Smart investing helped me reach financial freedom. So, I want to share my best investing tips.
These tips have generated solid long-term investment returns for me and many other good investors. Most importantly, stick with me to the end, where I will show you how these smart investment tips will turn a little of your money into a lot!
Let’s get moving.
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Easy Investing Tips for Beginners
1. Think Long Term
First, refrain from investing if you want to get rich quickly. However, on a positive note, a combination of dividends, rents, and capital gains can easily achieve annual investment returns of roughly 10% over the long run.
But remember this point: Investment values can decrease, sometimes by a lot in the short term. For example, I’ve been invested and stayed invested during the following times of economic turmoil:
- 20% stock market drop on black Monday in 1987
- The bursting of the Internet bubble in 2000
- 2007-2008 banking, real estate, and financial crisis
- The pandemic-induced collapse of 2020
So, having a long-term mindset is critical to staying invested through difficult times. Successful investors make the most money at that time, precisely when there is panic among the masses.
Finally, what is long-term? I suggest at least five years. However, in my case, it’s a lifetime of making long-term investments.
Related reading: How to start investing in cryptocurrency: A full Guide
2. Determine Your Investment Objectives
Knowing why you desire to invest is essential to cultivating a long-term mindset. Thus, you must understand your investment objectives.
Some possible objectives for investing include the following:
- Long-term wealth accumulation
- Participating in the stock market
- Financial freedom at a young age
- Supplementing cash flow with dividends
- Financial planning for retirement
Thus, what’s your reason as a beginning investor?
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3. Adopt An Investing Strategy
Understanding your investment objectives makes selecting an investment strategy easier since not all investing strategies are created equally.
I classify investment strategies into three different buckets as follows:
1. Higher income but lower growth potential for conservative investors.
2. Higher growth but lower income for more aggressive investors
3. Growth and income for investors seeking a balanced portfolio.
4. Choose Your Investments Wisely
Having a preferred strategy makes choosing investments easy. For example,
Conservative investors should focus on certificates of deposits, money market funds, and bonds.
Aggressive investors should focus on stocks.
Real estate is a good addition to any investment portfolio through your primary residence or a rental property.
Furthermore, stock investing is simplified by choosing index, exchange-traded, or mutual funds.
Finally, I prefer dividend stocks for the balance between growth and income they provide. I recommend this excellent resource to learn about dividend investing:
Must Read: 5 Realistic Ways To Make $10k a Month in 2024
5. Invest Regularly
From investing tip #1, we know a long-term investment horizon is vital. However, short-term thinking also comes into play.
Specifically, invest money regularly.
To do so, I believe in dollar-cost averaging into stocks. Thus, I allocate money monthly for stock investments since one of my goals is to invest monthly.
Okay, we are halfway done. So, let’s keep moving. And be sure to save this Pinterest pin so you can return to this post later.
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