Investing for beginners - where to start, types of investments. How to start investing from scratch? Investments from scratch for dummies What is the best thing to invest money in now?
Hello! Today we’ll talk about investing for beginners, because... More and more people are interested in how to increase their income.
Today you will learn:
- What rules exist in the investment market;
- How to minimize risks;
- What useful advice do experienced investors give to beginners?
What is investing
Investment - This is a way to generate income with minimal expenditure of labor resources.
This form of passive income does not involve physical labor, allowing you to increase your finances at any time. Well-known economists characterize investing as an investment in one’s own prosperous future, which can free one from material problems in the future.
For most people, investing is associated with a complex process, million-dollar turnover, in which only large corporations participate.
The most common myths are:
- Investment is available only to wealthy entrepreneurs. Any person can become an investor and there is no minimum contribution threshold. Even an amount of 1000 rubles invested in the purchase of foreign currency can bring good interest over time.
- The investor must have special education and experience in business. This type of activity rather requires prudence, the ability to think logically and an understanding of economic processes. If you don’t want to delve into the structure of financial pyramids or fluctuations in quotes, you can limit yourself to bank deposits and long-term deposits with minimal risk.
- All transactions are very risky. In fact, investing has many options, each of which is subject to risk. But any enterprise or is also not insured against ruin, fires or man-made disasters that can cause losses to the owner.
Investing is an interesting way to earn money that has no restrictions. Start with small amounts and slowly move towards your goal.
Types of investments
For work, economists use the classification of capital investments according to several criteria.
It depends:
- From the chosen form of ownership: private or public. The division denotes who provided funds for projects or contributions.
- From object: real, financial and speculative. The first involves the purchase of property rights, real estate, patents. Speculative ones are based on changes in asset prices (fluctuations in currency quotes, the cost of precious metals). Financial means operating with precious metals, shares or currencies.
- Depending on the duration of the investment: short-term (no more than a year), medium-term (no more than 5 years), long-term (more than 5 years).
- From the investment goal: direct (commercial or residential real estate), (in the construction of production or raw materials), non-financial (intellectual projects, scientific developments).
- By risk level: conservative, moderate and aggressive.
Novice investors often have a question: how to distinguish ordinary investments from financial speculation, because they have many common features. Most economists divide them by investment period: if it is less than one year, then we are talking about speculation.
Financial investments
For a beginning private investor, financial investments are of greatest interest. They are always aimed at obtaining material income. The objects for transactions are various types of securities, shares and shares in projects. This includes the purchase of shares and debt securities, trade loans and bills.
Profit can be made in two common ways:
- Payment of interest due is stable and regular;
- Income from the sale of a security at an increased price.
A novice investor must decide for himself what types of financial investments he will work with. Some people prefer long-term investments and constant stable income in a small amount. Those who like quick returns choose riskier transactions with stocks and bonds.
Dictionary of the beginning investor
You should start working with investments by studying the basic terms and concepts that are actively used by specialists in their work.
The most common are:
- Assets– everything that can bring profit to the investor: company shares, various real estate, precious metals.
- Dividends- a certain part of the net income of a commercial company, which is distributed among its shareholders. The concept does not refer to profits received in investment projects.
- Quotation– the price or fixed rate of the asset or financial instrument for which the transaction is planned.
- Trader– a person who is engaged in active trading in the financial market, handling investors’ money.
- Exchange– market for various financial assets (currency, gold or shares). This is a legal entity that acts as a kind of intermediary between investors, sellers and buyers and sellers of financial assets.
- Liquidity– the term refers to the ability of a certain asset to be quickly sold on the market if necessary.
- Kitchen– an investment company that does not conduct transactions on the real market, playing against its own clients.
- Aggressive investors– players who are ready to take any risk for the sake of high profits.
- Trustee– during the term of the transaction, manages assets for an agreed percentage, but the funds remain with the owner.
- Deposit- a certain amount that is deposited in a bank depository for safekeeping and can generate income in the form of interest.
In addition to general terms, a novice investor should know narrower names:
- Hype projects– specially designed investment programs that can bring great income. The vast majority of investors classify them as risky financial pyramids.
- Ponzi pyramid– a structure in which investors make a profit by attracting new participants. She worked actively in the early 90s, attracting people by receiving large profits in a short period of time (the infamous MMM or Khoper-Invest).
- PAMM account– a special trading account that has a module for managing the percentage distribution of finances between all participants. Its main function is to manage the total capital of several investors and the manager himself. The latter receives a fixed percentage of the income, and the final amount of profit is automatically distributed among all investors.
- Capital PAMM—accounts– the total amount of all investments accumulated in an open account.
- Manager's offer– a specially executed agreement with the investor, which stipulates the percentage (or amount) of the income received, the rules for the distribution of profits and other important provisions.
- Investment funds– specialized companies that are engaged in attracting financial investments with their further placement on PAMM accounts, participation in exchange transactions and other projects.
This is only a minimal set of terms that will be expanded as you work with investments. Additional study of online courses, which are increasingly being conducted by various traders, training centers and investment companies, will be a good help.
Many wealthy entrepreneurs started with small investments of personal savings.
In autobiographies and useful articles, they willingly share with beginners useful recommendations that can be used at the initial stage:
- Learning the basics of investing. To work in this field, it is not necessary to have an economic education or experience working on the stock exchange. But knowledge of basic terms and methods is necessary to understand the processes, will help you independently study market news and speak with brokers in the same language. To gain knowledge, you can regularly participate in seminars, read articles by famous investors and managers, and read books on similar topics.
- We set a specific goal. After learning the important basics of investing, you need to set a goal: how much income should you earn? Reaching this threshold stimulates and encourages action. It’s better to break down a big global goal (earn a million dollars) into several realistic stages.
- Choosing a working style. There is an aggressive and conservative way to invest. Conservatives are more thrifty and try to invest in low-risk assets. “Aggressors” are not afraid to take risks in order to make big profits. Further tactics of work and assessment of investment risks also depend on the method.
- Determining the financial limit. You should start investing by counting your own available funds. You should not invest large sums borrowed on credit at first. It is better to start with small investments that you can part with without much loss. It is necessary to allocate a certain minimum amount to start, the loss of which will not be global for a novice investor.
- Looking for a broker. This is an important step that should be taken carefully. A good financial professional has many references and clients. The final result directly depends on his mobility and ingenuity.
- We assess the degree of risk. Any investment transaction will have a risk percentage. The choice of strategy is directly related to the investor’s ultimate goals: if he wants quick profit to buy a holiday package, he will have to pay attention to transactions with a high degree of risk. If the goal is to collect additional income for retirement, you can limit yourself to working with verified financial assets (long-term bank deposits).
- Choosing a field for activity. At the initial stage, it is better to separate your finances and try working with different types of investments, purchasing currency, shares and deposits. After summing up the first results and making a profit, it will be easier for a novice investor to decide on the direction of work.
