How to Invest in Stocks: A Beginners Guide 2024

What You Need to Think About Before Investing in Stocks

You know how everyone's always talking about how important it is to save money for the future? Well, investing is like saving money on steroids!

Picture this: you've got $1,000 that you've saved up from your part-time job or birthday money. If you invest that money in the stock market, it could grow into some serious cash over time.

Check this out:

• If you invest $1,000 and let it grow for 25 years, you could end up with about $10,834.
• If you keep that money invested for 45 years, you could have around $72,890.
• And if you let it ride for 65 years, you could be sitting on a massive $490,370!

That's because, on average, the stock market has historically given a 10% return each year. It's like getting a 10% bonus on your money every single year!

Now, imagine if you started investing a little bit of money each month, like $100 from your paycheck. Let's say you're 18 years old and you start investing $100 every month. By the time you're 63 (that's 45 years later), you could have around $579,983! That's more than half a million dollars that you could use to buy your dream house, travel the world, or even retire early.

If you don't invest, you're not just missing out on the potential to make more money – you're actually losing money. That's because of inflation, which is like a slow but steady drain on the value of your cash. Every year, the money you have saved up is worth a little bit less because of inflation.

So, even though investing might seem intimidating at first, it's really important to start as early as possible. This guide will break down the basics of investing in stocks and show you why it's so important to start building your wealth now, even if you're just starting your adult life. Trust me, your future self will thank you!

1. How to Invest in Stocks Made Easy

An investor with no previous experience can get started with stock investing in just a few minutes.

At its simplest, investing can look like this:

• Open a brokerage account or download an investing app (it’s free)
• Transfer in some money (you could start with just a few dollars)
• Buy stock in quality companies, or buy an index fund (hundreds of stocks all at once)
• Set it aside and let your money grow passively
• Keep contributing on a regular basis to grow your wealth

But to be an effective investor, it pays to do your homework.

Investors may wish to buy individual stocks to improve returns. Or they may wish to explore mutual funds, ETFs, or more safe assets like bonds.

In any case, effective investors will seek to understand what they’re investing in, why they’re investing, and how they can improve their odds of success.

Guess what? You can start investing in stocks right now, even if you've never done it before! It's so easy, you can do it in just a few minutes.

Here's how simple it is:

1. First, you'll need to open a brokerage account or download an investing app. Don't worry, it's totally free!
2. Next, put some money into your new account. You don't need a lot – you can start with just a few bucks.
3. Now, you can buy stocks in companies that you like or believe in. Or, you can buy something called an index fund, which is like buying a whole bunch of stocks at once.
4. Once you've bought your stocks or index fund, just sit back and let your money grow over time. It's like watching a plant grow, but instead of watering it, you just leave your money alone.
5. To really watch your wealth grow, keep adding money to your account on a regular basis, like every month or every paycheck.

But here's the thing: if you want to be a really good investor, it's a good idea to do some research first.

You might want to buy stocks in individual companies because you think they'll make you more money. Or, you might want to look into other types of investments, like mutual funds, ETFs (which are kind of like index funds), or even bonds, which are super safe.

No matter what you choose, the key is to understand what you're investing in and why you're investing in it. That way, you can make smart decisions and increase your chances of making more money.

Let me give you an example:

Say you're really into video games, and you notice that a lot of your friends are playing games made by a company called Riot Games. You do some research and find out that Riot Games is a really successful company with a lot of popular games. So, you decide to buy some stocks in Riot Games because you believe in the company and think it will continue to grow.

Or, maybe you don't want to spend time researching individual companies. In that case, you could buy an index fund that includes a bunch of different video game companies. That way, you're investing in the whole video game industry instead of just one company.

The important thing is to think about your investments, learn about what you're buying, and make decisions based on your goals and what you believe in. If you do that, you'll be well on your way to becoming a successful investor!

2. Understand How Investing Actually Works

You know how everyone's always talking about investing and making money? Well, it's not as complicated as it sounds. Investing is basically just buying something you think will be worth more in the future.

