deepstash

Beta

Get an account to save ideas & make your own & organize them how you wish.

STASHES TO GET YOU STARTED

© Brainstash, Inc

deepstash

Beta

Investing for Beginners: The Complete Investing 101 Guide for 2019

The Average Investor’s Commandments

  1. Think Long-Term. It’s very rare for a sudden move in price to mean very much Things will balance out so be patient.
  2. Always keep a few months expenses around in case something happens and invest the rest.
  3.  Buy What You Believe In. If you do not know or understand what you’re buying, don’t buy it. Invest in something that you personally believe in.
  4. Do Your Own Research.
  5. Set It and Forget It.
  6. Consistently Contribute.
  7. Be Fearful When Others Are Greedy.When everyone is a winner you should be concerned.
  8. Be Greedy When Others Are Fearful.The best time to buy is when the world is on fire, not just the typical knee-jerk reaction of the media.
  9. Find and Remove Frivolous Fees. When the stakes are highest, so are the fees. Even a 1% fee can become significant over the long-term.
  10. Diversify. If it can fail, it will fail. Plan ahead for failure.

602 SAVES


This is a professional note extracted from an online article.

Read more efficiently

Save what inspires you

Remember anything

IDEA EXTRACTED FROM:

Investing for Beginners: The Complete Investing 101 Guide for 2019

Investing for Beginners: The Complete Investing 101 Guide for 2019

https://www.listenmoneymatters.com/investing-for-beginners/

listenmoneymatters.com

7

Key Ideas

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.

3 base components of the market

  1. Productivity Growth: Equivalent to technology getting better, faster and us constantly learning from our mistakes. We will always be able to do more with less time and resources than we were able to in the past.
  2. The Short-Term Debt Cycle is defined by a growth period and then a recession period. These cycles last about 5 – 8 years and peaks when loans become more expensive.
  3. Long-Term Debt Cycle is similar to the short-term debt cycle and takes typically 50 years to play out. It peaks when the economy is saturated with debt and it literally can not take on any more.

The Average Investor...

  • does not try and time the market – buy low and sell high,
  • also does not try to beat the market, 
  • just try and achieve average returns,
  • realises that it does not involve a lot of work or stress and locks in a nice healthy return over the long term.
The goal is to grow your money, not lose it.

You Don’t Need a Financial Advisor

  • A financial advisor’s compensation is rarely if ever tied to your success. The majority of their income is based upon the amount they get you to invest.
  • You will pay a fee to your chosen fund plus a fee to the financial advisor.
  • You Might Not Get The Best Financial Advisor. Would you even be able to tell the difference between a good financial advisor if you had a chance to talk with 100 of them? Or will you go with the best salesmen?
  • It is neither difficult nor time-consuming to invest yourself because you're just going to mirror the market average. 

The Average Investor’s Commandments

  1. Think Long-Term. It’s very rare for a sudden move in price to mean very much Things will balance out so be patient.
  2. Always keep a few months expenses around in case something happens and invest the rest.
  3.  Buy What You Believe In. If you do not know or understand what you’re buying, don’t buy it. Invest in something that you personally believe in.
  4. Do Your Own Research.
  5. Set It and Forget It.
  6. Consistently Contribute.
  7. Be Fearful When Others Are Greedy.When everyone is a winner you should be concerned.
  8. Be Greedy When Others Are Fearful.The best time to buy is when the world is on fire, not just the typical knee-jerk reaction of the media.
  9. Find and Remove Frivolous Fees. When the stakes are highest, so are the fees. Even a 1% fee can become significant over the long-term.
  10. Diversify. If it can fail, it will fail. Plan ahead for failure.

SIMILAR ARTICLES & IDEAS:

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.

7 more ideas

The Golden Rules of Personal Finance:

  • Spend less money than you earn;
  • Always plan for the future: you should always look forward beyond the current month;
  • Make your money make more money: invest, start...

Investment explained

Investment explained

An investment is a gamble: instead of the security of guaranteed returns, you're taking a risk with your money. 

You can invest in Shares, Bonds, Funds, Government bonds (gilts), ...

How stock markets work

  • A stock market is simply a place where buyers and sellers meet to sell shares.
  • A share is a divided-up unit of the value of a company.
  • Shares exist to boost profits of firms to turn a business into a financial success.
  • Enter a stock market: in return for your cash, a business offers you a share in its future – so you essentially own a tiny slice of that company and become a 'shareholder'.
  • This slice of the company you own can then be traded with anyone who wants to buy it.

Share price of a company can rise and fall

  • The price is initially set by the firm offering shares.
  • Its price on any given day can be determined by poor financial results, the economic health and so-called 'sentiment', ie, if City buyers think a firm will struggle, its price can fall. 
  • Shares are listed on an 'index'.

5 more ideas