How to get started as a first-time investor

Becoming a successful investor can take years and years, but most people don’t even get that far. Why not? Simple, due to the fact many people research becoming an investor and then quickly give up on the idea. This is because investment is known in the media as the occupation of super-rich financiers with trust funds backing them up, who spend all day throwing thousands of dollars at the stock market without a care in the world. No matter what the media says, though, investing is a broad, varied endeavour which anyone can get into with the right advice. Whether you are investing in cryptocurrency, as is becoming the penchant for most investors; real estate; business or something else entirely, this blog will help you understand the risks, benefits and types of investment available to you. 

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When it comes to becoming an investor, there are many avenues to go down, with pros and cons waiting around every corner. Investing is not just an objective activity, it is emotional, too; as a person, your investment style will depend on your attitude, competitiveness and perseverance. But firstly, let’s take a look at the types of investment that are most popular, and the pros and cons of each one.

Popular types of investment

These modes of investment have proven to be the most popular because they are the most lucrative types of investment going, which are easily accessible to most people with a starter-pot of money. So what are they?

  1. Trading

You have definitely heard of trading, but how can you get into it? Trading involves entering into the trading floor and buying stocks, to then sell them on at a higher price and turn a profit. This quick-footed mode of investment demands detailed attention to trends in the market, as well as time dedicated to research and practice. This involves staring at a screen for much of the day, carefully eyeing trends and graphs; shop here if you need to get some new glasses before you strain your eyes on a trading platform!

The pros of trading are that you can make money quickly. Unlike real estate, the stock market moves extremely fast, meaning you can make money every day. The cons, of course, are that the market can be volatile – you can lose money when the trends change. 

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  1. Real estate

Real estate is one of the most popular forms of investment because it is a pretty safe bet. Real estate investments involve buying properties or land, improving upon them, and selling them on for a higher price. It is the same principle of trading, except with real estate, it is a marathon, not a sprint. In order to make money in real estate you need to play the long game; patience is key. The other key factor in real estate investment is you need to spend money in order to make it back. The ability to buy and improve upon property is essential, so real estate is for individuals who have already made some money to begin with. 

The pros of real estate investment are that you are almost guaranteed to make money. If you choose a property in an up-and-coming area and make classy improvements to it which are high quality, selling for a high price shouldn’t be a problem. The cons are simple – you need money to start off with, and you might not make a profit for a few years. 

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  1. Cryptocurrency

Cryptocurrency deserves a whole section of its own, even though it technically comes under the umbrella of trading. Cryptocurrencies like Bitcoin, Libra, XRP and Ethereum are a new form of currency which have only emerged in this century. To begin with, the prices of a single unit of cryptocurrency were below one dollar; now they are in the thousands, on average. So what are the pros and cons of investing in cryptocurrency?

The pros of investing in cryptocurrency are that it has high liquidity, meaning that you can easily make money very quickly from cryptocurrency. Plus, overall, the prices of cryptocurrency are only growing; if you had spent $1000 on Bitcoin in 2010, you would now have $230,114,128.26. So yes, you can make serious money with crypto. The cons? Well, the cons are the risks. The cryptocurrency market is quite unstable still, being that it is a very new form of currency which is still finding its feet in the world. If you invest a lot of money in a new form of crypto, you aren’t guaranteed to see returns. 

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How do I learn more about investing?

The question on your lips right now is probably, ‘How do I learn to become an investor?’ Indeed, in order to get the knack for successful investment, there’s some learning to do first. But do you need to go to college, attend night school or get a qualification to be an investor?

No, of course not. The best investors have years of experience under their belt; they can spot trends a mile away and make accurate predictions for the market which will line their pockets nicely. However, there are ways for newbies to get successful at investing, as long as you are willing to put in some work. Thanks to free internet resources, many younger people are learning to invest simply by spending time on their computers. Here are a few great resources which will teach you the art of investment. 

  1. YouTube investing channels

These aren’t investors in YouTube, but rather, investors who use YouTube to teach others about their craft. These people come from all different backgrounds, but have one thing in common: they are very successful investors. In fact, most of them make a living out of it – and a good one, at that. They video themselves live trading, review their trades and explain to new traders how the system works. They will tell you all the do’s and don’ts of the trading world. Plus, all this content is totally free. 

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  1. Investment information sites

Sites such as Investopedia are there to explain the nitty gritty of investment details. When you do your research, you can use these sites to revise and clarify your understanding of how different platforms work, which cryptocurrencies are awesome right now, and how you can trade smartly. 

  1. Stock simulators

These are awesome resources for when you want to start actually trading, but aren’t experienced enough to spend your hard-earned cash on it. Stock simulators are like stock trading video games which present a lifelike experience of trading for real, without throwing your money down the drain. Using this tool, you can get the knack for how trading platforms operate, and begin to broaden your understanding of how to follow market trends, buy, and sell. Then, when you’re ready to take the plunge, you can trade for real with a more keen eye.

  1. Financial journalism

Do not underestimate the ability of good financial journalism to teach you about investment. Reputable newspapers always have finance sections which are packed to the brim with well-researched insights from finance experts, advisors and investors. Plus, think pieces and long reads will explore not just the future of investing, but how past trends can teach us about what to expect around the corner. 

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Investing during the COVID-19 pandemic

The COVID-19 pandemic has truly shaken up global economics, and not in a fun way. The global stock markets are highly turbulent right now, with certain industries beginning to plummet in value, then randomly hitting an uptick when people least expect it. The Times reported that, as of Sept. 21, 2020, FTSE 100 had fallen 24 per cent since the start of the year. In short, it’s a highly erratic time to be investing in stocks. But does that mean you shouldn’t do it altogether?

Although the stock market is flailing wildly around, this is a great time to get to know how it works. Similarly, this is a time to grapple with your own circumstances; if your job prospects are precarious and you have a family to feed, perhaps this isn’t the time to go all-in on an unpredictable stock market. On the other hand, if you are looking for some excitement and risk, with the possibility of winning big, then perhaps investing is the best thing for you right now. 

Another way to invest at this time without it feeling like a game of financial Russian roulette, is by investing in real estate. Sure, you can’t make money overnight, but real estate prices in certain parts of the world are plummeting due to sellers’ desperation. If you are looking to buy property, you can shop online using real estate sites or speak with a realtor face to face – at a distance, of course. 

Conclusion

2020 has brought with it a plethora of new experiences, so why not add to the learning curve by getting started with investment? With the help of excellent free resources, research, practice and seeking advice from experts, you can start your career as an investor today. 

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