It's kind of like buying a pair of sneakers. Let's say you find a pair of limited-edition sneakers that cost $200. You buy them because you think they'll be worth more later on. A year later, someone offers you $300 for those same sneakers. Boom! You just made a $100 profit by investing in those sneakers.

The same idea applies to other types of investments, like:

1. Real estate: Buying a house or apartment with the hope that its value will go up over time.
2. Index ETFs: These are like baskets filled with lots of different stocks. When you buy an index ETF, you're investing in a bunch of companies at once.
3. Bonds: When you buy a bond, you're basically lending money to a company or the government. They promise to pay you back with interest.
4. Mutual funds: These are similar to index ETFs, but they're managed by professionals who choose which stocks or bonds to include in the fund.

The thing about investing is that you don't need a ton of money to start. You can begin with just a little bit and watch it grow over time. The key is to try to put your money into investments that will give you back more than you put in.

Here's an example: Let's say you have $1,000 saved up from your summer job. You decide to invest it in a popular index ETF that tracks the S&P 500 (which is a group of 500 big companies in the US). A year later, the value of your investment has grown to $1,100. That means you made a $100 profit, just by letting your money sit in that investment.

Of course, investments can also go down in value, so it's important to do your research and not put all your eggs in one basket. But if you start investing early and make smart choices, you could see your money grow in a big way over time!

3. Understand why you should invest

Investing is a way to grow your wealth. Go Deeper

It lays the foundation for a comfortable life (things like buying a home, sending your kids to college, travelling, and starting a business) and retirement.

When you invest, you buy a piece of a company, and your return is linked to its performance.

If your money is in the bank alone, it’s just sitting there losing value (due to inflation). Investing allows you to pursue a greater return over the long run.

While it’s a more bumpy ride, the stock market has always delivered greater returns than most other investments. And it’s delivered far higher returns than cash or money sitting in a bank account.

In fact, the long-term average return for the US stock market is around 10% per year. Some experts believe a safer estimate moving forward is 7% per year. (Schwab predicts 10-year returns of 6.6% for the US market, while Blackrock expects 6.7% returns.)

The magic of compound interest

When you invest money, you benefit from compounding interest.

If you want to be able to afford all the good things in life, like a home, sending your future kids to college, going on nice vacations, or even starting your own business, you have to start investing. It's the key to growing your money and setting yourself up for a comfortable future.

When you invest, you're basically buying a small piece of a company. If that company does well, your piece of the pie gets bigger, and you make money. It's like being a part-owner of the company without having to do any of the work!

Now, you might be thinking, "Why not just keep my money in the bank?" Well, here's the deal: when your money is just sitting in the bank, it's actually losing value over time. That's because of something called inflation, which is like a slow but steady drain on your cash. Investing helps you fight back against inflation and potentially earn way more money in the long run.

Sure, investing in the stock market can be a bit of a roller coaster ride, but historically, it's always given people way better returns than most other types of investments. We're talking an average of around 10% per year! That's a lot better than the measly interest you get from a savings account.

But here's the really clever part: when you invest, you get to take advantage of something called compound interest. It's like magic for your money! Basically, you earn money not just on what you originally invested, but also on the profits you've already made.

Let's say you invest $100 and earn 10% interest. After the first year, you'll have $110. In the second year, you'll earn interest on that $110, so you'll have $121. In the third year, you'll earn interest on $121, and so on. Over time, your money starts growing faster and faster, like a snowball rolling down a hill.

Check this out: if you invest just $100 for a newborn baby and let it grow until they're 65, they could end up with over $49,000! Or, if you invest $50 every month during your 45-year career, you could have almost $435,000 by the time you retire. That's the power of compound interest!

Here's a real-life example: Let's say you're 18 and you decide to start investing $100 every month. You put that money into a mix of stocks and bonds that earns an average of 8% per year. By the time you're 65, that $100 per month could turn into over $500,000! That's enough to buy a house, travel the world, or even retire early if you want to.

So, don't wait – start investing as early as you can, and let compound interest work its magic for you. Your future self will thank you!

4. Understand Diversification

“Don’t put all your eggs in one basket”. We’ve all heard it, but what does it mean?

