Investing For Beginners

Investing for beginners may seem like a lot of information, but slowly and surely, you can learn everything there is to know about growing your wealth. Making smart investments today can set you up for a future of financial freedom for both yourself and your children. No matter how much you earn, you could end up penniless one day if you don’t learn how to make the most of it. And if you don’t earn all that much, that doesn’t mean investing isn’t for you either. Whether you earn a huge salary or an average one, you can grow your wealth significantly and secure your future with a few smart decisions today. Read on to find out more about investing for beginners and how growing your wealth can be simpler than you think.

Who Can Invest?

Too many people seem to think that investing is for the wealthy and that couldn’t be further from the truth. Everyone can and should invest in their future by putting money away and letting it grow. Even tiny amounts can grow exponentially over time. If you start saving early on in your life, even a small savings can grow into substantial savings. You don’t have to own a business or have a high paying job to accomplish this. Wealth management is important for everyone and learning more about investing for beginners can help you achieve your financial goals.

Tips On Investing for Beginners

If you’re considering learning more about growing your wealth – and you should be! – you’ve come to the right place. Here are some of our best tips on investing for beginners.

Save Money Before You Start to Spend

Before you get the chance to spend your paycheque, be sure to pay yourself first and put some money away. Once the money you want to save has been removed from temptation’s path, you are free to live off the rest. The golden rule is to save at least 10% but if you can manage to save 20% of your income, that’s even better. Evaluate every last expense you have. You may find that many of them are wants and not needs. You can always scale back at least a little bit and have more money to save. Whatever you save and invest today can grow into a huge amount by the time you retire if you invest correctly.

Create a Budget – and Stick to It!

To ensure you always have enough money to save and you don’t overspend, create a spreadsheet to track all of your incoming and outgoing funds. This will help you keep track of your spending and make sure enough money to put aside for saving and investing. If you overspend, you may not have much money – or any at all – to put away for your future. Avoid getting caught up in debt and ensure you have a clear view of what you have, what you can save, and what you can spend.

Meet with a Financial Advisor

Saving money is a great first step but knowing how to invest that money can make all the difference. Earning 1% interest in a savings account won’t do much for you. Investing in stocks or mutual funds may bring in much higher return. Of course, if you’re new to the world of wealth management, you may not be sure where to start or how. Meeting with a financial advisor can help you to understand the investing options out there and how compound interest works. A. good financial advisor can help you find the right investments for you and help you grow your wealth considerably over time.

Diversify Your Investments

It’s always recommended to diversify your investments. You don’t want all of your eggs in one basket. There are always ups and downs in the economy. When certain investments do poorly, others do well and vice-versa. Diversifying your investments will ensure your portfolio is balanced and that you always own something that is performing and compensating for those that are under-performing. You can also invest in real estate as another way of diversifying your portfolio. This can be an opportunity to generate passive income in the future.

Start a Side Hustle

If you want to bring in more money to spend and save, then considering adding a side hustle to your daily life. Yes, this means working more. But one day, working will no longer be an option for you. When you are young and able to, get as much work as you can and grow your earnings. This will give you plenty more money to save. The more you save today, the more you’ll have tomorrow.

Invest in a Registered Retirement Savings Plan (RRSP)

Investing in RRSPs should be an automatic yes for you. Investing in RRSPs has more than one advantage. The main advantage is that you will be able to grow your wealth through compound interest over the entire course of your career. By the time you retire, you’ll have a nice lump sum to lean back on. Another advantage is that you can use whatever you save and deduct it from your taxable income. This could mean that the taxes you pay regularly are now too much and will result in the government providing you with an income tax return cheque every year. Yes, you will have to pay taxes on the RRSP money you take out when the time comes. But between now and then, you are taking income tax benefits in and you’re earning interest that by far outweighs the taxes you’ll inevitably pay when you cash out.

Learn About the Stock Market First

The stock market can seem like a scary, risky place, but if you invest wisely, it can actually be a very easy way to earn lots of money over a long period. Before you start investing in the stock market, meet with a broker to learn more about how it works, when to buy, when to sell, and what to expect. If you’re expectation is that you will invest a small amount today to become a millionaire tomorrow, you’ll be surely disappointed. The stock market is about long-term financial growth, not immediate profit. It takes time for stocks to bring in money but if you’re patient enough, you will reap the benefits someday.

Learn About Government Help

Did you know that if you invest in a Registered Education Savings Plan (RESP) for your child, the government will offer a grant of $500 for every $2,500 you invest? The federal government will provide up to $7,000 in grant money over 18 years. The earlier you collect the grant money, the sooner it begins collecting interest. Learn about all financial aid and grant programs from the federal and provincial governments to help maximize your financial savings and investments over time.

Learn About Wealth Management

Speaking with a financial advisor will help you understand more about how to maximize every dollar you have and save. For example, let’s say you are buying a new car and the interest rate is 7%, but your mortgage is only 2% interest. It would make the most sense to borrow money against your home rather than by taking out a 7% interest rate loan from the dealership. You want to manage your wealth by making the smartest and most cost-effective financial decisions.

