Investing For Beginners
Accelerated Investment Strategies

In this Investing for Beginners guide, we want to invite you to put aside the traditional "set it and forget it" advice for a minute, and actually flip it on its head.

Here’s why: In today’s economy, building wealth is proving to be possible within a reasonable time frame, not in 3 or 4 decades. You also don't necessarily need a massive amount of capital to get started.

In addition, not all, but most "investing for beginners" guides are either cookie-cutter models filled with platitudes copied somewhere else, or are provided by financial institutions trying to sell you on opening a low-return savings or investment accounts.

This post will equip you with critical thinking, knowledge and strategies to manage your investments so that your nest egg will bloom, not crawl for decades until you’re grey.

Investing For Beginners: Debunking the Myths

Myth #1: You Need a Lot of Money to Invest

This is factually false. The beauty of investing is that you can start small.

Even modest contributions can grow significantly over time thanks to compound interest. With compound interest, the key is to start early and contribute regularly and diligently.

In this particular case, you only need a lot of money if you began investing late and you’re having to play catch-up. Otherwise, you can use fractional shares to buy affordable smaller bits of great businesses (Apple, Alphabet, etc.) and get started.

Myth #2: Investing is Only for Retirement

This is a deadly misconception where your most productive years are literally wasted thinking that retirement investing is for old people.

Retirement investing is now, so that you can enjoy it in later years. That means investing is for everyone, regardless of age or goals.

Investing is for financial security and wealth-building that will help you achieve your dreams

Look at it in layman’s terms: if you want to enjoy the fruits of your garden, do you plant your garden now for later, or do you plant it at the time that you need to eat the fruits?

Time vs. Knowledge: The Winning Formula

Unquestionably, in investing, time is valuable. But knowledge is the key to accelerating your results. That’s the difference between achieving your financial goals in a reasonable amount of time, versus having to wait a lifetime for them.

Today’s plethora of online resources and educational platforms help you gain a strong understanding of investment principles and strategies. You only have to be open to ongoing learning.

Rich people like Mark Cuban will tell you: they spend most of their time reading and gaining new knowledge. Once on top, you must also know or learn how to stay there.

Calculated Risks for Faster Growth

Calculated risks can lead to faster wealth creation, but it’s important to manage your risk tolerance.

Once again, one way to do that is by exploring fractional shares. As we just mentioned, they allow you to invest in portions of expensive stocks in chunks that you can afford right now.

A user-friendly platform like Robinhood can help you get started with this.

Robo-advisors also offer automated investing with a risk-managed approach driven by algorithms. They minimize human error and cost less.

Vanguard, Wealthfront and Acorns are other examples that you can check out to this end, and see if they are a good fit for you.

Invest Like a Business, Not a Gambler

Don't gamble with your hard-earned money. Do some research about companies (example, Tesla and other up-and-comers in the E.V. industry). That means identifying trends in the economy.

Consider “thematic investing”, which is about focusing on sectors with high growth potential.

As just mentioned, electric vehicles might be an area of interest to you as an investor. The renewable energy sector might be another one.

In healthcare, telemedicine might be one as well, with other potential areas serving the growing aging population.

Or maybe you prefer the rapid growth of the Starbuck's type. You get to pick.

The Power of Side Hustles

The era of one-job one-salary carrying you all the way to financial nirvana, may have faded significantly. We are in the midst of the gig economy era. Side-hustles can and often do outperform traditional jobs.

As a novice investor, chances are you want to boost your investment capital by creating additional income streams.

Explore freelance marketplaces, online businesses, or hobbies that generate revenue. Every extra dollar saved can be invested to generate future gains.

Automate, Automate, Automate

Technology is your friend. Use it in every aspect of your financial strategy and it will increase your effectiveness many fold – not to mention alleviate human error and inefficiencies.

You can utilize automated tools to allocate your income, savings, and debt. You can also use automated investing tools. They work extremely well for examples like dollar-cost averaging.