So you know how everyone has their own style when it comes to fashion or music? Well, the same goes for investing! Your investing style depends on your goals and what you're comfortable with.

Let's say you're the type of person who's like, "I don't really care what I invest in, as long as it makes me money. I don't have time to research a bunch of different things, and I'd rather play it safe." If that sounds like you, here are some good options:

1. ETFs & Index Funds: These are like a mix of different stocks all bundled together. It's like buying a bunch of different brands at once, so you don't have to pick just one. It's a good way to spread out your money and invest in a whole market or industry.
2. Mutual Funds: These are kind of like ETFs, but they're managed by a professional investor. It's like having a personal shopper who picks out the best stocks for you and a bunch of other people who have invested their money together.
3. Bonds: When you buy a bond, you're basically lending money to a company or the government. They promise to pay you back with interest, so it's a pretty safe bet.

On the other hand, if you're more like, "I want to pick the companies I invest in. I don't mind doing some research, and I'm okay with taking on more risk if it means I could make more money," then you might be more interested in buying individual stocks. This means you own a little piece of a specific company, and if that company does well, your stock could be worth a lot more.

Now, here's an important tip: don't put all your eggs in one basket! This is where diversification comes in. It's like not wearing the same outfit every single day – you gotta mix it up.

Let's say you have $10,000 to invest. If you put it all into one stock and that company goes belly-up, you could lose everything. But if you split that $10,000 among 20 different stocks, the most you could lose from one company going bankrupt is $500. By spreading your money out, you're reducing your risk.

Diversifying can mean:

• Buying stocks in different companies
• Buying index funds that include hundreds of stocks
• Investing in different types of assets, like stocks, bonds, real estate, and even cryptocurrency

You don't have to pick just one thing – you can mix and match! Maybe you buy some index funds, a few individual stocks, and a couple of bonds. Diversification is super important for long-term investing because it helps balance out the ups and downs of the market.

Here's an example: Let's say you're really into tech, so you decide to invest $5,000 in Apple stock. That's smart, but it's risky to put all your money in one company. So, you also put $2,500 into an index fund that includes a bunch of different tech stocks, and $2,500 into a bond fund. That way, even if Apple has a bad year, your other investments can help cushion the blow. That's the power of diversification!

5. What's Your Risk Appetite?

Before you start putting your money into stocks, it's important to know what you're getting into. Let me break it down for you in a way that's easy to understand.

What are stocks, anyway?

When you buy a stock, you're basically buying a small piece of a company. It's like becoming a part-owner, but without having to do any of the work. The more stocks you own, the bigger your piece of the company.

Now, you can't just buy stocks in any company. The company has to be public, which means it's listed on a stock exchange. Some big companies, like Apple and Amazon, have their stocks traded on exchanges, but others, like IKEA or TikTok, are private, so you can't buy their stocks.

The price of a stock can go up or down depending on how well the company is doing. If the company is making money and growing, the stock price will probably go up. If the company is struggling, the stock price might go down.

The Stock Market: Where the Action Happens

The stock market is where all the buying and selling of stocks happens. It's made up of different stock exchanges, which are like marketplaces for stocks. The biggest exchanges in the US are the New York Stock Exchange (NYSE) and the Nasdaq.

When a company first decides to sell stocks to the public, it's called an Initial Public Offering (IPO). After the IPO, the stock price will keep changing based on how the company is performing and how the overall stock market is doing.

Making Money with Stocks

There are two main ways to make money with stocks:

1. Dividends: Some companies pay part of their profits to stockholders, which are called dividends. It's like getting a little bonus just for owning the stock.
2. Selling stocks for a higher price: If you buy a stock for $50 and later sell it for $70, you've made a $20 profit.

Example: Let's say you're really into video games, and you notice that everyone is talking about this company called Roblox. You do some research and find out that Roblox is a public company, which means you can buy its stocks.

You decide to buy 10 shares of Roblox at $50 each, so you spend $500. A year later, Roblox has released some really popular games, and its stock price has gone up to $80 per share. If you decide to sell your 10 shares, you'll get $800, which means you've made a $300 profit.

