Hey everyone! Over the first week of 2022, I have decided to start a YouTube channel to share with you guys more on the topics I write about in this blog.
I felt that starting the channel can give me the opportunity to get to know some of my readers better or even build some sort of closer connection with you guys.
Over the past few months back in 2021, I have a few friends who asked me about how they can get started in investing and resources on the internet can get quite confusing because many “investors” are just “traders”.
So in the first video on my channel, I made a video about how anyone can get started with investing the right way.
I am not a financial advisor so please do your due diligence. The things I share about in the video is based on my experience with investing and the books I read.
For those of you who prefer reading, this article will summarize what I’ll be sharing in the video.
1) Investing vs Trading
The first point I talk about in the video is before you start putting your money in any investments, you have to understand what is the difference between investing and trading.
Many new investors are often misled by the general public i.e The Social media, to think that trading is the same as investing. However, they are not the same.
Real investing is boring and it requires patience to hold onto a stock for long periods of time, 10-30 years, whereas trading, requires you to consistently time the market’s bottom and top for long periods of time to actually take advantage of compound interest.
2) Types of investments
Whenever you hear people talking about the “market” they are usually talking about the US stock market or the S&P500.
However, there are different asset classes for you to choose from such as REITS, Bonds and Cryptocurrencies.
3) Which one is best for you?
You have to look at 3 factors to determine which investment is right for you.
- Time horizon
- Risk tolerance
If you are in your 20s and have just graduated college, you’re considered to have a longer time horizon for your investments, compared to when you’re in your 50s or 60s.
This also correlates to your Risk tolerance and commitments. If you are younger, it is recommended to take on slightly more risks in your investments as you can afford to make the money back in the years to come in case things get ugly and also, you should not have commitments such as having children or paying for a house holding you back.
4) Stocks & Crypto
If you have a long horizon for your investments to grow, do not have any commitments, able to and prepared to take on higher risks, you should put your money into stocks and specific cryptocurrencies. Though some cryptocurrencies might be controversial, we will look into the specific cryptocurrencies you should put your money in.
5) Bonds & REITs
If you are on the opposite end of the spectrum, and planning for your retirement but do not want inflation to eat your money away, you should consider putting your money into Bonds & REITs.
6) Compounding your money
Lastly, the act of investing is essentially taking advantage of compound interest whereby you are “putting your money to work”.
Instead of trying to time the highs and lows of the market and making it seem like an enjoyable game (which it really shouldn’t be), it is recommended to use that time to find other ways to make more money so you can invest even more money to compound your money faster.
That is the end of the things I talk about in the video, I hope this helps you in some way and if you are keen to learn more, do sign up to my email list and subscribe to my YouTube channel.
I will be making more videos talking about personal finance, self-development and productivity.
If you enjoy the video or article, you can check out the previous article written by Desean as he shares with you some of the best productivity tips to work from home.
You can check out my YouTube channel here.