
Speaking of trouble, avoid common money traps like trying to keep up with the Joneses buying the shiniest car, the latest smartphone, and luxury clothes. These are unnecessary caprices that will put you in a negative balance, so you have nothing left for investment purposes.
2. Create an emergency fund
Once you have the appropriate money-related mindset, you will more easily figure out how to save your money for making an emergency fund.
As its name suggests, it’s the money you dedicate only for emergency events, the most common being unforeseen medical expenses, the loss of a job, or a significant decrease in regular income. Or in the case of the pandemic, as we have recently seen its disastrous consequences for the financial health of millions of people.
It’s generally advisable to have at least three months of your expenses put in an emergency account. The emergency fund will give you peace of mind so you can focus on your investment plan.
3. Learn investing basics
Before jumping in the ring, you must know how the financial markets work, how the prices are influenced and formed. To figure it out, you need a little bit of education on the matter. The key to successful investment is good information and adequate knowledge.
Fortunately, there are so many free resources for stock trading, Forex trading, futures market, and so on. Blogs, podcasts, ebooks, training on demo accounts on a brokerage platform, everything counts when it comes to learning the ropes of trading and investing. Even if you decide to seek help from a financial advisor, you will need to know what he or she is talking about.
4. Create investment plan
Planning is the pillar of every successful entrepreneurship. Once you create a solid emergency fund, pay off the worst debts. It’s time for planning. Supposing that you have acquired basic knowledge of the investment opportunities and financial markets, you need to develop a clear plan.
First and foremost, make sure what exactly you want to achieve with your plans. Then, you pass on the proper investment strategies. Starting from your lifestyle, you need to evaluate your financial standing to grasp the risks you can expose yourself to.
If you aim to invest in the currency market and start currency trading, make sure you know how much you are comfortable losing daily or monthly. Checking what the specific Forex broker has in store for you would be an essential step in this case.
5. What type of investment to make?
Forex is just one option among so many options for investment. There are also rental properties, cryptocurrency markets, bonds, or shares of companies with good performances.
Whatever you decide to be your tool for making your money grow, make sure you completely understand how the markets work, the factors that determine market prices.
And of course, following the news is a must: just look at what the latest Elon Musk’s tweets have done to the prices on the cryptocurrency market and what was the impact on the investors’ portfolios.