But if Roblox had some trouble and its stock price dropped to $30 per share, your 10 shares would only be worth $300. If you sold them then, you'd lose $200.

So, investing in stocks can be risky, but it can also be rewarding if you choose the right companies. The key is to do your research, understand what you're buying, and be patient. Don't put all your money into one stock, and be prepared for some ups and downs along the way.

6. Know what stocks to invest in

If you want to invest passively in the stock market, the simplest method is to buy index funds.

Index funds mimic the performance of the overall stock market (or at least come close). If you want a set-it-and-forget-it approach, index funds are where it’s at.

If you want to invest in specific companies, there are two main ways to go about it.

The hard way: due diligence

Due diligence is time-consuming and a complicated process for beginner investors. But it's important to understand a company before you invest in it.

You wouldn’t buy a house without checking its foundation. Building an investment portfolio is the same.

“Behind every stock is a company. Find out what it’s doing.” — Peter Lynch

7. How to evaluate a stock

Consider fundamentals as a checklist. If the company matches these basic criteria, then it's worth investigating further.

Alright, so you've got some money and you want to invest in stocks. But how do you know which stocks to pick? Let me break it down for you.

The Easy Way: Index Funds 📈If you don't want to spend a lot of time researching individual stocks, the simplest thing to do is buy index funds. These are like baskets filled with a bunch of different stocks that represent the whole stock market. When the overall market goes up, your index fund goes up too. It's a hands-off way to invest.

The Hard Way: Doing Your Homework 📚If you want to invest in specific companies, you'll need to do some serious research. This is called due diligence. Just like you wouldn't buy a used car without checking under the hood, you shouldn't invest in a company without looking at its financials and understanding how it works.

How to Pick a Winner 🏆When you're evaluating a stock, there are a few key things to look for:

1. Long-term stability: Will this company still be around in 50 years?
2. Growth potential: Can this company keep growing and making more money?
3. Strong management: Does the company have smart, experienced leaders?
4. Best in the business: Is this company the top dog in its industry?
5. Healthy financials: Is the company making money and not drowning in debt?

If a company checks all these boxes, it might be a good investment.

Big Players vs. Regular Folks In the investing world, there are two main types of investors:

1. Institutional investors: These are the big guns like banks, hedge funds, and pension funds. They have tons of money, trade all the time, and have access to fancy research that regular people don't.
2. Retail investors: That's people like you and me who invest our own money. We don't trade as much and only have access to public information.

It can be tough for regular folks to compete with the big players. But an app called Opens.co is trying to level the playing field by giving retail investors access to the same kind of research the institutions have.

Alternatively, you can look at free analysis services like www.analystsnotes.com

Example: Investing in Tesla Let's say you're 21 and you think Tesla is the future of cars. You want to invest, but you need to do your homework first. You'd look at things like:

• Is Tesla going to be around in 50 years, or is it just a fad?
• Can Tesla keep growing and selling more cars?
• Does Tesla have a good CEO and management team?
• Is Tesla the best electric car company, or are there competitors doing it better?
• Is Tesla making money, or is it losing cash?

If Tesla looks good after you've done your research, you might decide to buy some shares. But if you find red flags, like a lot of debt or strong competition, you might look for a different company to invest in.

The key is to take your time, do your research, and make informed decisions. Don't just throw your money at a stock because it's popular or you have a gut feeling. Investing is a long-term game, so pick companies you believe in and be patient.

8. Understand how to buy stocks

So you've decided to start investing in stocks? That's awesome! But before you dive in, let's talk about how to actually buy stocks and some important things to consider.

Practice with Play Money If you're nervous about investing real money right off the bat, you can start with stock market simulators. These let you practice investing with virtual money, so you can get a feel for how it works without any risk. It's like playing a video game, but for investing!

Choose Your Account Type

To start investing for real, you'll need to open an account with a stock broker or an investment app. There are a few different types of accounts to choose from:

1. Standard brokerage account: This is the basic account that lets you invest in stocks, but doesn't have any special tax benefits.
2. Retirement accounts (Roth IRA, Traditional IRA, 401(k)): These are designed to help you save for retirement and offer some tax advantages.
3. Accounts for self-employed people (Solo 401(k), SEP IRA): If you work for yourself, these accounts can help you save for retirement and get some tax benefits.

