If you’ve always wondered how to build your financial portfolio, we’re here to help. This post on investing for beginners is designed to help you understand many of the basics. Plus, we’ve included tons of resources to check out for a more thorough understanding of the wealth process.
How to Start Investing in Stocks
For over a hundred years, Americans have sought wealth by investing in the stock market. As a beginning investor, you might feel a little overwhelmed by the process or not entirely sure where to begin. That’s okay. We’ve put together a basic primer to get you started. Plus, we’ve included a few of our favorite resources to help you learn more about investing for beginners.
Stocks for Beginners – Investing Basics
If you’re interested in investing for beginners, you’ll want to start with the very basics. Buying stocks generally comes down to a company offering shares of their business in exchange for payment. By purchasing a share, you effectively own a very small percentage of that company.
While there are a few more details than that, this is the basis of investing in the stock market. But if you’re looking to learn how to invest in stocks for beginners with little money, keep reading.
Smart investing for beginners starts with research. Before you spend a dime, take the time to learn about the various options available. Also, learn why even investing in a fraction of a share is still better than spending your money on something else. Investing online is easier than ever, so it really is a good time to get started, even if you have a limited pocketbook.
So, how much money can you make investing? Well, here is a handy calculator to help you get started in formulating your investment plan.
Types of Investing for Beginners
There are multiple types of investing, too. Day trading involves purchasing and selling the same security within one trading day. For example, buying a stock in the morning, seeing it rise by noon, and selling it before the closing bell. Swing trading is similar but involves a few days to a few weeks of time between purchase and sale.
Then there are longer-term investments. This is where you buy a stock and keep it for a few years or even decades. The price of each share can vary significantly from the time you purchased it until you’re ready to sell. In addition, the company could sell out to a larger organization or otherwise go broke. Long term investing can, at times, be just as risky as short term. Understanding the difference is crucial when learning about investing for beginners.
Some people opt to use the money in their retirement accounts to trade stocks. In fact, this is one of the first steps people take when learning about investing for beginners.
The most common way to do this is with a Roth IRA. Unlike other options, this is where you contribute to your retirement with after-tax dollars. Since you’ve already paid on them once, you aren’t taxed again when you make a withdrawal later in life. You can also use these funds to buy stocks, bonds, and more to grow your wealth. In some cases, people refer to this as making your money work for you.
Aggressive vs. Safe Investing
Two more terms you’ll want to familiarize yourself with when learning about investing for beginners is aggressive and safe. Those with so-called safe portfolios tend to stack them with bonds and money market funds, which have a lot less risk. In contrast, aggressive portfolios have more stocks, which carry a greater level of risk but could also have a better return. For most people, somewhere between the two is the ideal place to be.
Some stocks offer dividends, which are a portion of the companies profits returned to shareholders in the form of a check. If you own a considerable number of shares of one company, this can be a lucrative way to make reoccurring income from your investments.
The Best Podcast for Beginner Investors
One of the easiest ways to learn about investing for beginners is to listen to a podcast. There are literally tons of different ones out there to help you understand the best ways to grow your portfolio. But these are a few of our top picks.
Mad Money with Jim Cramer
Host Jim Cramer is one of the top money managers on Wall Street. He uses the podcast to share his thoughts on the best financial investments, answers questions, and gives his picks for the best buys. Find it on iTunes here.
The cool thing about the Motley Fool podcast is that it isn’t just one. In fact, there are five different shows to listen to. Each one provides solid advice about investing for beginners and new episodes get added all the time. Check out their website now to start listening.
The Rich Dad
Widely known for his books, seminars, and more about investing, Robert Kiyosaki is almost a household name in the financial education niche. The Rich Dad podcast follows this same tradition, providing both money and life advice with tons of special guests. There is a whole catalog of previous episodes to listen to on the podcast website.
We Study Billionaires
Hosted by Preston Pysh and Stig Brodersen, We Study Billionaires covers how some of the richest people on the planet accumulated their wealth. With over three hundred different episodes to listen to, it really is a good guide in investing for beginners. Click here to learn more.
The Peter Schiff Show Podcast
As an economist, Peter Schiff understands what it takes to go from beginning investor to master of money. His weekly podcast offers all sorts of advice, buying picks, and fundamentals. Listen on Apple Podcasts now.
The Best Investing Books for Beginners
Of course, sometimes you want to pick up a book and learn about investing for beginners that way. Not a problem! We’ve compiled a few of our favorite money books to help you get the fundamentals necessary for success.
Investing for Dummies
Widely known as one of the best basic guides for personal investing is Investing for Dummies. It is a great reference if you’re totally new to the concept, yet want to dabble in making money. It covers stocks, bonds, real estate, and more.
The Total Money Makeover
If managing the money you currently have or abolishing debt is a priority, then you’ll want to read Dave Ramsey’s Total Money Makeover. This title helps walk you through what it takes to live debt-free while using your extra money to build wealth.
Seven Years to Seven Figures
For more advanced beginning investors, check out Michael Masterson’s Seven Years to Seven Figures. This book gives you a road map of what to do to accumulate seven-figure wealth in only a few years. In addition, it includes real-life stories of those who followed the same path and succeeded.
Stock Market Investing For Beginners
If you’re really new to the concept, you’ll enjoy Stock Market Investing for Beginners by Tycho Press. This great book walks you through processes, jargon, and top tips for succeeding as an investor.
