Years ago, someone asked me what investment I already had and I was speechless because I had nothing even a simple one. The fact that I'm already working. That's when I started to open my mind to investment. Well, until now I'm still a beginner in investing. However, for today's blog, let me share the ten (10) best advice for investing beginners. Some of these unfiltered advices are from what I've learned and some I've collated from experts' genuine answers.
Are you ready? If so, scroll down.
My Best Advice for Investing Beginners
When my mind was open to investment, I invested first in financial protection which was insurance. Actually, during the time I got my insurance plan, I never thought that protection must be the baseline in managing your finances. It came later on when I learned about the pyramid of financial planning that protection is crucial in building your savings and wealth or growing your money. Now, let me share my best pieces of advice as a beginner in investments.
1. Start with low-risk investment vehicles.
Through low-risk investment options, you can protect your capital and ensure a more stable return on your investment.
For a beginner like me, I highly recommend Modified Pagibig 2 or MP2. It is considered safe and low-risk backed by the government.
It's important to remember that low risk often means lower potential returns. If you're looking for higher returns, you may need to consider taking on more risk by investing in higher-risk assets such as stocks or real estate. Let me know in the comment section if you want more about stocks or real estate.
2. Be sure you understand before you invest.
Don't just throw your money at the first opportunity that comes your way.
Another thing to consider is your time horizon. How long do you plan on keeping your money invested? Are you investing for short-term gains or long-term growth? This will determine the types of investments you should consider.
Investing is a rollercoaster ride, and you need to be prepared for the ups and downs. Markets can fluctuate, economies can collapse, and companies can go belly up.
3. Do thorough research and discover the answer to your question.
Start with a simple Google search. You'll be amazed at how much information is available at your fingertips.
Next, try going to the library. Yeah, it sounds old-school, but libraries are a treasure trove of knowledge.
Remember, research can take time and patience, but the reward is knowledge and understanding. So grab your magnifying glass and start digging.
4. Gradually increase your investment.
Dip your toes in the water and see how the investment performs.
For example, let's say you have Php10,000 to invest. Instead of investing it all at once, you might start by investing Php1,000 and then increase your investment by Php500 every month.
By spreading out your investments over time, you reduce the chance of making a poor investment decision all at once.
5. Seek guidance from reliable experts.
Go online and check out their credentials, read reviews from past clients, and see if they have any certifications that prove their expertise.
Chances are, someone you know has worked with an amazing expert and can vouch for their skills.
Remember, seeking guidance from reliable experts is crucial when you're trying to learn or accomplish something new.
Other Best Advice for Investing Beginners
As you've learned my best advice for investing beginners, I'd like not to be biased here. That is why I've asked some experts or someone who knows start-up investing tips. To be able to do that, I've posted a question in a particular Facebook group (source is below) about what best pieces of advice they can give to a beginner in investment. Without further ado, below are some of the best.
Source: Financial Literacy FB group
6. Try short-term investments for experience.
Short-term investment is all about making quick gains and taking advantage of market fluctuations, without tying up your money for years on end.
The great thing about short-term investments is that they can give you valuable experience in the world of investing without a huge commitment.
Of course, short-term investments do come with their own set of risks. The market can be unpredictable, and prices can fluctuate wildly in a short period.
7. Learn all you can and beware of scammers.
You can learn a lot from the internet, but make sure you're getting your information from reputable websites and sources.
Now, let's talk about scammers. These sneaky little devils are out to take your money and leave you high and dry.
Lastly, don't be afraid to ask for help or advice. Reach out to others who have been through the learning process and see what tips they have to share.
8. Diverse your investments.
Diversifying means spreading out your money across different types of investments, instead of putting all your eggs in one basket.
Not only does diversifying help protect your money, but it also gives you the opportunity for bigger gains.
The key to successful diversification is not just set-it-and-forget-it. Keep an eye on how each investment is performing and make changes as needed.
9. Confirm tax treatments on investments.
Understanding the tax implications of your investments can significantly impact your overall returns and financial success.
It's crucial to stay informed about tax laws and regulations, as they can change.
A tax professional can provide personalized advice based on your specific financial situation and the current tax environment in your jurisdiction.
10. Time in the market is more valuable than timing the market.
It's a common investment philosophy that emphasizes the importance of long-term investing and staying invested in the financial markets over time.
The idea behind "time in the market" is that, over the long term, the financial markets have generally shown a tendency to trend upward despite short-term fluctuations and market volatility.
On the other hand, "timing the market" refers to the strategy of buying and selling assets based on predictions of short-term price movements.
And that's it! Remember, the key to successful investing is a combination of education, discipline, and a long-term perspective. It's okay to start small and gradually increase your investments as you become more comfortable and experienced. The more informed and prepared you are, the better equipped you'll be to navigate the world of investing.
Feel free to let us know what advice resonates with you.
Share your thoughts in the comment section.
Until then!
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