Investing in stock can be extremely rewarding both in terms of the practical education you receive about the world of finance and the money that you can make from doing it. But for a younger person who might not yet be completely familiar with how investing works, the idea can seem a bit intimidating.
If you’re thinking of buying stock, here are a few points to consider before you make any purchases.
- Set goals. Do you have certain financial goals you want to accomplish by a certain age? Investing can help you get there. Whether you’re trying to save up money to be set for retirement or just to make some major purchase, set clear, concise, reasonable (that part is important) goals and stick to them. You’ll find that knowing your goals and staying focused on them will keep you responsible with your spending and saving.
- Don’t expect to get rich right away. While there have been success stories of people jumping into an investment at exactly the right time and seeing their share value skyrocket, those situations are few and far between. Especially as a beginner, it’s not a good idea to gamble on an investment you’re not completely sure about. For your first stock purchase, you want might to consider investing in an already established company that continually performs strongly.
- Keep planning. When you’re first starting out, you should first consider how much you’re willing to lose rather than how much you’re hoping to make. You need to think about exactly how much money you’re willing to put into your investment in the short term. Once you’ve made your initial investment, one good idea is to budget a certain amount of money every month to put toward your investment(s) of choice, or to simply put toward your savings.
These are only a few suggestions for beginning investors. As with any major financial decision, you will need to research all of your options carefully before you begin.
Do you invest in stocks? If so, how did you get started?