The Best Investing Apps for Beginners
Not all investing happens in a financial planner’s office. There are plenty of handy investment apps out there, and we’ve detailed a few to help you get started.
Known as the finance super app, M1 Finance allow novice investors the chance to automate their portfolio with a few taps of the screen. Buy shares, balance your funds, and even apply to borrow money to invest more.
Designed for ease of use, Robinhood is a commission-free investment and stock trading app. Users can even trade fractional shares, which is ideal if you’re starting out with a limited budget.
The Thinkorswim app is a product of TD Ameritrade, which is one of the biggest financial planning companies in the United States. It is a bit more technical than other trading apps. But it does give a wide range of flexibility for beginning investors to get started quickly.
If you’re looking for a quick way to start investing as a beginner, you’ll love Stash. This easy-to-use mobile app allows you to quickly browse and buy stocks for as little as five dollars.
The feature that makes the Acorns app different is savings. It actually takes change from your everyday purchases and makes it easy to use for investing. For example, if you spend $4.25 on a coffee before work, the app will take $0.75 and set it aside to invest later. It might not sound like a lot, but the amounts can really add up. This helps even the most clueless of beginners start the process of investing.
The Best Investing Brokers for Beginners
So, maybe investing on your own isn’t your idea of fun. That’s fine. There are plenty of great brokerage firms around the country for you to sit down with an advisor. From there, he or she walks you through the investment process depending on your needs. It’s a great place to start when learning about investing for beginners.
With over $3.3 trillion in client assets, Charles Schwab is the third-largest banking institution in the United States. Their advisors can assist with everything from retirement planning to stock investments. Those who are really new to investing for beginners will appreciate the advice they have to offer.
As a subsidiary of Charles Schwab, TD Ameritrade offers a modern way to start investing for beginners. Instead of meeting with a broker in person, their desktop trading tools make it easy to get the advice needed virtually. This makes it easier to buy and sell stocks.
Similarly, E*Trade is a modern subsidiary of Morgan Stanley. While the parent company handles traditional investing, this smaller arm makes it easy to invest. In fact, you can do so without ever leaving your home, thanks to a robust online app. It’s a great option if you’re interested in investing for beginners.
While they do offer investment options, SoFi is essentially a financial institution like any other bank in the United States. They offer checking accounts, loans, refinancing, insurance, and more.
Those that need a little more guidance before investing will love Interactive Brokers. Get in touch with an expert from the comfort of your own home. But also enjoy the flexibility of making trades yourself when you’re a little more comfortable with the process.
Topgraphs is a program where you can find undervalued stocks faster while having all the fundamental data in view immediately so that you have more access as an investor.
Investment Videos Every Beginning Investor Needs to Watch
Another excellent way to learn about investing for beginners is through YouTube. Here are a few of our favorite informative videos for you to watch.
Stock Market Investing For Beginners 2020 | How To Invest (Step by Step)
In this video, Nate O’Brien breaks the basics of investing in the stock market step-by-step to help make the process easy to understand. Plus, he discusses how to do your research and improve your results. It’s a great primer when learning more about investing for beginners. Watch it here.
Warren Buffett: How To Invest For Beginners
He’s one of the top billionaires alive today. That’s why it is easy to say that Warren Buffett knows a thing or two about making money on the stock market. This video explains his top tips and why you should follow them. If you’re just starting out learning about investing for beginners, you need to see this one. Take a look for yourself.
How To Invest In Stocks For Beginners (2020 – 2021)
The recent ups and downs in the economy make it a little more difficult to get started in investing for beginners. This Cooper Academy video helps make it easier to understand what you need to do to see success now. Plus, it also details why now is still a good time to jump right in. Give it a watch now.
Is Bitcoin a Good Investment?
These days, you can’t have a solid discussion about investing without talking about Bitcoin. This cryptocurrency gained tremendous popularity in recent years and many people feel it is a better option than stocks or bonds. Here’s what you need to know.
What is Bitcoin?
In simple terms, Bitcoin is a digital currency created in 2009 by someone using the pseudonym Satoshi Nakamoto. Unlike global currencies, there is no physical coin or bill and record of all investments remain listed in a centralized ledger system called Blockchain.
Bitcoin for Beginners
Learning how to invest in Bitcoin takes a little research. That said, there’s almost too much involved to really explain it all here. Instead, we encourage you to check out this Investopedia page, which details the process extensively. You’ll also find some pretty in-depth explanations of the Bitcoin wallet, which is where you keep your cryptocurrency. Then you can learn about the process of Bitcoin mining and adding new currency into the ecosystem. Plus, check out the current price of Bitcoin for today.
But, be aware that like anything else related to finance, there are plenty of Bitcoin scams out there. If it sounds too good to be true, it probably is. Make sure to do your research before investing in Bitcoin. You can easily lose everything if you are not careful.
Believe it or not, Bitcoin isn’t the only cryptocurrency out there. You can easily invest in others, which have a chance of giving you a return. While it is still risky, the process of investing in a new currency can be a lot of fun. Plus, it might make you quite wealthy if it turns out to be a winner in the future. Here’s a good list to get started.
What do you think?
Are you interested in investing after reading this blog? Let us know! We also have other types of blogs if you are interested. Here is one all about credit card processing. Look around, you might find something you like!
In the US only licensed and/or registered investment advisers can offer investment advice. The above references an opinion and is for information purposes only. It is not intended to be investment advice. Seek a duly licensed professional for investment advice.