Open Your Account

Opening an account is usually pretty simple and can be done online or through an app. You'll need to provide some personal info and proof of identity, like a photo of your driver's license.

Fund Your Account

Before you can start buying stocks, you'll need to put some money in your account. You can do this by transferring money from your bank account.

Buy Your First Stock!

Once your account is set up and funded, you can start investing in stocks! The exact process will depend on the platform you're using, but they usually make it pretty easy and walk you through the steps.

Is My Money Safe?

It's natural to worry about the safety of your money when you're investing. The good news is that it's very unlikely for your brokerage to go bankrupt. And even if they did, there are insurances in place to protect your money.

However, it's important to remember that investing in stocks always carries some risk. The value of your investments can go up or down, and there's a chance you could lose money.

How Much Should I Invest?

The great thing about many brokerage accounts is that there's no minimum investment. You could start with as little as $10 or as much as $1,000 or more.

How much you should invest depends on:

1. How much extra money you have to invest
2. How much risk you're comfortable with

A good rule of thumb is to never invest money you can't afford to lose.

Example: Let's say you're 18 and you just started your first job. You're able to save $100 from each paycheck and you decide to invest it. You open a standard brokerage account and, after doing some research, you buy shares in a few different companies you believe in, like Apple, Nike, and Tesla.

You plan to hold these investments for the long term, like 10+ years, so you're not too worried about short-term ups and downs in the stock market. Each month, you continue to invest another $100, buying more shares and diversifying your portfolio.

Fast forward 10 years - your initial investments have grown significantly thanks to the power of compound interest and your continued contributions. You're well on your way to building long-term wealth!

The key is to start early, invest regularly, and stay patient. Don't get too caught up trying to time the market perfectly. Focus on investing in solid companies you believe in for the long haul.

9. Monitor your stocks

It’s a good idea to keep an eye on the stock and ensure that the company is heading in a direction.

So you've bought some stocks - congrats! Now what? Well, it's important to keep an eye on your investments and make sure the companies you've put your money into are still heading in a direction you believe in.

Keep an Eye on Your Stocks

Pay attention to any big news or announcements about the companies you've invested in. Did they release a new product? Are they expanding into new markets? Did the CEO give an interview about their plans for the future? These can all be important clues about how the company is doing.

When to Sell

The main way you make money from stocks is by selling them for more than you bought them for. The longer you hold onto a stock, the more time it has to grow in value.

Ideally, you want to have a long-term mindset when investing. If you buy a stock thinking, "I'm going to hold this for 20 years," you're less likely to panic and sell if the price drops after a few months. Investing is a marathon, not a sprint!

You should only really consider selling if:

1. You've held the stock for a long time and you're happy with the return you've made.
2. Something fundamental changes about the company that makes you lose faith in its future.

How to Make Money (and Not Lose It!)

Here's the thing - if you invest $100 in a stock, the most you can possibly lose is $100. But on the flip side, that $100 could grow to $1,000, $10,000, or even more over time!

The key is to not panic if the stock price drops. Unless the company goes completely bankrupt, the only way you actually lose money is if you sell your shares for less than you bought them for.

If you still believe in the company's long-term potential, have faith that the stock price will eventually go back up. Selling when the price is low just locks in your losses.

Example: Let's say you bought shares of Apple stock for $100 each. A few months later, there's some bad news about Apple and the stock price drops to $80. You might be tempted to sell before it drops even more, but if you still believe Apple is a strong company, the smart move is to hold your shares and ride out the dip.

Fast forward a couple of years - Apple releases some revolutionary new products and the stock price skyrockets to $200 per share. If you had held onto your shares through the rough patch, you'd now have doubled your money! But if you had sold at $80, you would have lost $20 per share.

10. Opportunity Costs

If you're not totally sold on the whole stock market thing? No worries, there are definitely other ways to invest your money and watch it grow. Let's look at some alternatives!

