4 Ways to Start Investing Money for the First Time

Investing money is a concept that has been ingrained in many of us since an early age. Whether it’s opening a college fund or starting a 401k plan for retirement, getting started with investing can be stressful for some people.

We’re here to explain and give you the tools you need to know how to start investing money for the first time, no matter what your future goals are.

Started with Invest early It is an essential element so that you can benefit from it. compound interestThis is where investment returns generate their own returns, gradually increasing the amount you earn.

We know what you might be thinking, but no, it’s never too late to start. Even if you start investing at the age of 30, all you need to do is understand the basics of investing and then get started!

Hopefully by the end of this post, you’ll know what your options are, how to invest money for the first time, and have your plan in place to get started.

Your Checklist When You Start Investing Money For The First Time

Before you allocate your money anywhere, there are some important steps you should take. You should educate yourself about investment assets, know your risk tolerance, and understand market trends.

A study earlier this year of young people in Asia (aged 18-35 and above) showed that multiple factors influence how they invest their money.

To help guide you on how to start investing money for the first time, we’ve put together an easy-to-follow checklist with the most important factors for investing in mind.

🔲What is your goal?

The first thing you need to do is to define your investment goals. This is a vital step because it will guide your investment strategy. You should define your short-term goals and your long-term goals.

Use the SMART approach when setting your investment goals: specific, Measurable, Realizable, AppropriateAnd time boundThis will help you make your goals clearer and thus make it easier for you to determine which investment assets are most suitable for you.

🔲What is the time frame for your investment?

Short term investments (1-5 years) They often prioritize liquidity and low risk. Long term investments (10+ years) is the period in which you can invest at higher risks to get greater future returns.

🔲 Will you invest periodically?

Also known as dollar-cost averaging, this method means that you make regular contributions to investments in assets regardless of the market. The idea here is that this helps reduce the negative impact that market fluctuations can have on your investment portfolio and helps build wealth over a longer period.

🔲Do you want to do it yourself?

Are you someone who likes control or would you rather pay someone else for this service?

There are many platforms and services that offer help in managing your investment portfolio, which can be useful for beginner investors.

🔲What is your risk tolerance?

This question is about how much you are willing to take or tolerate losses during tough market fluctuations. This may be influenced by your personality which may lead you to make emotional decisions.

Your risk tolerance can also be affected by your age, future goals, and financial situation.

Even if you have a high risk tolerance, it is not advisable for someone approaching retirement to invest a large amount of their savings in high-risk stocks. There is a common sense strategy that should be reviewed before making any investments.

🔲 Have you researched the investment options available to you?

Education and research are the most important tools you can have and can make the biggest difference in your investment strategy. Every option, from stocks and bonds to ETFs and cryptocurrencies, has its own risk-return profile. Understanding how each asset works is essential before investing a single dollar.

4 Ways to Start Investing Money

Now that you have reviewed and evaluated your goals and tolerances, you are ready to start investing towards financial independence.

Here are our suggestions when you start investing your money:

1. Bitcoin Material for Investing in Bitcoin

We’ve all heard about cryptocurrencies and how volatile the market is. But did you know that Bitcoin has had one of the best returns over the past 10 years compared to many other investments?

Over the past decade, BTC has achieved a compound annual return of 60.29%!

Bitcoin Wallet provides you with an easy way to start investing in Bitcoin. It is a cold wallet for cryptocurrencies designed for long-term storage.

To invest in BTC with Material Bitcoin, all you have to do is:

➡️ Buy the wallet from the online store.
➡️Use Material Bitcoin to buy BTC directly.
➡️Safely store your Bitcoin in a cold wallet for long-term growth.

Bitcoin’s benefits have been impressive with its generally high returns, decentralization, self-custodial features and thus its natural ability to hedge against inflation.

2. Exchange-traded funds

Exchange-traded funds (ETFs) are investment funds that can consist of a single stock or a group of stocks, bonds, cryptocurrencies, or other assets and commodities. ETFs are traded on an exchange and are highly recommended for beginner investors.

The benefit of investing in an ETF is that it gives you diversification into many different asset classes without having to figure out which ones to buy. If you decide to go with a broker, there are a number of great options available for beginners looking for additional guidance. Simply choose a reputable broker and open an account.

Some popular ETFs for beginners include the Vanguard Total Stock Market ETF, the iShares Core S&P 500 ETF, and the iShares Core MSCI World UCITS ETF.

To help illustrate why ETFs are a great way to start investing, consider this example: 19 different ETFs track the S&P 500. The average annual return for the S&P 500 is 10.75%. In contrast, inflation in the United States rises by 3.8% annually. This is a positive asset to own for the long term and a surefire way to grow your money.

3. Stocks worth holding for the long term

Investing in individual stocks is another way to start investing money for the first time as it can provide great returns over the long term. Stocks give you shares of ownership in companies. They are a good way to diversify your portfolio and add a good way to earn high returns. Historically, stocks have outperformed other asset classes when you buy and hold them with a HODL strategy.

Hiring a broker who has experience in the US and global stock markets is a great tool to have when you start investing. Just make sure the broker is regulated by the Financial Conduct Authority (FINRA).

4. Investing through your bank’s investment service

There are many banks across the United States and the world that offer investment services. This is a convenient way to invest when you don’t know how to start investing money for the first time.

✅Pros: Easy access and integration with your existing accounts.
❌Cons: Investment banking fees are usually much higher when compared to some brokers.

Although there are commissions and administrative fees that you have to pay, it may be worth it to you for the services, including the advisory aspect.

Other honorable mentions:

🧾Treasury bonds
📈Mutual funds
🪙Goods

Investing for your future

Fortunately, there are many options available to beginners. The most important aspect is to learn as much as possible about the different types of assets available, their limitations and growth potential, and determine your personal risk tolerance.

Starting to invest for the first time doesn’t have to be scary, it’s an exciting key to helping build your future.

common questions

What are the main goals for starting an investment?

• The main goal should be to build your wealth and gain financial independence.

What time horizon should I consider for my investments?

• Your time horizon depends on your goals. Whether you are investing for the short or long term, try to match your investments to the time frame that is ideal for you.

Is $200 enough to start investing?

• Yes, $200 is a great place to start! You can invest in low-cost ETFs, buy cryptocurrencies and other assets.

Should I invest periodically or all at once?

• Periodic investing, also called dollar-cost averaging, has historically been shown to reduce risk compared to one-time investing.

Is self-directed investing right for me?

• It is suitable if you want control over your investments and are willing to research, learn and manage your portfolio.

How much is $100 per month for 30 years?

• Investing $100 a month for 30 years at an average annual return of 7% would give you about $117,000. This calculation shows the power of compound interest over time. By contrast, if you saved the same amount in cash at home, you would only have $36,000. You can use a compound interest calculator for your investments.