Most people think of things like stocks and bonds when they think of investing, but investing is actually a much broader concept.
It’s one you’re probably already applying in your life today, even if you don’t think of yourself as an investor.
Investing is defined as expending capital—which for most individual investors, is money—in the hopes that you’ll earn a profit.
That’s the difference between spending and investing: If you spend $100, you don’t expect to get it back. If you invest $100, you’d expect to get back more than $100 at some point in the future.
When you think of it that way, you’ve likely invested in some things that don’t seem like “investments.”
You might have invested in your education by completing a degree with the expectation that it would help you earn more money in the future, or invested in a house that you think will be worth more when you’re ready to sell.
Investing can seem intimidating, which is why it’s helpful to remember that you’ve already made several investing decisions in your everyday life.
Sure, there are a few more intricacies when it comes to “traditional” investing, but it’s just another way to grow your money that you haven’t learned about yet.
No one knows how to buy a stock before they do it the first time, just like no one knows how to buy a house before they do it the first time.
Luckily, they’re both things you can learn—and they can both have a great impact on your overall finances.
How Can I Invest My Money?
So you’re ready to start investing your money—that’s awesome.
Over the past few years, new technologies have emerged that make investing simpler, more affordable and accessible to everyone.
For example – Twine uses an algorithm to build portfolios customized for you and your situation. Then the money you contribute is automatically invested according to your preferences.
Leveraging smart technology and low-cost ETFs keep the total costs down for you – the investor.
When Should I Start Investing?
Lower costs and smarter technology means it’s easier than ever for an investor to get started.
We’re not just saying that.
Today, you can start investing in minutes – and with as little as $5.
You might think that investing $5 won’t make a big difference to your bottom line, but the most important step on a financial journey is the first one – getting started.
If you start small – and find ways to save more as you go – you can take advantage of the power of long-term investing.
Don’t worry – we’re here to walk you through every step and help you feel as comfortable as you would investing in anything else.
Before getting into the nitty-gritty, there are three high-level stages of investing to understand.
Make a Plan
Just like you wouldn’t sign up for a degree program without a plan about what you want to get out of it, you shouldn’t invest your money without a plan for what you want to achieve.
- Should I Save or Invest?
- Understanding the Stock Market
- Long-Term Investing
- The Relationship Between Risk and Return
Once you’ve got a plan in place, it’s time to put it into action, and this is where a solid understanding of investments terms and practices comes in handy.
- Investing for Beginners
- The Benefits of Diversifying Your Investments
- Types of Asset Classes
- 5 Common Investing Mistakes
Now that you’ve got your money into the market, there’s still a bit of ongoing maintenance required to make sure you’re on track to hit your goals. Even the best car, on the best road, needs someone to steer it so it stays on course, you know?