- Diversifying investments. This is the basic rule of any investor, which is to use several instruments at the same time. For example, a good option would be to open long-term deposits, buy precious metals and participate in mutual funds, which will give profit at different times and provide the investor with a stable income.
- We review our portfolio more often. When working with several types of financial projects at once, it is necessary to constantly monitor price levels and stock market news. Some securities go down or up in value quickly, so a beginner must keep an eye on the balance of his holdings.
A novice investor should remember and actively use these operating rules in all areas: real estate and bank deposits, the foreign exchange market and mutual funds.
Basic investing methods for beginners
By analyzing the work of experienced investors, their level of income and preferences, it is possible to create a kind of rating of accessible and simple types of investment for beginners.
Bank deposits
This financial instrument is considered the most reliable and accessible, because bank branches are available even in small towns and cities. Positive features include insurance of deposits up to 1.4 million rubles, which almost 100% guarantees a return on the money invested. This is the answer to the question: where to invest without risk? The presence of special programs and online accounts for users makes it easier for investors to track rates and the emergence of new profitable offers.
One of the negative aspects is the low interest rate on deposits, which will not bring super-profits. more suitable for long-term investments for the future, which will provide a good increase in pension or help raise money for the purchase of real estate for the family.
Securities in any form
This type of investment requires advanced economics skills. Shares, bonds or bills of exchange are suitable securities. The choice must be reasonable and practical, based on market trends and analytical data. Alternatively, you can entrust your investments to professional market players.
There is no maximum profit from securities, but this type of investment does not provide a 100% guarantee of its receipt. There are many cases when the shares of a little-known company after a few years brought income tens of times greater than the initial investment.
Purchase of real estate
– a popular option among investors of all levels. Housing is always in demand and can be sold on the secondary market. The main difficulty is the dependence of prices on the state of the economy in the region or country.
In the case of real estate, an investor can receive income in two ways:
- Active (its implementation);
- Passive (renting).
Among professionals, there are entire schemes for working with real estate that provide good profits.
For this purpose, apartments and houses are purchased:
- At the stage of laying the foundation and before the sale of the entire residential complex, when the price is lowest;
- At the moment of maximum decline in prices on the real estate market due to economic or political circumstances;
- In uninhabited condition, they carry out repairs at minimal cost and sell them at a high premium.
In recent years, the following type has been gaining popularity: an investor purchases an apartment on the ground floor of a building, converts it into non-residential premises and rents it out for an office, store or pharmacy to third parties. This is a very profitable event, because monthly rent is 3-4 times higher than payments for a residential apartment.
Investments in the Forex market
This name is often found by active users on the Internet. Forex is an international financial market where currencies are exchanged at free prices. It is open and accessible to beginning and experienced investors and individuals. There are special training programs that introduce you to the rules of working in the market free of charge. If you don’t want to understand the intricacies of currency transactions, you can resort to the services of trusted traders.
Precious metals
Buying products and bars made of precious metals can be called the oldest type of investment on the planet. In addition to gold, platinum, silver and palladium can bring good income. Over the last decade alone, the market value of gold has increased 6 times.
Expensive metals are not subject to deformation and corrosion, and are in stable demand even during an economic crisis. In any situation, they are easy to implement and get money.
In addition to buying scrap and jewelry, there are several other ways to invest:
- Acquisition of shares or interest in a gold mining company;
- Purchasing quality bullion;
- Opening ;
- Opening a special “gold” deposit in a bank.
The last option brings profit the fastest and has minimal risk. Interest on such a deposit can be received in any currency, as with a regular deposit.
Mutual funds
The essence of the activity of a mutual fund (UIF) is the management of assets that are provided by investors on the basis of an agreement. The fund's experts invest them in profitable commercial projects, enterprise securities, receiving interest from the trust management of the money. Relations between the parties are regulated by a special agreement.
The positive side of investing in mutual funds:
- Professionalism of employees who are experienced investors;
- Availability to any individual;
- State control over mutual funds;
- No income taxation.
Participation in mutual funds brings on average 20–30% profit, which significantly exceeds the rates on deposits of well-known banks.
Promising startups
Quite a risky way of investing for beginners. Only every 4-5 projects give a good profit, and you need to have a certain entrepreneurial flair to determine it.
You can find a project for investment on special websites, or by offering your services as an investor to enterprising friends. The choice of direction is not limited by the type of project or its geography: modern technologies do not require the presence of an investor in the team, so you can invest in domestic or foreign startups.
If you make a comparative analysis of all the listed options for a novice investor, it will look more clearly in the table:
№ | Investment method | Timeframe for asset placement |
Advantages of the method |
Bank deposits | At least a year |
Low risk percentage on deposits |
|
Any securities | No clear restrictions |
Profit has no limit |
|
Buying a property | More than 3 years |
Good liquidity of the asset, the possibility of passive income |
|
Forex market | No restrictions or deadlines |
Quick return on investment and small starting capital |
|
Precious metals | More than 5 years |
Constantly increasing prices, high liquidity |
|
Mutual funds | Minimum 3 months |
Does not require knowledge or skills, the opportunity to earn a decent income |
|
Promising startups | For at least six months |
Large selection of interesting and promising projects |
A novice investor should not actively engage in unfamiliar types of investments. It is better to give money to the most studied market instrument or resort to the services of experienced traders or investment funds. Diversification across several options will increase your chances of getting a high income and reduce the risk of losses.
How to avoid investment risks?
Making a profit from an investment almost always comes with risk. The higher the expected income from a transaction or deposit, the higher it is.
There are no absolutely safe financial instruments, and even a stable bank can go bankrupt in an economic crisis.
Therefore, the task of a novice investor is to learn to minimize his risks.
Experts in the field of investing give some useful tips that will help a beginner avoid failures and get his first income:
- It is necessary to invest amounts that are not intended for the needs of the family (paying for food or housing). It is better to manage “free” finances, the loss of which will not lead to a decrease in the usual standard of living;
- Remember the rule of diversification: do not invest all available funds in one project, but distribute them among several different options;
- Withdraw money and income received from the project at the first opportunity, promptly review the status of all investments;
- Seek help from professionals, select traders based on reviews and recommendations;
- Do not give in to emotions and the inner voice that will push you to make rash, impulsive decisions in the hope of making a quick profit. Each contribution must be considered from all sides.
Like any type of business, investing has pitfalls and secrets that are gradually revealed. The path to success runs through a series of failures and profitable transactions, and the experience gained helps to better navigate future work.
Common mistakes of a novice investor
The main misconception is the need to have a large starting amount for the initial work. Many investors started out by investing small personal savings that returned with income. Any financier will confirm that it is better to put them into circulation than to store them in anticipation of a “rainy day.”
