People are creatures of habit.
And, while changing our ways can be tough, starting a new habit is even harder.
Investing is a neglected practice. By the time most people begin to dabble in it, they’re already too late.
That’s why it’s critical to make your first move as soon as possible.
Here are four ways to get started:
#1. Define Your Goal
First and foremost, you must know why, exactly, you’re investing.
Is it to enjoy a comfortable retirement, start a business, or pay for the kids’ college tuition?
Once you know what you want, you can start planning how to get there, how much money you’ll need in the end, and how much you should set aside every month.
By writing down your plan, you also create accountability for the project, since you’ve already put some effort into it.
Moreover, a plan can be broken down into many smaller goals that are easier to meet. For example, a plan to save US$3,650 dollars per year sounds more achievable when stated as a goal to save US$10 per day.
#2. Take Financial Education Into Your Own Hands
Unfortunately, schools don’t teach kids financial education. But they probably should, considering how much of an impact investing makes on our lives.
It’s because of this fear of the unknown that a lot of people stay away from investing. You don’t want to be one of them, so take financial education into your own hands.
You can start by learning the basic terms, like risk and return, the difference between stocks and bonds, and so on. Investopedia is a great place to start. It features an encyclopedia of financial terms and offers several investing guides. You can even create dummy portfolios on the site to practice your skills.
#3. Get Up To Date With Recent Developments
Equally important as learning the basics is staying up to date with the latest news from the financial world.
Policies, earnings season, geopolitical tensions, and so on, all impact the way stocks move. Knowing what’s going on will help you handle the shocks better, as well as anticipate future price moves.
My preferred news channels are Reuters, Bloomberg, and Yahoo Finance. I also enjoy some content from CNBC, though I find their take on news to be exaggerated.
It also helps to follow other successful investors. Ray Dalio, David Rubenstein, and Warren Buffett, for example, often share their insights through interviews on YouTube.
#4. Don’t Panic
Finally, don’t give in to panic.
The stock market is a volatile place. Some days it’s up, others it’s down—with the news exacerbating the situation.
Because of this, novice investors often sell at the bottom and buy at the top—exactly the opposite of what they should be doing.
Fear and greed should never influence your investing decisions. If you feel them creeping in on you, sit tight and wait for your mind to clear.