This is a strategy that helps you buy more shares automatically when prices are low, and fewer when prices are high. The end result is averaging the cost of buying shares, thereby passively growing your asset base for less money.

Grow Your Nest Egg

Strategies for Active Investing for Beginners

Now, let's delve into strategies to maximize your investment capital.

Fueling Your Investment Engine: Maximizing Capital

Building wealth starts with maximizing the capital you can invest. It typically involves having or building up a source of capital or personal savings that you can purposefully bankroll your investments with.  This is what that looks like:

Live Below Your Means

This comes first. It sounds simple, but it's crucial, and more importantly, most people simply don’t do it. It’s one of the key reasons most people will never build wealth.

You must start by tracking your expenses and knowing where all your money actually goes.

A nice and free app to help with that was Mint. Unfortunately, it was shut down by Intuit, the company who owns it. They recommend switching to Credit Karma, also free, which they own as well. Rocket Money is another great app for you, with a free version.

These will help you see your spending patterns and identify areas to cut back so you can prioritize saving towards your investment goals. Every dollar you save is a dollar you can invest for future returns.

Go To War Against Bad Debt

Unproductive as well as high-interest debt cripples your investment game like a ball and chain.

We like to use the analogy of bad debt -- including unpaid credit card balances -- as trying to carry a bucket of water that is full of holes. You won’t get far with it.

Consider debt handling strategies like the "debt snowball". It consists in paying off your smallest debt first, then taking the payment money just freed up and using it to pay off the next smallest debt.

You do this until it all snowballs into engulfing your biggest debt. Turn the money saved into more investment capital.

The Side Hustle Advantage

In our era of the gig economy, it’s almost mandatory to explore ways to generate additional income streams.

While others use this to make ends meet, you could turn it into a vehicle to accelerate wealth building.

Whether it's freelance work, online businesses, or monetizing a hobby, every extra dollar earned can be channeled into boosting your investment strategy.

Consistency is key. Even small amounts saved, when invested regularly, can significantly add up over time.

Get Involved: Learning and Sharing

Engage in social media groups, YouTube videos, exposure to success stories, strategies discussions, and the wisdom of experienced investors or educators.

Look for guidance and even mentorship when possible, but beware of gurus promising unrealistic returns. Always do your own research before making financial decisions.

Building Your Personalized Investment Gameplan

• Start by clearly defining your investment goals according to your individual circumstances and how the whole machinery will work as a whole. Different goals require different investment strategies and time frames.
  
  
• Understand your risk tolerance and choose appropriate investments accordingly. How comfortable are you with potential losses or how shaken up will your financial picture be should you experience those losses?
  
  
• Never put all your eggs in one basket no matter how incredible the basket looks. Remember recent examples like Cryptocurrencies or the Dot.com bubble before that, creating millionaires one minute and crashing the next. Always diversify your portfolio.
  
  
• Also, periodically rebalance your portfolio to maintain your desired asset allocation. For instance, if the economy improves, or you’ve paid down major debt, you may have both more income and more savings to reallocate into your investment plan. So, you rebalance the mix.                                                   

Finally, investing doesn’t have to be a lonely journey. You can build a supportive community as well as craft a personalized investment plan for your financial goals.

In Closing: Investing For Beginners Wrap-up

If the first quarter of the 21st Century has taught us anything positive at all, it is that building wealth is not an exclusive domain only reserved for some.

Everyone can have a shot. Investing can be intimidating at first, but the more you learn, the more confident you become.

Just don’t chase “get rich quick” schemes or get lost in the noise. The principles of wealth building are sound and learnable by anyone, and it doesn’t have to take a lifetime to achieve substantial financial independence.

It is also possible to adopt a more aggressive approach. Just know that risk and reward are always intertwined. So, diversify your gameplay to be safe, take some calculated risks, and aim for potentially higher returns. Happy wealth building.

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