A novice investor can quickly lose money if he makes the following mistakes:
- Do not engage in self-development and neglect learning the basics of investing. The completeness of information and the ability to analyze it are of great importance; it will help reduce risky transactions to a minimum;
- Fear of complete collapse. Investing will always be accompanied by the risk of losing part of your capital. A reasonable approach and constant study of trends will help develop professional instincts and quickly navigate exchange rate fluctuations;
- Expect big income. Many investors prefer steel trades with a return of 10-15%, which have minimal risk. This helps to increase capital gradually, without losing or becoming disappointed in the chosen activity;
- Use credits and loans. Losing these amounts will result in a large loss and the need to pay additional interest from your own money;
- Trust ratings blindly. A novice investor must constantly consider information that helps to choose the optimal project. But the rating should be supported by personal knowledge, analyzes of the latest exchange or market news;
- Be lazy. Those wishing to receive greater profits from investing should remember that this type of business is for active people. You can attend trainings on , spend more time motivating and communicating with dynamic entrepreneurs, and start learning foreign languages.
Investing is a serious and interesting activity that can turn passive savings into stable income. Perhaps this exciting process will appeal to novice investors who will want to make it their main and favorite job.
The question of how to manage accumulated money excites the minds of many people. How can you make the most of your little money? And what method of investing is the safest for a person inexperienced in financial intricacies?
Here we will look at several working investment tools for investors of any level. Let's start with a simple one - a bank deposit, and end with securities. Let's start!
Opening a deposit account
The most common and traditional way to help save a small amount over the last hundred years can be called bank deposits. Indeed, opening a deposit is publicly available, you can start with 1000 rubles, and opening a deposit does not require any special financial knowledge.
Here are some useful materials on deposits:
However, there are several nuances that should not be neglected:
- It is more profitable to open a deposit for a period of at least 3 months
- A higher income can be obtained if you do not withdraw accrued interest, but provide a deposit with the possibility .
- Opening an account online through the bank's website often increases the interest rate by 0.5% - 1%.
- To open a deposit, it is better to choose a bank that provides minimal penalties for early withdrawal of money from a time deposit.
Let's calculate, based on the average interest rate, how much income you can get if you deposit small amounts of money, for example, 5,000 rubles.
- 1st year: 5000 + 5000 x 10% = 5500 rubles;
- 2nd year: 5500 + 5500 x 10% = 6050 rubles;
- 3rd year: 6050 + 6050 x 10% = 6655 rubles;
- 4th year: 6655 + 6655 x 10% = 7320 rubles;
- 5th year: 7320 + 7320 x 10% = 8052 rubles.
Of course, at this rate, without replenishing the account, it is possible to double the deposit amount in 7 years. But the unpredictability of the domestic economy cannot guarantee that over such a long period of time events will not occur that will devalue the little money invested.
Therefore, our task is to consider more effective types of investments that can bring significant income already in the second year of their use.
What is a mutual fund and how beneficial is it for an ordinary shareholder?
Financial analysts consider it quite optimistic (mutual funds). The cost of “entry” to the fund can vary from tens to hundreds of thousands of rubles.
For example, the minimum cost of a share is 15,000 rubles, shares are sold for 30 thousand rubles. However, even very small amounts of money can be successfully placed in a mutual fund by purchasing not a whole share, but a fraction of it.
The undeniable advantage of investing in mutual funds is their complete transparency and state control. The financial activities of mutual funds are strictly regulated by law. Therefore, you should not be afraid of fraudulent schemes when investing in mutual funds.
If you don’t know what a mutual fund is, we highly recommend watching the video:
The only problem that an investor faces is the choice of a management company that will effectively invest the shareholders’ finances in profitable securities. To do this, you need to carefully study the ratings of mutual funds, which are published quarterly in the media or seek the help of a financial consultant.
Where to begin? Here are some useful materials:
The end of 2014 is significant for mutual funds in that they began to actively invest money in shares of foreign companies. Since the investment attractiveness of Russian sites is quite limited, market expansion will bring clear benefits to shareholders.
Raiffeisen Capital Management Company, which demonstrated a year-end return of its Raiffeisen USA Mutual Fund of 31.54%, has added shares to its portfolio with shares of the USA, China, and Europe.
Considering that the securities include the most popular blue chips, we should expect high returns at the end of 2013.
The risk of losing financial investments in mutual funds is purely theoretical. Due to the fact that the invested money is distributed among different objects, the chance that all enterprises will go bankrupt at once is zero.
PAMM – high risks!
PAMM investing is in many ways similar to placing funds in mutual funds; money is also transferred into trust for the account manager. Only this all happens in the virtual space, with the help of the Internet and the Forex exchange.
Today, many financial experts consider opening PAMM accounts to be one of the highest priority types of investment.
The advantage of this investment is that a small investor can initially invest a small amount to “taste” the possibility of making money on the international currency exchange.
The initial investment in a PAMM account can start from $100. By transferring money in trust to an experienced trader, the investor is freed from vigilant control over fluctuations in currency prices.
And since the trader’s remuneration directly depends on the income received, it makes sense for him to earn as much as possible.
Again, even if in one trading period the session is not very successful, it may overlap the next day. The average profitability of PAMM accounts, judging by statistics, is never less than 10-15% per month.
For an inexperienced stock market player, investing in Alpari is the best option. More or less stable company. Competitor Forex-Trend turned out to be a financial pyramid
Let's consider what effect can be obtained based on the results of the month if you place a small amount of $1000. Having divided the money among 20 traders, we have $50 in twenty PAMM accounts. If we take into account that it is possible that not all accounts will have equally profitable trading, then at the end of the month you will have to calculate the average profitability.
The average monthly return is 11.21%, and at the end of last year the profit was 177%. Thus, minus the commission that will have to be paid to the PAMM account manager, the net profit from the thousand invested will be just under $100.
You can withdraw your profit after the end of the first trading week. But capitalization of profits will be more profitable for the investor, i.e. adding it to the principal amount of the account.
Passive income: gold, securities, currency
It is impossible not to call investing in precious metals one of the solutions to the question “where to invest little money”. Purchasing gold, platinum or silver is possible either in physical form (bullions) or by opening a metal account.
Undoubtedly, precious metals have not fallen in price for many decades. However, there is no significant increase in prices on the gold market.
Therefore, investing in precious metals should be planned for a fairly long period and it is better to not limit yourself to one metal when opening a metal account: “split” the amount into gold and another metal.
The topic of investing in precious metals is the most interesting for us. Here are some useful materials
Don’t think that working with investments is only for those who have an impressive amount of money on hand. Absolutely every person should be able to manage their savings correctly. Whatever your savings are, it is better to put them to work than just keep them at home. This way they will bring you real income and will not be eaten up by inflation.
The main danger for every novice investor is a lack of information. You cannot start working with securities without knowing the basic principles of the functioning of the market and the rules of behavior on it.