1. 🏠 Real Estate

Investing in real estate can be a great way to build wealth over time. You could:

• Buy a property and rent it out to tenants
• Flip a house (buy it, fix it up, and sell it for a profit)
• Invest in REITs (Real Estate Investment Trusts), which are like mutual funds for real estate

The cool thing about real estate is that you can often use leverage (a.k.a. a mortgage) to buy more property than you could with just your own cash. And if you're handy, you can add value to a property yourself!

2. 🪙 Cryptocurrencies

Cryptocurrencies like Bitcoin and Ethereum have been making a lot of headlines lately. They're basically digital currencies that operate independently of governments and banks. Some people see them as the future of money!

Investing in crypto can be risky - the prices can swing wildly up and down. But some believe that getting in early could pay off big time in the long run. Just be prepared for a wild ride!

3. 🎨 Art & Collectibles

If you've got an eye for art or collectibles (think rare coins, vintage cars, sports memorabilia), investing in these tangible assets could be for you. The idea is to buy items that you believe will appreciate in value over time.

One cool thing about investing in art and collectibles is that you get to actually enjoy your investment - hang that painting on your wall or take that classic car for a spin!

4. 👨‍💼 Starting Your Own Business

If you've got an entrepreneurial spirit, starting your own business could be the ultimate investment. Instead of investing in someone else's company (like with stocks), you're investing in yourself and your ideas!

Starting a business is definitely risky - most new businesses fail. But if you've got a solid plan and a lot of hustle, the potential rewards can be huge. You get to be your own boss and build something from the ground up.

5. 📚 Investing in Yourself

One of the best investments you can make is in yourself and your own skills and knowledge. This could mean:

• Getting a college degree or professional certification
• Taking online courses to learn new skills
• Attending conferences and networking events in your industry

By investing in yourself, you're increasing your earning potential and setting yourself up for long-term career success. Plus, unlike stocks or real estate, no one can ever take your skills and knowledge away from you!

Example: Let's say you're really into vintage sneakers. You start scouring thrift stores and online marketplaces for rare finds. You educate yourself on the history and value of different sneakers. Slowly but surely, you build up a collection.

6. Let's dive into some more conventional investment options that are popular in both the UK and the US.

🇬🇧 UK Investment Options

1. Pensions In the UK

pensions are a common way to save for retirement. There are two main types:

• Workplace pensions: These are set up by your employer. They'll usually match some of your contributions, which is basically free money!
• Personal pensions: These are pensions you set up yourself. You can choose how much to contribute and where to invest your money.

2. ISAs (Individual Savings Accounts)

ISAs are a special type of savings account in the UK. The main benefit is that you don't have to pay tax on the interest you earn. There are a few different types:

• Cash ISAs: These are just like regular savings accounts, but with the tax benefit.
• Stocks & Shares ISAs: These let you invest in stocks, bonds, and funds within the ISA wrapper, so your returns are tax-free.
• Lifetime ISAs (LISAs): These are designed to help you save for your first home or for retirement. The government will even add a 25% bonus to your contributions (up to a certain amount)!

3. ETFs (Exchange-Traded Funds)

ETFs are a type of investment fund that trades on the stock exchange, just like individual stocks. They allow you to invest in a basket of stocks, bonds, or other assets all at once. This can help diversify your portfolio and spread out your risk.

Some popular ETFs in the UK include:

• FTSE 100 ETFs: These track the performance of the 100 largest companies listed on the London Stock Exchange.
• S&P 500 ETFs: These track the performance of the 500 largest US companies.
• Bond ETFs: These invest in a variety of government and corporate bonds.

🇺🇸 US Investment Options

1. 401(k)s In the US

401(k)s are a popular type of employer-sponsored retirement account. They allow you to contribute a portion of your paycheck before taxes are taken out. Many employers will match a percentage of your contributions, which is essentially free money!

1. IRAs (Individual Retirement Accounts)

‍IRAs are retirement accounts that you set up yourself. There are two main types:

• Traditional IRAs: Your contributions may be tax-deductible, and you pay taxes on the money when you withdraw it in retirement.
• Roth IRAs: Your contributions are made with post-tax money, but your withdrawals in retirement are tax-free.

