Learning how to invest in the market stock is been the best thing I ever did. It helped me to grow my wealth, feel confident about my financial future and freed from working longgggg hours in a job.
I don’t understand why schools don’t teach kids how to invest, but in my opinion, it should be a priority in out educational system. Today, I’m putting on my teacher cup teaching you how to start investing in the market stock. Please, don’t call me Professor Rudy. Makes me feel old 😉
The market stock is a wealth accelerator that required little time from you but pays exceptionally well. It’s not a coincidence that almost a quarter of the 400 names on the Forbes list of richest Americans work in investing and finance sector.
I would like to make clear that I’m not trying to push you to make a career out of investing. Simply put: I think every person with savings — no matter which age or amount of money — should invest in the market stock.
I also believe that If you aren’t investing in the stock market yet, you’re leaving a lot of money on the table and risking never retire comfortably.
But with all that said… investing is not as easy as deposit some money in a brokerage account. You need a strategy. So, in today’s post, I’m explaining the very basics — how to get started investing in the market stock without the fear of losing money or doing something “silly”.
First, why is so important to invest in the market stock? Here the benefitS:
- Multiply your saving with minimal effort.
- It helps to reach early retirement.
- Make more money with less work.
- It’s the most tax efficient income.
- Steady cash flow.
For those reasons, I truly believe that market stock investing is an essential ingredient for people that want to retire early and wealthy — no matter how much money you have.
So, in this post, I’m laying out a basic stock market investment guide for beginners. And specifically, how you can get started right away, without using expensive financial advisers or managed funds.
Game on, my friend.
GET AN IDEA ABOUT WHERE TO INVEST
There are a lot of markets where to invest, and can be confusing for the first time investors. Most people believe, that USA is the best option to get started. In part is true, but can be expensive.
If you are an American, investing in the USA market is your best and easiest option, but for outsiders, you better start looking at your local market first.
The reasons are:
- It’s cheaper to trade with a local broker.
- No need to exchange your money as the local market trades with local currency.
- In site assistance. You can walk in your broker office to ask for help if you don’t understand something.
- You know and use the products of many companies listed on the local stock exchange, it’s a no-brainer to invest on them.
There is no shame to start locally. Once you gain confidence and desire to expand to international markets, you’ll have already some basic knowledge to help you expand.
Having said that, if you’re living in a small country with limited listings than is better you start off by opening an international brokerage account. Also, some stock exchange doesn’t offer ETFs (exchange-traded fund) which are the cheapest option to diversify your investments.
ETFs track an index, offering an excellent diversification with the most valuable companies in that sector. Basically, by buying an ETF, you’re buying all the company within that index for a fraction of the price.
For example, the Vanguard S&P 500 ETF (VOO) track the most valuable company in the USA, and management cost is a mere 0.17% per year. Yes, you can buy all the best companies in the USA throughout an ETFs with a single transaction and a very low annuity fee.
OPEN A BROKERAGE ACCOUNT
In order to buy stock, you need the assistance of a stockbroker who is licensed to purchase securities on your behalf.
When investing locally, I recommend using a broker affiliated with your bank, if available. It’s convenient to transfer money from and to your bank account.
Most local brokerages charge similar fees, and in my experience is not worth to look at the pennies. Some broker might have a better trading platform than others, but for beginners isn’t that important. What is important is to get started without procrastinating.
Now is the time to take action, are you ready? Call your bank asking if they offer brokerage services.
Don’t forget to opt for an online account so you can trade from the comfort of your couch. If you aren’t a tech savvy, you can use a full-service broker placing orders by phone.
International brokerage. There are reputable international brokers when planning to invest in the world markets. The majority are located in USA offering very low fees and access to multiple markets.
However, there is some extra paperwork to get started, plus you’ll have to transfer money incurring international fees and in most cases, convert currencies that add another layer of cost.
Keep in mind when opening an international account to select your home country currency if available. If not, go for US dollar as the majority of stock trade in the New York Exchange.
GET EDUCATED; KNOWLEDGE PAY THE MOST
Now you’re ready and so much excited to buy your first stock. Welcome to the investor world!
But before bluntly buy some stock, get yourself educated.
You don’t need to get a diploma or attend university (I think don’t exist one for investing) for years, simply learn some basic and invest with common sense before jumping in. Just think about it; would you ever plan a dinner with your friends without recipes?
Just think about it; would you ever cook for your friends without recipes? Stock investing isn’t any different.
I know how attempting is to get started, and that is a good thing because it means that you’re motivated and eager to make a change to your financial life. However, you want to have a clear strategy of entry and exit, so to keep the emotions under control.
You might know this, but is worth repeating; investing is a very emotional experience. Seeing your portfolio stocks going up, feels great. On the other hand, seeing your stock going down not only feel depressing but might affect your personal life such having a bad mood or even not be able to sleep.
The stock market goes up and down all the time, something similar to a roller coaster. That’s is how it is, and you can’t change it. But what you can do is to keep your emotions in check by writing down a crystal clear strategy for your portfolio.
So, once the stock market goes in correction, you don’t panic. Instead, calmly you add in the position. At the core, investing is a simple equation; Buy low and sell high.
Look, when I first started, I was buying and selling stocks all the time feeling so nervous about any price changes. Over the years, I learn to accept the mechanic of the market stock, adapt to it, and benefiting from my strategy.
With time, not only you’ll get better, but also feel proud of your achievements. Remember, this is a journey, not a destination.
Below, few articles to get you started with your investment journey:
- Couch Potato Investing – The lazy way to wealth
- How most investors lose money in the market stock
- Do you want to invest in good stocks? Use common sense
Have fun!
If you have any questions, just holler down below. What are your investment strategies? Leave a comment — I’d love to hear ’em!
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2 comments
How much would you suggest I start with to get my feet with in the market, I cannot afford to lose much but I have to start somewhere.
Start with only what you’re comfortable to lose. Think it as a learning fee.