Theory and practice are equally important: you need to understand the structure of the market and see how it responds to certain events in order to predict possible changes and respond quickly to them.
If you want to learn how to trade on the stock exchange yourself, you should take a training course on the Investments 101 portal. The theoretical blocks here are illustrated with practical tasks on carrying out foreign exchange transactions, and professional traders and analysts of the BCS company act as experts.
Now we’ll talk about what you should never do. So, here is a list of common mistakes made by those who are just starting to work with investments.
1. Lack of investment goal
If you don't know why you want to invest, think twice about whether it's worth it at all. It is the goal that determines the investment horizon (the period during which you plan to invest money), the strategy and methods for achieving the desired result.
The choice of behavior depends on what you want to do: increase your existing capital in order to make a large purchase, save for children’s education, or create a savings fund for a comfortable life in retirement.
There are two main goals of investing: saving capital and increasing it. In the first case, you save your money from inflation, in the second, you also earn money. Of course, you can not limit yourself to one goal and work on several tasks at the same time. In this case, it is necessary to create and control the appropriate number of investment portfolios, each of which will have its own strategy.
2. Choosing the wrong strategy
To put it simply, an investment strategy is a road that will take you where you want to go. You choose: to follow the obviously safe and longer path, or to take a direct shortcut, but face certain obstacles. Are you ready to take a risk and allow a temporary drawdown of capital, but make good money in the future, or do you prefer a small but guaranteed income? Your investment goal will help answer this question. How much time do you allocate to achieve it - more or less than three years? This period is the boundary between short-term and long-term investments, and the choice of the approximate duration of work in the market largely determines the nature of your actions.
If you expect to achieve what you want in one or two years, you should not invest in assets that are not profitable now, in the hope that someday they will increase in value.
A test to determine your risk profile will be a good help; you can take it by registering on the Investments 101 portal. As a result, you will receive not only a description of the required behavior in the market, but also an indicative investment portfolio - a combination of instruments indicating potential profitability.
3. Preference for one type of investment
Advice about not keeping all your eggs in one basket is given by absolutely everyone who has experience working with securities. This is especially important for novice investors who have not yet learned to choose with absolute accuracy the only asset where it is worth investing all their money. Remember, the more components your investment portfolio has, the lower the risk of failure. Even if you prefer one particular instrument - stocks, for example - divide your investments equally between different companies and industries. This way you will protect yourself from unnecessary worries and in the event of unforeseen situations, you will not allow fear to take precedence over sober calculations.
4. Fear of being left with nothing
Always remember that investing is not a casino. When we talk about risk here, we don't mean losing every last penny of your money.
You can control the risk in investing yourself, as well as decide when it’s time to stop.
You set for yourself a level of securities drawdown that will not cause you to panic and thereby not disrupt the course of your investment strategy. This is especially important in the case of long-term placement of funds, when at some point the shares noticeably lose in price, but later win back the fall. To avoid making a mistake in your choice, carefully study the history of the company whose securities you want to purchase. Don't invest in areas you don't understand. If in a familiar situation you are ready to make approximate forecasts, then a new industry may have completely different laws of development. Do what you are confident in and don’t worry in vain.
5. Focus on majority opinion
Market trends sometimes change literally in the blink of an eye. You need to follow them, but following them is not at all necessary. If everyone is buying securities of one company en masse, think carefully about whether you need it. Their price is growing by leaps and bounds, but at any moment it can stop and go down, so the benefit from such an acquisition is very doubtful. You shouldn’t hastily dump depreciating assets either: in the future the situation may even out, but you will remain a loser. Of course, if a company in which you own shares is rapidly going down and is about to go bankrupt, it is better to get rid of its shares, but in general you should not copy the behavior of the crowd. Emotions are not an investor's best assistant. Just remember that the difference between buying and selling should always be in your favor.
We all save money. A schoolchild saves for a new smartphone, a student for a car, a young family for an apartment (or more often for a down payment for a mortgage), a worker for a vacation, and a pensioner for a funeral. And no matter how tense the economic situation is, money somehow accumulates. Otherwise, why are there so many iPhones and expensive cars around?
But what most people don't realize is that when you have accumulated money under your pillow, it quietly diminishes. Every night the “savings killer” comes and steals a small part of our savings. And this killer's name is Inflation.
The official inflation rate in Russia for 2015 is almost 13%. But we know that it is quite underestimated (those who remember the prices for products in 2014 understand this especially well). The real inflation rate for 2015 was definitely more than 20%.
Thus, all our savings depreciate at a rate of at least 20% per year or 1.65% per month. So, now most investment methods help not to increase your funds, but to at least slightly compensate for inflation.
In such a situation, it is very unwise to keep money under your pillow. Any spare money should be put to work. But how to invest them as reliably and profitably as possible?
Investing is not that difficult.
I think everyone has an idea of what investing is. When investing, you put your money to work. That is, you invest money expecting to receive even more money in the future.
But we must not forget that investing entails risks. Instead of the expected profit, you may receive a loss or even lose all your money.
Therefore, the main rule of investing is risk diversification. According to this rule, you should split your savings into parts and invest them in different investment projects.
For example, let your investment portfolio be 100,000 rubles. Then you need to choose several investment instruments that are suitable for you. Let's assume you have chosen mutual funds, PAMM accounts and backing and HYIP projects. Now you will need to distribute your portfolio between instruments depending on how much risk you are willing to take.
Let’s say that you are committed to moderate risks and distribute your money like this: mutual funds – 40%, PAMM accounts – 40%, backing – 10% and HYIP projects – 10%. Now you need to apply the principle of diversification within each investment method you choose.
That is, you will need to select several different PAMM accounts and distribute your 40% of the portfolio between them. The same must be done with other chosen investment methods.
In order to comply with this rule, you need to use several tools that can multiply your money. I have selected 12 of the best ones for you.
Let's compare the 12 best ways to invest.
I have not only selected the 12 best investment methods for you, but also compared them with each other. For comparison, I selected several parameters, which I decided to evaluate using a 10-point system, where 1 is the lowest score and 10 is the highest.
Comparison of the best investment methods.
The following options were selected:
- Simplicity. This parameter characterizes how easy it is to understand this method of investing, understand the principle, find a suitable company and make a contribution.
- Profitability. Here the average return on investment will be assessed. Most often, this and the following points are interconnected: the higher the profitability, the higher the risks.
- Reliability. This parameter characterizes the riskiness of the analyzed investment instrument.
- Entry threshold. Shows the minimum amount you can invest.
- Liquidity. Estimates how quickly you can withdraw your deposit, and what losses await you if you withdraw money prematurely.
- Passivity/activity– this parameter shows how passive this type of income is. That is, 10 points means “put it in and forget it,” and 1 point means that in order to get maximum profit you will have to spend additional effort and time.
Of course, all my assessments will be subjective and I think that many readers will not agree with them.
