HOW TO START INVESTING FROM SCRATCH
How To Start Investing From Scratch

HOW TO START INVESTING FROM SCRATCH

  • Post author:
  • Post category:Guide

Improving your well-being isn’t just about working. If the money is used correctly, then there is the likelihood of additional income.

What you need to know about investing;

  • How to start
  • Step-by-step instruction
  • Popular questions and answers
  • How to start investing

HOW TO START INVESTING FROM SCRATCH

The term “Investments” should be treated globally. Choosing certain options for how you will invest in them, you should first of all start by defining goals, why you need it, says Igor. As a rule, there are several options:

  1. You consider investments as a way of passive or additional income;
  2. You consider investments as a way of basic income;
  3. You consider investments as a way of preserving previously accumulated funds (minimizing losses due to inflation and other economic troubles that are beyond your control).

Having defined a goal, a novice businessman will be able to understand how short-term or long-term his activities will become. This, in turn, will help determine the amount of those investments that a person can “donate” to an investment fund. – The main difference between investments and, say, savings, is that the investor also has certain risks, in which, in addition to a positive result, investment losses are also possible, – add Slinkin. – That is why at the start you should not invest a huge amount of investment, and you should also carefully approach the choice/method of investment.

  • Step-by-step instructions for novice investors

For beginners and those who do not have a huge budget, the expert recommends starting with short-term investments, where the result can be assessed already at a short distance – up to one year. This will help minimize the risks of losing your investment. Also during this period, you will be able to get a basic level of practical knowledge that will help change the approach to investment in general.

Method 1

– You can start investing with a regular deposit in the bank. It would seem that this is a fairly simple method that is used by quite a few, – continues our interlocutor. – However, it is also one of the most popular. In this case, it is worth conducting a detailed analysis of the banks’ proposals. According to Igor, depending on the investment period, the possibility of closing the account, and other details, you can get a high percentage of the annual profit. But do not forget that you will not be able to influence the inflation rate in any way, which depends on a number of economic factors: – This means that the real marginality rate can greatly decrease over a longer investment period. Try to analyze this using the example of past years and compare it with the interest rate that can be assigned to your deposit.

Method 2

– The second way to start investing practically from scratch is becoming more popular every month. These are various investment services where you can buy shares of well-known companies without spending a lot of time, as well as starting from the very minimum amounts, the entrepreneur shares.

In this case, experts advise analyzing all available offers. Many services are ready to help newcomers, suggest and recommend the most effective options, as well as take on the risks of losses during the test period: – But I still recommend diving into this process in more detail, analyzing the previous periods of development of the companies whose shares you plan to acquire. The main factors that can affect the growth/decline in the value of shares:

The company’s products, their manufacturability, and relevance;

Number of references in the media;

The relationship with the political industry, the impact on the economy of a particular country;

Seasonality according to the analytics of previous years;

The “scandalousness” of the company, the events that occurred that influenced the jumps in prices.

All information is in the public domain, which will help to compose a certain picture and at least roughly outline the graphs of influence.

Method 3

The third option for novice investors, Slinkin calls the acquisition of real estate. But this is not really about starting investing from scratch. – This is an effective way to invest a large amount. However, its effectiveness can be assessed only when there are no additional factors influencing the cost of housing: mortgages, loans, repairs, etc., he warns. – Do not forget about the liquidity of housing, which will also affect the growth/decline in prices.

To assess the investment attractiveness, it is important to analyze all factors: the purchase budget, the price-quality ratio, the stage of construction readiness, the reputation of the developer. At the same time, attractive and liquid options can be found in each of the segments. The average rates of return on the real estate market are 20-30% in two to three years. This is one of the most stable investment options that will allow you to always be confident in the future.

Method 4

A more complex way of investing is investing money in startups, certain projects, etc. It is considered unstable. Although we must not forget about successful cases from Silicon Valley: – When evaluating the effectiveness of such investments, you should look at the area in which you plan to invest. It is imperative to back up all your investments with legal conventions that will allow you to minimize the risks of losses, as well as the risks of failure of the project in which you are investing. And remember that most geniuses who create successful startups are not always ready to share the risks, which means that responsibility for the result rests with you. If we talk about every step of a person who is looking for an answer to the question “how to start investing?” the following picture is obtained:

  1. Determine the purpose of investment;
  2. Select an option;
  3. Assess the risks and benefits of the chosen option;
  4. Prepare your start-up capital;
  5. Get down to business.
  • Popular questions and answers

Is it profitable to take out loans to invest in projects?

First of all, you need to assess the risks. More likely no than yes. In today’s environment, any project can lose profitability, because it is very changeable. If in one year you earned + 25%, then the next year you can get -50%. And if you repay the loan from your own money, then you will not have enough for regular replenishment of the brokerage account and the growth of capital will stop for several years until you pay off the loan.

How much to start investing?

The prices for exchange instruments are loyal. Mutual funds start from five thousand rubles, their replenishment – from a thousand. Two thousand rubles are enough to buy shares. You don’t have to enter a new industry with a lot of money and take risks. By placing small amounts in different options, you will be able to choose the most suitable one through error analysis. After that, the volume of investments can be increased. It is recommended to enter the stock market with 30 thousand rubles.

Does a novice investor need to invest in only one company?

It is better to choose several directions in different industries. Losing one will help you avoid arriving at the other. Yes, mistakes and losses can be, without them it is impossible. But if you are very afraid of this, then you do not need to try.

Is it possible to face fraud on the stock exchange?

To prevent this from happening, choose a well-known and reliable broker or management company, and you will not have to face fraud. In particular, when it comes to keeping currency or bank accounts, it is better to take well-known companies.

Related Posts:

TOP 10 WAYS INVESTING IN AFRICA AGRICULTURE 2020- STEP BY STEP GUIDE TO STARTUP

TOP 10 BEST LOW-RISK INVESTMENTS IN US WITH HIGH RETURN 2020- HOW YOU CAN INVEST

Expert advice for aspiring investors

– Don’t expect momentary profit. Check your options, learn from mistakes, and be prepared for losses. But in any case, do not give up if you decide to invest. By spending money within reasonable limits, you will find that loophole that will make a profit!