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Lucy
@lucy_d72
How to avoid bad investment advice
- Never buy a financial or investing product from someone you just met.
- Getting returns over 12% per year is ridiculously hard. If it sounds too good to be true, it is.
- If you don't understand it, don't invest in it.
- If one of your friends recommends an investment that's making them a lot of money, they are probably suckers too. If you see the "results not typical" on any marketing materials, move on.
- There are no "secrets of the super-wealthy" that anyone will sell you for $500 or that you can take advantage of unless you have hundreds of thousands of dollars.
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Lola F.
@lolaf237
Investing for Beginners
Investing defined
Investing is about laying out cash or assets now, in the hope of more cash or assets returning to you tomorrow, or next year, or next decade.
Most of the time, this is best achieved th...
Productive assets explained
- Productive assets are investments that internally throw off surplus money from some sort of activity.
- Each type of productive asset has its own pros and cons, unique quirks, legal traditions, tax rules, and other relevant details.
- The three most common kinds of investments from productive assets are stocks, bonds, and real estate.
Investing in Stocks
- It means investing in common stock, which is another way to describe business ownership or business equity.
- When you own equity (the value of the shares issued by a company) in a business, you are entitled to a share of the profit or losses generated by that company's operating activity.
- Equities are the most rewarding asset class for investors seeking to build wealth over time without using large amounts of leverage.
Paisley
@pai291
Investing for Beginners: The Complete Investing 101 Guide for 2019
Investing
... is the trading of your money today for a lot more money in the future. It is a high yield over the long term.
What happens to your money
Banks don’t like to give away their money. That mindset is reflected in the interest rates of checking and savings accounts of 0,5% and 0.9% avg. annual interest respectively.
When you deposit your money in the bank, the bank turns around and invests that money at 7% a year or more. After they collect their profit, they give a tiny shaving of it to you.
Portfolio and Diversification
- Your portfolio reflects your long-term wealth building investment strategy – not the short term. It includes everything you own. Your retirement accounts, your investment accounts, even your home are types of investments.
- Diversification is a way to describe owning multiple types of investment assets. Diversification is smart because you both protect yourself from failure and position yourself to take advantage of multiple robust methods for building wealth.
Valerie
@val_q29
Personal Finance Guide: Manage Your Money Like A Boss - Darius Foroux
A Definition of Personal Finance
Personal finance is about managing your own money - how much you spend, save, get into debt, and invest.
How you manage your money will depend on your age, education, ambit...
Best Personal Finance Books
- The Richest Man in Babylon, by George S. Clason. The message of this 1926 book is that rich people are rich because they save their money and don't get into debt.
- Your Money or Your Life, by Vicki Robin and Joe Dominguez. This book will change your relationship with money.
- The Little Book of Common Sense Investing, by Jack Bogle. This book is about index funds. Jack Bogle founded Vanguard and created index funds.
The 4 Phases Of Personal Finance
Consider where you find yourself as each phase requires a different strategy.
- From nothing to something. This is where you live from paycheck to paycheck without any savings. Try to build a financial buffer of at least one month of expenses.
- Gaining traction. Once you've saved at least one month of expenses, aim for saving six months of expenses.
- Peace of mind. Put your money in a savings account and don't touch it. Everything else you save from now on is meant for investing.
- Financial freedom. This is the stage where you have enough cash and investments to cover your cost of living.
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