1. Bank deposit.
A bank deposit is the most understandable and simple way of investing for an ordinary person. Even any grandmother understands how everything works. After all, even in the Soviet Union, in which there was no investment, people kept money in savings books. And one of the heroes of a popular Soviet film urged fellow citizens to keep money in savings banks.
All you need to do to make a deposit is to choose a bank and come there with your passport and money. What could be simpler? I bet 10 points.
At the same time, the profitability of a bank deposit is not high. At the moment, deposit rates range from 7% to 12.5%. I think this is one of the lowest returns of all investment methods. Deserves 1 point.
But you can be sure of the reliability of your deposit. Deposits are insured by the state. Even if you plan to invest a large amount, then in order to insure against the fact that your bank’s license will be taken away, you can break the amount into small parts and invest in several banks. In this case, even if the bank is deprived of its license, and your deposit was less than 600,000 rubles, you will be compensated for both the deposit and interest. 10 points for reliability.
You can start investing with an amount of 10,000 rubles. This is not much at all, so you can put it beyond the entry threshold 8 points.
In most cases, you can withdraw money from your deposit at any time. But if you withdraw money early, you will lose most of your profits. 7 points for liquidity.
This type of deposit falls into the “put it in and forget it” category. All you have to do at the end of the investment period is go to the bank and withdraw your money. Well, or extend the deposit. 10 points.
Pros:
- High reliability.
- Availability.
- Low taxes. You will have to pay 35% of taxable income, which is calculated using the formula: all income minus the refinancing rate.
- Predictability of results.
Minuses:
- Low profitability.
Conclusion. This type of investment serves not to increase your money, but to at least somehow compensate for inflation. In any case, if you do not want to take risks at all, then this method is better than just keeping money under your pillow.
2. Mutual investment funds (UIFs).
For an ordinary person, investing in mutual funds does not seem like a very clear idea. To understand this, try explaining to your grandmother at the entrance that you are buying shares in a fund of a management company that invests money in assets.
You also need to take the choice of mutual funds seriously, studying the statistics of different funds. After this, you need to go to the office of the company or its agent. I'll give it for simplicity 6 points.
The profitability here depends on the type of funds and on the approach to choosing a mutual fund. The riskier the investment the fund makes, the higher the potential return is expected, but in most cases it is not high. 3 points.
Reliability also greatly depends on the type of fund. While bond mutual funds are one of the least risky investments, investments in venture funds carry very high risks. On average, I would rate reliability at 7 points, because at least you won’t be able to lose a large part of your deposit, as in other investment methods.
The minimum cost of a share starts from 300-500 rubles per share, which is suitable for almost everyone. 10 points.
I think most people invest money in open mutual funds, so at this point we will only talk about them. You can withdraw money from open funds by selling your shares in 1-3 business days. I'll put it 10 points.
Still, with this method of investing, you will have to spend a little time managing your investments. Of course, the management company will manage the fund without your participation, but you will have to transfer money between mutual funds and decide when to sell shares and when to buy. 8 points.
Pros and cons of this investment method:
Pros:
- A large number of assets in which the fund can invest.
- Low entry threshold.
- Relatively low risks.
Minuses:
- Possibility of incurring a loss if the fund choice is unsuccessful.
- Relatively complex investment procedure.
- An investor should be interested in the stock market.
Conclusion. With successful selection of funds and proper management of your investments, the profit from the deposit covers inflation and brings in a small income. But we must remember that many funds bring losses to their investors.
3. PAMM accounts.
Brokerage companies have invested so much money in advertising in recent years that only the deaf have not heard about Forex and the tempting prospects of becoming a successful trader. Therefore, it is not difficult for an ordinary person to understand the principle of PAMM investing - give money to a trader so that he can play with it on the stock exchange.
You can find a suitable broker on the Internet. At the moment the most popular is Alpari. So I'll put it 7 points for simplicity and clarity.
Some accounts can bring you more than 100% profit per year, while others can drain all your money. But, when using the principle of risk diversification, the income from this type of investment is slightly higher than in mutual funds and is estimated by me at 5 points.
As returns increase, risks also increase. When using the principle of diversification, you will not lose the entire investment amount, but you may receive a loss. For reliability I would put 6 points.
You can start investing in PAMM accounts with an amount of $10. At the moment this equals 700 - 800 rubles. The amount is small, so I bet 10 points.
You can withdraw money at any time within one or two business days. Therefore, for liquidity 10 points.
You will have to spend time managing investments. If you do not use automatic tools, you will have to log into your personal account almost every day. After all, the market situation can change very quickly and your managers can make critical mistakes. I bet 6 points.
Pros and cons of this investment method:
Pros:
- Low entry threshold.
- Opportunity to create your own investment portfolio.
- Simple investment procedure.
Minuses:
- It is possible not only to receive a loss, but also to lose the entire deposit amount.
- An investor should be interested in trading on the foreign exchange market.
Conclusion. This is a very common method of investing, which has gained popularity due to advertising. This method of investing money is more suitable for those people who like the foreign exchange market or who have experience trading on the stock exchange.
4. HYIP projects.
This type of investment is often called quasi-investment. In simple terms, these are pyramids that accrue profits to participants from new deposits.
Investing in these projects is very easy. Many of them accept bank transfers and payments through the most popular payment systems. Most often, HYIPs have a legend that explains to gullible investors where the company gets the money to pay such high interest rates.
It is very easy to contribute to such a project via the Internet. But if you are new to the Internet, it will be more difficult. For convenience I would put 8 points.
HYIP projects promise cosmic profits. On average, long-term HYIPs offer to pay 20-30% per month. Short-term ones can promise to double the deposit amount in just a few days. 10 points for the promised profitability, but in fact it is, of course, lower.
There is no need to talk about any reliability of deposits. The project can collapse at any moment. Every day 1-2 HYIP projects are opened and the same number are scammed. Therefore, for reliability I would give everything 1 point.
I think at this point and the points below we should consider only long-term projects. The minimum entry amount starts from 1,500 thousand rubles. 9 points for a low entry threshold.
In most projects, the deposit cannot be returned. It will be returned to the investor throughout the investment period with each payment. Therefore only 1 point.
If you have already invested money in one of the HYIPs, then all you can do is sit and hope that the project will exist and pay. There is nothing you can do anymore. Completely passive investments deserve 10 points.
Pros and cons of this investment method:
Pros:
- High profitability.
- Convenient deposit and withdrawal of money.
Minuses:
- Very high risks.
Conclusion. Make money onHYIP projects can only be carried out by those who are “in the know.” You need to be able to analyze projects and find those that can generate income. Most people who make money on HYIPs compensate for the loss when investing by attracting referrals.
5. Backing (investing in poker players).
Almost everyone knows about a game like poker. At the same time, many people understand that successful players receive big money for winning tournaments. But how many people know that most poker players do not play with their own money in major tournaments?