3. Mutual Funds

Mutual funds are a type of investment vehicle that pools money from many investors to buy a portfolio of stocks, bonds, or other securities. They're managed by professional fund managers who make the investment decisions.

Some popular mutual fund companies in the US include:

• Vanguard
• Fidelity
• Charles Schwab

Example: Let's say you're 25 and just started your first job in the UK. Your employer offers a workplace pension scheme where they'll match your contributions up to 5% of your salary. You decide to contribute 5% of your salary each month to take full advantage of the employer match.

In addition, you set up a Stocks & Shares ISA and contribute £200 per month. Within the ISA, you invest in a FTSE 100 ETF and a global bond ETF to diversify your portfolio. Fast forward 40 years - thanks to your consistent contributions and the power of compound returns, your workplace pension and ISA have grown substantially. You're on track for a comfortable retirement!

With any investment, it is important to start early, contribute consistently, and let your money grow over the long term. And remember, always consider your personal financial situation and risk tolerance before making any investment decisions. The key to any alternative investment is to educate yourself and understand what you're getting into. Don't just jump on the latest trend - invest in things you genuinely understand and believe in for the long haul.

Key Things to Remember

1. Invest in companies you understand and believe in for the long term.
2. Don't panic and sell when the stock price drops - ride out the dips.
3. Aim to sell for a profit, not a loss. The longer you hold, the more time your money has to grow.
4. Never invest money you can't afford to lose. All investing carries risk.
5. Be honest with yourself about what your know about the investment.
6. It's your money, don't invest casually with it.
7. There are more deals looking for money than money exists, so don't get FOMO, there is another deal just around the corner.

FAQs

Got some questions about investing? No worries, let's break it down!

Why Should I Even Bother Investing?

You know how everyone wants to have a comfy life - buy a house, send their kids to college, travel the world, maybe even start their own business? Well, investing is how you make that happen! It's all about growing your money over time so you can afford to live the life you want, and even retire someday.

What Should I Put My Money Into?

This really depends on you and your goals. Everyone's different! Some good options for beginners include:

1. Stocks: When you buy stocks, you own a tiny piece of a company. If the company does well, your stocks can go up in value.
2. Bonds: Bonds are like lending money to a company or the government. They pay you back with interest over time.
3. Mutual Funds & Index Funds: These let you invest in a bunch of different stocks or bonds all at once, which can be easier than picking individual ones.

How Much Money Do I Need to Get Started?

Good news - you can start with any amount! Even just a few bucks. The key is to pick an investing app or website that doesn't have a minimum amount to open an account. And if you can swing it, try to invest a little bit consistently over time. That's how you really build up your portfolio.

Could I Lose Money Doing This?

I won't lie - there's always some risk with investing. The value of your investments can go up and down. But here's the thing - if you invest wisely and have a long-term plan, you're way more likely to come out ahead in the end. It's all about playing the long game, and being honest with yourself about what you know and what you don't know. Don't invest in what you don't know.

Where Can I Learn More?

There are tons of ways to learn more about investing! You could:

• Take an online course about the stock market
• Read a book about investing basics
• Listen to podcasts about personal finance
• Try out an investing simulator to practice without using real money
• Join an investing community like Opens.co to access a bunch of educational stuff

Example: Let's say you're 18 and you just got your first paycheck from your part-time job. You decide to put 10% of each paycheck into an investing account. You open an account with a popular investing app that lets you buy fractional shares of stocks and index funds with no minimum.

Each month, you invest that 10% into a mix of stocks and funds. Some months the market is up and your portfolio grows, other months it's down and your portfolio shrinks a bit. But you keep investing consistently.

Fast forward 10 years - thanks to your consistent investing and the magic of compound interest, your portfolio has grown to a sizeable amount. You're not a millionaire yet, but you've built a solid foundation. And best of all, you've made investing a habit that will serve you for life!

The key is to start early, invest regularly, and keep learning. Your future self will totally thank you.