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Basic Investing Tips

by Alice C. Woodhouse
May 25, 2009
Basic Investing Tips: How much money to invest and where do I get that?

For those who haven't dabbled in investing yet, it's high time to learn the ropes. Investing is a broad subject, yet easy enough to get a vague idea of. What makes it complicated is when you start delving in different ways to invest, the kinds of stocks and bonds to invest in, and the calculations on your returns.

You need a lot of information when you're seriously thinking about investing your money. Just the vast array of investment choices, the ropes you need to learn and the risks involved are quite daunting. Sometimes it stops people taking steps in learning about the subject. For those who have no clue where to start, and need to get an idea of the basics of investing, this one's for you:

Several questions pop into our heads when we think about investing our money. First, is it easy for non-businessmen or for those not very literate in the finance industry to get into investing? Then we ask, how did people who have invested in stocks get started? How much did they shell out? Because of these questions, some get confused at the enormity of it all so they procrastinate and in the end never even start at all.

Before you start investing, you have to ensure that your debts are under control, you have moderate to good credit report, have built a sufficient emergency savings account worth 3 months of your cost of living and you're in a 401(k) plan. If you don't meet the requirements and you still want to invest, it's very important that you talk to a financial advisor before anything else. It doesn't bode well to entangle your money between debt reduction, savings and your personal costs, and now you're going to dabble in investing. You don't want to aggravate the situation, that's why it's a must to get your finances straight first.

Most of the stocks, bonds and mutual funds allow investors to start on $500 and if you're lucky, maybe even less. There are people who find a $100 stock mutual fund to invest in and this is a great way to start. It allows you to get a taste of investing, lessen your risk to lose too much money, and a good amount to get trickles of return. Where do you get an extra $100-$500? This is why it's important that you have to get your debts under control, so you can have something left to put away. Save up to get $500 with your next bonus, profits from your overtime work, refund from your income tax, and if you have earned cash from sideline work, put that in as well. You can't get $500 or more overnight, not unless you sell your right kidney to the black market. So it's important to keep it somewhere accessible, like an online account that has high yields yet keeps your money liquid.

Another is to ask the investment company if they offer an option to let you bypass the lump sum payment and start investing as soon as possible. There are funds that will allow you to sign up for a monthly automatic withdrawal of $30 - $50 from your checking account.

That is the first step in learning more about basic investing tips. There are more tips to come, which will delve on choosing investments, examining the risks involved in investing and more information about money, stocks, funds, bonds and becoming a good investor.

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Basic Investing Tips




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