That is, if a strong player does not have enough money to participate in a tournament, he turns to an investor (sponsor), who receives a percentage of the prize money if he wins. A player may also have several sponsors who invest in the player and receive a profit from the winnings depending on the amount of investment.
You can buy a share from a player only by agreeing on this on specialized forums. For example, on the forum of this site: PokerStrategy.com. To purchase, you will need to personally contact the player. For convenience I would put 4 points.
The reliability of this type of investment highly depends on the choice of players. In addition, when purchasing a share, you do not sign any contracts and the player may “not want” to give you your share for winnings. 3 points for reliability.
You can buy a share from $10. But only novice players sell so cheaply; to buy a professional’s share you will need to invest 200-300 dollars. But it’s still better to start with small investments, so I bet 10 points for a low entry threshold.
There is no such thing as withdrawing money. You pay a share, and if a player gets into the prizes, you take the profit.
After you have made a deposit, all you have to do is wait for a positive outcome. You can no longer influence anything. 10 points.
Pros and cons of this investment method:
Pros:
- The possibility of making a big profit if the player wins the tournament.
Minuses:
- More suitable for people who understand poker.
- The deal is based only on a verbal agreement with the player.
- Typically, players earn more than sponsors.
Conclusion. Rather, backing is suitable for people who are well versed in poker. The average person will have a hard time choosing the “right” player.
6. Trust management in sports betting.
Most people view sports betting as gambling. But professional privateers earn a lot and consistently from betting on sporting events.
Many privateers create their own PAMM accounts, into which they actively attract investors. This type of investment is similar to PAMM accounts in the foreign exchange market.
In order to make a contribution, you need to register on the BetPamm.com trust management platform and select several accounts for investment. 7 points for simplicity.
If you look at the profitability charts, you will see that top privateers increase the funds in their accounts by thousands of percent. Such income should be captivating. But on average, the returns from this investment method are much lower and deserve 6 points.
If you use the principle of diversification and invest in several PAMM accounts, then at least you will not lose the entire investment amount due to privateer’s mistakes. For reliability I would put 6 points.
You can start investing with very small amounts. For a low entry threshold 10 points.
You can withdraw money quickly and easily. 10 points.
After investing, you will need to monitor the selected PAMM accounts in order to transfer money between accounts in case they go into a loss or achieve maximum profitability. 6 points.
Pros and cons of this investment method:
Pros:
- Short-term investment.
- Independent portfolio development.
- Low entry threshold and the ability to use a demo account.
Minuses:
- Possibility of receiving a loss or losing the entire amount.
Conclusion. This investment method is very similar to investing in PAMM accounts in the Forex market. But it is not so famous due to the lack of advertising.
7. Startups (venture investments).
In recent years, stories of successful startups have been heard from everywhere. Everyone understands how profitable it would be to buy shares of young companies that in a few years would turn into large billion-dollar corporations.
The first way to invest in a startup is to enter into an investment agreement with the company directly. Some companies actively attract investors on their own by selling them future shares at reduced prices. An example of such a startup is Unitsky’s SkyWay.
You can also invest in a startup using crowdinvesting platforms and startup exchanges. Exchanges do not inspire confidence in me, since I consider them hype (read my review of ShareInStock). But many reputable sources call them real companies. When you go to the exchange, you will see audited and verified companies in which you can buy shares. All you have to do is choose a suitable startup and buy a share in it. For simplicity 7 points.
For purchasing shares on the stock exchange, the company will pay you dividends in the amount of 2% to 7% per month. In addition, an investor can sell his shares if the company develops and its shares increase in price. He can also sell shares if they lose value and he realizes that he has invested in a shell company. For profitability 6 points.
You need to understand that startups are a risky type of investment. According to statistics, 70% of them are unprofitable, and 20% of these 70% are simply scammers who embezzle investors' money. But even of those companies that are among the 30% of successful ones, half break up in the near future due to internal problems.
One of the ways to invest in startups is crowdinvesting platforms. Unfortunately, in Russia they are not very developed and the minimum amount of investment through them is quite high. But all companies represented on the site are subject to mandatory verification. There is also the opportunity to invest directly in startups. For reliability 6 points.
The barrier to entry into this type of investment is not high. 10 points.
If you decide to withdraw money or redistribute it within the share exchange by selling all or part of the purchased shares, then you will need to sell them on the exchange at a price below the market price. The lower the price you set, the faster your shares will be bought. 7 points.
To make the most profitable investment, you will have to devote your time. It will be necessary to track changes in the value of shares on the stock exchange, selling and buying them. There is no manager here, so you have to do everything yourself. 5 points.
Pros and cons of this investment method:
Pros:
- Convenient and simple investment procedure.
- Very low entry barrier.
- High potential profitability.
Minuses:
- High risks with passive investing.
Conclusion. If you decide to invest in startups, then it is better to use exchanges. You will pay about 5% for withdrawing money, but you will be protected from scammers.
8. Currencies and precious metals.
Surely, among your friends and acquaintances there is a person who, with a smart face, claims that money should be kept in gold (platinum, dollar, pound, yen, etc.). This approach says that the person does not understand investing, but simply uses popular “stereotypes”.
For example, if you look at the dynamics of gold prices, you will see that since 2012 it has depreciated against the dollar by almost one and a half times.
If you decide to do without the services of managers and buy precious metals or currency yourself to store money in, then this procedure will not be difficult.
You can buy currency at bank branches, or using the services of brokers (which will be more profitable than buying through a bank). You can also change currencies using online and offline exchange offices or payment systems.
Precious metals can also be bought in banks. And it became possible to purchase gold using the WebMoney payment system.
Also, do not forget about cryptocurrencies, for example, Bitcoin, which, according to all forecasts, will rise in price in the long term. Buying these assets will not be difficult, so I bet 8 points.
Buying precious metals or currencies for long-term investment primarily protects you from depreciation of the national currency. For many countries with weak currencies, this is a smart decision. But rates behave unpredictably, so there may not be any profitability. 2 points.
A beginner does not know which direction the exchange rate will go in the near future, so his investment is more like gambling. Even if people now prefer to keep money in dollars, what is the guarantee that oil will not rise in price in the near future along with the ruble?
You can probably protect yourself from the depreciation of the national currency by storing half of your money, for example, in dollars, and the other half in rubles. This way, if rates fluctuate, you won’t lose anything, but you won’t earn anything either.
Profitability depends on luck and I would bet everything 2 points.
The entry threshold depends on the type of asset and the method of purchase. On the exchange, 1 lot will cost at least $1,000, and through exchange offices or payment systems you can exchange amounts of several dollars. So anyone can buy currency or precious metals. 10 points.
You can sell currency as quickly as you can buy it. In exchange offices and stock exchanges this is done almost instantly. Gold is also a highly liquid asset. 10 points.
