Investment

Investing for Beginners

Here it is! – That thrilling (and insightful) guide to investing for beginners that you’ve been dreaming about finding all your life.

Well, perhaps we’ll leave “thrilling” to your judgment. However, we are quite confident that you’ll become more than just a little excited when you learn the truth about the wide array of opportunities available to you through investing – opportunities you can use to establish and grow your fortune.

This guide is designed to serve as an informational primer for you in the arena of investing, even if you’re a complete novice. It’s not a detailed guide to a specific investment (we’ll be offering those in subsequent publications), but rather a broad overview of different types of asset classes that you may wish to consider investing in, along with guidance on exactly how to get started making (lots of) money through investing.

We’re also going to cover some basic principles of investing for beginners – principles that apply to any type of investment. Learning these principles will significantly help you to maximize your investing success and profitability.

Introduction to Investing for beginners

Before we get going with investing for beginners in earnest, a gentle suggestion… relax. The field of investing is a large one, and there’s virtually an infinite amount of things to learn about investments. The best, most successful investors will tell you that they are continually learning and continually honing and expanding their skills at making money in the financial markets.

You can’t learn everything there is to know about investing, or even just investing for beginners, in one day, but fortunately, you don’t need to do that in order to begin a career as a successful, profitable investor.

One of the most glaring holes in our educational system is the lack of even basic education in the areas of personal finance and investing. One of the most successful traders in history once remarked, “If I’d only been taught in high school what I later managed to learn on my own about investing, I likely could have retired wealthy by age 35.”

Perhaps that’s a somewhat “optimistic-in-hindsight” estimate of investing success, but there’s no doubt that anyone can potentially reap massive financial benefits from simply taking the time to learn the basics about investing as early as possible in life.

So be thankful if you’re reading this guide at age 16, but don’t be discouraged if you’re already well past high school age, or even middle age. It’s not too late to begin building a fortune through investing, and the sooner you start, the sooner you’ll move well beyond investing for beginners and achieve your financial dreams.

There are two truths we’d like to stress to you at this point: One is the fact that taking the time to acquire even a very rudimentary knowledge of investing, whether at sixteen or sixty, will put you well ahead of your peers in terms of financial literacy, and ultimately, in terms of financial success.

The second truth comes from one of the richest commodity futures traders. This wise, older man confided an important “secret” about investing and wealth – “You can make a lot more money a lot faster by sending your money to work for you every day, rather than just sending yourself to work every day”.

And that’s all investing is: Putting your money to work for you making more money.

Basic Types of Investing

This is the building block of investing for beginners. There’s an endless list of specific investments you can make, but nearly all investments fall into one or the other of a handful of categories commonly referred to as “asset classes”. An asset class is made up of investments with similar characteristics that are also usually governed by the same set of financial regulations.

 

Asset Classes

The asset classes that most people are familiar with are as follows:

1) Equities/Stocks
2) Fixed Income investments/Bonds
3) Cash or cash equivalents, such as money market funds

There are several other asset classes you may wish to explore investing in at some point, which including the following:

1) Commodities and futures, such as oil or gold
2) Alternative investments, which include real estate, foreign exchange (forex), and collectibles

3) Sustainable, Responsible and Impactful investments (SRI) with a primary focus on beneficial social or environmental effects

NOTE: Generally speaking, alternative investments tend to be less liquid than more traditional asset classes. Stocks, for example, are an extremely liquid asset, whereas a private equity investment may require tying up your investment capital for a minimum period of five to seven years.