How To Invest

Have you ever heard of Warren Buffett? The most well-known and successful investor of all time? One of the top ten richest people on the planet? He started investing at the early age of 11. He bought 3 shares of Cities Service preferred stock, which totaled $114.75 in 1942. Despite the stock’s drastic drop in price immediately after, lessons were learned, and the greatest investor was born. In Warren Buffett’s own words, “The best time to invest was yesterday. The second-best time is now.

What is investing really? It is defined simply as putting your money into assets in order to reach a certain financial goal. People invest all the time because it is a means of gaining the funds they need to achieve future financial stability and security. Starting at a young age gives you more time to improve your investing skills, so that one day, you too can stand tall amongst the billionaires.

Investing young is easier than most believe it to be. While you may not be able to directly open a mutual fund account, your parents have the ability to open an account under your name and operate it on your behalf. If you’re wondering what a mutual fund is, it’s pretty simple. It’s a way to pool your money with the money of many other investors, which is then invested in a number of companies and assets by investing experts. This helps your money grow faster, and by the time you’re an adult, you’ll have earned a large enough sum to do with as you please.

Although mutual funds are the easiest way for children under 18 to invest, there are different types of assets. Like stocks and bonds. Thinks of stocks like a small portion of the company that you own. If the company does well, the value of the stock will rise, and your profit will go up. Stocks are thought of as high-risk investments. They’re hard to predict and can lead to significant losses, but potentially stocks can lead to a high reward. Bonds, on the other hand, are considered low-risk. The downfall is that they’re also low-return. With bonds, you lend money to a business, and when the money’s returned, you get interest. Expert investors try to invest in a range of investments, like stocks, bonds, and other assets to minimize loss. Basically, it makes you less likely to lose a lot of money if one type does badly.

Before you start investing, it’s important to think about the factors you need to consider when deciding what businesses to invest in. While risks may seem necessary for big profit, you need to find out how much risk you’re willing to take. Your answer can influence whether or not stocks or bonds are meant for you. Similarly, you have to keep your goals in mind. Are you saving for a short-term or long-term goal? If your goal is long-term, do you see your asset and selected business giving you that profit by then? Think about your timeline and commit to a period of time where you can keep your investments longer. As Warren Buffett said, “You can’t produce a baby in one month by getting nine women pregnant.” It’s important to invest in a business that fits all your requirements.

Now that you know the basics, here are some expert-level tips that can maximise your profits.

1. Never invest all of your money - If the value of the asset decreases, and things don’t go as planned. You may lose all your money. It’s always better to keep some of your money in a savings account and to spread the rest over a mix of investment options.

2. Invest regularly - Adding more money to a stock that you’re certain is going to go up in value can double, or even triple, your profits.

3. Think long-term - If an investment isn’t doing well at the moment, don’t remove your stocks hastily. Always consider the potential it has for the future.

4. Invest in businesses and companies you’re interested in - If you know a lot about the company, you’re bound to know about their potential. If you think that the company’s value will increase, or the upcoming products will trend, go with your gut.

Now it’s your turn. While it may take several tries to succeed and profit from your investments, investing is about learning from your mistakes.  ​​Remember, even the richest investors started small. Start now to build your financial future.