In general, trying to influence profits by tracking rates and then selling assets turns you into a trader. And I wouldn’t classify trading as investing. Therefore, I understand investing in currencies and precious metals as “invest and forget.” That's why 10 points.
Pros and cons of this investment method:
Pros:
- Can protect against depreciation of the national currency.
Minuses:
Conclusion. Buying precious metals and currencies is a very unpredictable way to invest money for a beginner. You can reduce risks and increase profitability either by entrusting money to a manager, or by independently studying trading in the foreign exchange market.
9. Securities.
I think most securities people are only familiar with stocks. The most financially literate will probably be able to name bonds. Only a few people know how to invest money in securities.
In fact, buying securities is no more difficult than buying currency. You also need to contact a large bank or broker. 7 points for simplicity.
When a beginner buys securities, making a profit is a big question. And, if even a beginner can count on a small income when investing in bonds, then the stock market can bring a loss to a novice investor. 3 points for profitability.
In fact, usually low returns entail low risks, but not in this case. The risks are high in the stock market. 3 points for reliability.
You can start investing with a small amount. The entry threshold starts from approximately 1,000 rubles. 9 points.
Securities can be sold on the stock exchange in the same way you bought them. This asset is considered quite liquid. I bet 10 points.
Again, if a person begins to manage his securities on his own, then he already turns from an investor into a trader. Therefore, here we consider only passive investing. 10 points.
Pros and cons of this investment method:
Pros:
- A simple investment procedure and a low entry threshold.
Minuses:
- For a beginner, this is a risky and low-yield way of investing money.
Conclusion. If you have already decided to invest in securities, then it is better to contact a professional manager who will manage your funds for a small commission. As a newbie, investing in the stock market on your own is more like gambling than investing.
10. Real estate.
There is one stereotype among people: “ The safest investment is buying real estate" But do not forget that real estate includes not only apartments, but also various buildings, structures, water bodies, forests, etc.
In general, there is some truth in this, because many people want to save up for an extra apartment in their old age in order to rent it out and get a good increase in their pension. And if something happens, you can sell it and get good capital.
You can invest in residential or commercial real estate, under construction or already built, suburban or located within the city. The ease of investing also depends on the type of property you choose.
To invest in residential real estate, you will need to contact a realtor, look for suitable options, fill out a lot of documents and, possibly, make repairs. As for me, the procedure is quite dreary.
If you decide to buy commercial real estate, then the hassle becomes much greater. You will need to do accounting, pay taxes, manage facilities, and re-register energy supplies. On average I would give it for convenience 2 points.
As for profitability, from residential real estate you can receive no more than 1 percent per month for long-term rent. This is 7-10% per year. Renting residential properties on a daily basis turns into work and is not considered.
If you expect to sell it at a higher price after some time, then it is far from certain that prices will rise. In general, for profitability I would bet 3 points.
Real estate is indeed highly reliable. Unless, of course, this is a facility under construction.
Even if real estate prices fall, you will continue to receive a stable rental income. For reliability I put 9 points.
The entry threshold is high, even if it is a collective purchase of real estate. The minimum investment amount starts from several hundred thousand rubles. I'll put it 2 points.
It often happens that in order to sell real estate (especially commercial real estate) faster, you have to set a very low price. Sometimes properties cannot be sold for several months. I bet 3 points.
If we consider long-term rental of residential real estate, then we will not have to spend much time on management. You will need to find tenants once and then withdraw money once a month. 8 points.
Pros and cons of this investment method:
Pros:
- A clear scheme for generating income.
Of course, here we will not talk about investing in creating a business from scratch, but about buying an existing company. Creating a business from scratch is hard work with unpredictable results. An investor is interested in an established business with streamlined processes that generates a stable income.
To find a company to buy, you can use newspapers or bulletin boards. But most often, the entrepreneur does not talk about the sale of his brainchild, so as not to raise doubts among employees and clients.
Therefore, they prefer to contact brokerage companies that will sell their business. They also distribute information about the sale among friends and acquaintances.
Once you have found a suitable business, you will need to audit it to ensure that business processes are in order. This whole procedure can turn into an insurmountable obstacle for a beginner. 1 point for simplicity and clarity.
Extremely profitable businesses are rarely sold, so you should count on average profitability. Of course, profitability greatly depends on the type of activity and quality of management. I'll put it 6 points.
Many people think that entrepreneurs only sell unprofitable businesses. But actually it is not. The reason for the sale may be: an urgent need for money, disagreements between owners, loss of interest, lack of time (especially if one entrepreneur has several types of business), etc.
The audit will help analyze the reliability, profitability and prospects of the business. Therefore, the chance of buying a loss-making asset is very small. I bet 7 points.
The barrier to entry into this type of investment is relatively high. Yes, there are very small companies, but they don’t cost a penny. Buying a profitable business with streamlined processes is similar in cost to buying real estate.
People often join together in groups to buy a business. For example, several friends and acquaintances buy a company together. But even in this case, the entry threshold remains high. I'll put it 2 points.
If you urgently need money, the company can be sold. If your business is unprofitable, then selling it will be difficult or almost impossible. It is easier to sell a profitable business, but most often this procedure takes a lot of time. That's why 3 points.
If you begin to independently manage the purchased company, you will turn from an investor into a businessman. Therefore, you will need to hire an executive director to manage your business. But even in this case, you will have to control it and analyze the company’s activities.
And you will need to select a manager yourself. That's why 2 points.
Pros and cons of this investment method:
This method of investing is similar to investing in a business, but with a simpler purchasing and management process. Again, there is no need to create and promote a website. You can simply buy a ready-made project.
The website itself is more of a tool than an asset. The real asset is the audience that comes to this project every day. The site owner makes profit through advertising, affiliate programs and other sources of monetization.
To purchase a site, you can use the exchange. One of the most popular exchanges in RuNet is Telderi.ru. In the list of sites for sale, you can see all the information on the projects: audience size, profitability, development dynamics, payback period, etc.
The transaction is protected and takes place according to the rules of the auction, where the site goes to the buyer who offers the highest price. For simplicity we can put 4 points.
Typically, normal websites are sold at a price equal to the income from it for 12 months. That is, if a project brings in 20,000 rubles per month, then the fair price for it will be 240,000 rubles.
But in most cases, on such sites, monetization does not work 100%. Thus, after “tweaking” monetization, it will be possible to recoup the investment in 6-10 months. 7 points for profitability.
If the site is made with high quality and was promoted only by “white” methods, then such a contribution can be called reliable. Of course, if you want the project to bring you profit for many more years, then you need to do at least minimal work on it. But the project will be enough for a year or two without additional investments. 8 points for reliability.
In general, some sites are sold very cheaply. You can find it for 500 rubles. But such sites should not be of interest to investors.
You can buy one expensive and high-quality site, or several average ones. Therefore, I do not recommend starting with too small amounts. I'll put it at the entrance threshold 6 points.