Be Prepared for Some Loss

You have to fully understand how investing works to avoid being disappointed or making rash decisions. In the long-term, investing will always help you grow your wealth. But every now and then, there are short-term setbacks Wen the economy takes a dive, you will notice your investments drop. Just wait it out. They will regain their value as things pick up. If you rush to sell, then you have a loss and now you’re down and out. Understand that it’s normal for investments to have ups and downs. Try your best to look at the bigger picture. Overall, you stand to grow your wealth significantly by investing.

Invest in Appreciating Assets

You can’t save every cent you earn. You of course need food, a home, and other necessities. However, you should aim to put more into appreciating assets, like your home or your investments, than in depreciating assets like cars, designer shoes, fancy clothing, and other non-essentials. Spending money on non-essential items that don’t bring you any return is basically money lost. It’s normal to buy some of these things, but remember to give your appreciating assets priority when it comes to spending your money.

Start Small

You don’t have to have $100,000 laying around to start investing in the stock market. You can start very small and buy a handful of stocks. It may not seem like much but if you invest in secure stocks that offer long-term growth, you will grow your wealth significantly. Over time, you will be able to slowly add more to your stock portfolio and grow your investments wisely. If you wait for a large sum to get started, you risk wasting many years of potential interest earnings while you get there.

Re-Evaluate Often

You have a great investment – amazing! However, things change. Don’t necessarily always stick with the same investments or saving accounts because they were beneficial in the past. A good financial advisor r broker can help you understand when it’s time to make a change and continue to earn more money elsewhere. At least once a year, you and your advisor should take a deeper look into everything you have and see what’s working, what isn’t. In some cases, you may need to wait it out. In other cases, it may be time to change your savings plan or choose different stocks. Eventually, you’ll learn more about is as you continue to review annually with a professional.

Be Patient

If you’re expecting to grow your wealth overnight, you will be disappointed. Accumulating, saving, and growing your wealth takes time. The earlier you begin to invest, the more money you will have in the future. Set realistic expectations and financial goals together with a financial planner so you can get a better understanding of what to expect and when. Slow and steady wins the race.

Different Ways of Growing Your Wealth

If you are interested in growing your wealth, there are several options you can look at. Here are some other investing opportunities that can also help you grow your wealth in addition to stocks, RESPs, and RRSPs.

Real Estate Investing

Investing in real estate isn’t right for everyone. But if it’s right for you, there is certainly lots of money to be made. A good real estate investment could bring you as much as 8% to 10% return on your investment. Of course, you will have to deal with tenants and some other landlord duties, but real estate is a very secure investment and can bring you huge growth over time. To find the right investment opportunity for you, you should meet with a trusted realtor and discuss what the investment needs would be and what you would need to do to manage the investment on your own.

Start a Small Business

Investing in yourself is another great way of growing your wealth. It’s short-term pain for long-term gain. You can take out a small business loan to get started and if your company is successful, it can be a long-term, steady stream of revenue for you. Starting your own business is both scary and challenging. Of course, it also means a few years of hard work for very little in return. However, in the long run, a successful company will be well worth it. If starting a small business is something you think you can do, you should consider applying or a small business loan today and turning your dreams into a reality.

Invest in Dividend Insurance Policies

If you have young children, you can invest in a life insurance policy for them. Dividend policies add on over the years. So, in addition to securing your child a life insurance plan they won’t have to pay for, you are also securing them a way of growing their dividends and increasing the value of their policy without having to do anything at all. Because they’re young, these policies for children are generally very cost effective. You can look into policies such as this for adults, as well, but the cost will certainly be higher.

How Do I Learn More About Wealth Management?

Wealth management and growing your wealth can seem like difficult and challenging topics, but anyone can learn more about these things. Of course, meeting with a financial advisor is the first obvious step to learning more about personal finance, but you also want to be sure that you have an objective viewpoint, as well.

You can find loads of books on personal finance including these:

• The Wealthy Barber by David Chilton
• Wealthing Like Rabbits by Robert R. Brown
• Millionaire Teacher by Andrew Hallam
• The Automatic Millionaire by David Bach

You can also start reading financial news in the New York Times, Globe & Mail, Forbes Magazine, and more. Take the time to read about the economy in your area and globally, as well. This information plays a key role in how the markets function and how you can grow your wealth.

If you still feel as though you don’t have a deep enough understanding of growing your wealth, you can also sign up for courses on personal finance at your local university or online. You don’t need an MBA to understand personal finance. However, a brief introduction into personal finance can help you tremendously on a personal level and with your small business, if you have one.

Is It Too Late to Start?

The earlier you start, the better. However, starting today is better than not starting at all. No matter what you earn or what you have, it’s always a good idea to start investing in yourself and in your future. If you started investing late in life, you can always make things better for the next generation by teaching your children to start investing early on. There are plenty of tips you can learn for teaching children about wealth management and by the time they reach adulthood, they can be expertly equipped to maximize their wealth.

Even if your children can only save small amounts at a time, it’s a good idea for them to learn about saving from childhood. From the piggy bank, to their first bank account, to their first RRSP contribution, learning to invest is important information. If you haven’t started investing yet, meet with a financial expert today to get started and find out how saving even just a tiny bit at a time can help you build the path to a financially secure future. Whatever you can save for your future is a step in the right direction. No matter where you are in your life, it’s always a good time to start investing in growing your wealth.