If the project ceases to be of interest to you or you need money, you can always sell it on the same exchange. I bet for this 4 points.
When you buy a site that will bring you passive income, you can make a profit without working on it at all for a year or two. But, over time, without administration and updates, the project will lose its audience, bringing less and less income. I'll put it 4 points.
Pros and cons of this investment method:
Pros:
- A convenient investment amount for everyone.
- High reliability of investments.
- You can develop the project, increasing profits.
Minuses:
- You need to have minimal knowledge about websites and how to monetize them, or seek help from an experienced specialist.
Conclusion. Investing in content, information and other similar sites is one of the best ways to invest. This type of investment can easily be turned into a business by working on purchased sites and increasing profits.
Which method do you like best?
Investment is a great way to create a source of additional passive income. Many people are interested in ways to invest money, and various websites offer thousands of articles on this topic. Unfortunately, you can’t just invest money in the first project you come across and immediately become a good investor. Like any other activity, investing has its own rules, laws, and in order to skillfully apply them in practice - experience needed. In this article, you will learn what you need to do to learn how to invest from scratch or become a more professional investor.
By the way, ah Do you need investments at all?? Of course, they generate income, but many people do without bank deposits, stocks, bonds and live comfortably on their salaries. After all, it’s no secret that investing is risky; you can not only make money, but also lose it! Well, I answered this question in sufficient detail in the article “ and why do you need them“, where you will find four convincing arguments why your savings should make a profit.
Have you changed your mind? Well, let's figure out how a beginner can learn to invest from scratch and what needs to be done for this. The content of the article:
Preparation and motivation
So, you want to learn how to invest wisely, where to start learning? The first thing you should remember: there's no need to rush. There is no need to rush headlong into investing money in the hope of making money as quickly as possible - this always ends badly. Banks and financial markets are here to stay and will accept your deposit at any time.
By the way, in parallel with immersion in investing it is worth... This is the only way to manage your finances as efficiently as possible.
To get a good start, it is important to prepare properly. First, you need to start saving money from your salary, preferably at least 20%. This habit is important not only because it allows you to save money for investing, it also helps put your finances into enrichment mode, because:
Rich is not the one who has a large income, but the one who income exceeds expenses.
To invest with a clear conscience, you must have extra funds outside your monthly budget. Otherwise, sooner or later it will become difficult to allocate money for investment and the process will stall.
It's also worth thinking carefully about your motivation. Investment training for beginners is a long process and in some places quite complicated, so you must clearly see the purpose for which you will be doing it. It is important to understand why you really need investments.
For example, my motivation to invest is the creation of funds that will allow me to solve any issues I need: buying an apartment, a car, educating children in the future, and so on. These are long-term goals, if you look closer to today, then I am investing to show blog readers how realistic this is in practice. I want people around me to think about investing and improve their financial situation - this goal inspires me to dive further into the topic.
To become an investor, it is not enough just to know the rules of investing money wisely. It is also important that you learn think correctly, see the world like an investor. This is not so difficult to do, because there are very good ones that give the novice investor the right thoughts and ideas - the basis of the investor’s thinking. In addition, such books provide useful knowledge about proper management of personal finances and financial literacy.
The first book I would recommend is The richest man in Babylon. This is definitely an excellent read for a novice investor: using the examples of stories from the life of the richest city of the Ancient World, you can learn the basic laws by which money works. Including the basic principles of investing.
The second book on the “must read” list is Rich dad, poor dad. The author tells a lot of interesting things about finance, business and education, although not everything can be applied in our realities. Another thing is important - few books motivate you to study investing so much! This is exactly what a beginner needs, I highly recommend it.
Good materials can also be found on Youtube. I recommend you one good video that talks about investments and financial management in general in simple language:
How to learn to invest for a beginner - theory
The theory of investing is not as complicated as it may seem. The basic principles can be explained in an hour, but there is no higher mathematics involved in the calculations. On the blog I posted more than 10 articles on basic investment issues. Naturally, it is advisable to read everything, but it’s worth starting with these:
The titles of the articles speak for themselves. Diversification- this is the basic principle of reliable investment of money, which is followed by absolutely all investors from you and me to Warren Buffett. It allows you to reduce investment risks, which are not something mythical and scary - they are well calculated in advance.
The diversification rule requires the creation portfolio— a set of investment instruments into which all the investor’s money is distributed. One of the stages of portfolio formation is determining investment strategy, which covers the entire process of investing money: from your global goal to the smallest details.
- and why does an investor need it?
In the future, you will constantly encounter these concepts and it is better to immediately understand what they mean. Profitability is a measure of your earnings from investments, and drawdown- a measure of your possible losses. I recommend paying special attention to compound interest- with long-term investment (several years or more) they work real miracles. And you will find specific examples of these miracles in different financial markets in the article about reinvestment.
To begin with, this will be enough, but still try to study all the materials in the section . More knowledge = more understanding of how investments work.
Learning to invest from scratch in practice
Theory is good, but money is earned only through practical means. There are many ways to invest money, but you can achieve stable results only by becoming an expert in one or more of them. You shouldn't take on everything at once, especially if you don't have a lot of free time to learn how to invest.
I also follow this rule and have focused my attention on investment opportunities on . This area seems very interesting to me for many reasons:
- easy access— the minimum deposit varies from $10 to $50;
- profitability potential— 30% per annum in dollars is real;
- variety of instruments— you can trade yourself or completely trust the professionals;
- uniqueness— these are not standard deposits or shares, this is a specific area and it is interesting both to me and to readers.
Investment training courses for beginners
And yet, the most convenient and fastest way to learn investing is to take a training course. They will guide you by the hand from the basics to the nuances of each investment instrument, teach you how to choose the right investment options and how to act correctly in a variety of situations. At least if the training course is good, otherwise there are all kinds - now everyone who is not too lazy becomes a teacher.
I hardly took any investing courses because I didn’t come across any good ones. Only one course in my memory stands out qualitatively - . This is a general course, where you will learn not only about investing in Forex, but also about much more. What's included in the program:
![](https://i2.wp.com/webinvestor.pro/wp-content/uploads/2019/04/kursy-po-investirovaniju.gif)
![](https://i2.wp.com/webinvestor.pro/wp-content/uploads/2019/04/kursy-po-investirovaniju.gif)
As you can see, all the most important issues are covered - how to create a portfolio and control risks, how to put your finances in order, how to protect your deposits, as well as training in investing from scratch for beginners in a large number of instruments.
I hope this article gave you an understanding of how to learn to invest from scratch as a beginner. After learning about investing in theory and after a lot of practice, you will feel confident in your actions and become an expert in your chosen area of investment. After this, you can already engage in serious investments with an understanding of the matter. Learning to manage your finances and make them generate additional income is a good achievement that will help you a lot in life.
I wish you success in investing! If you still have or have new questions about any of the sections of the article - ask them in the comments.
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