Think you don’t know enough about investing to get started? Here’s why you’re wrong – 71Bait

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Unless you’ve sat at your grandfather’s knees and learned everything you need to know about investing, you might be feeling a little anxious about getting started. Here’s a secret, though: no one knows everything there is to know about investing (or anything else). It’s a process. You pick up a bit of information at once. And how do you do that? you dive

If you think you don’t know enough about investing to get started, I’m here to tell you you’re wrong. Here’s why:

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You probably think it’s more complex than it is

Investing is a learning process, whether you have money at stake or not. You don’t have to empty your bank account to start investing. You just have to be willing to learn how to do it. Here’s a secret you might not hear anywhere else: It’s not that complex.

Sure, there are investment strategies used by longtime investors that seem convoluted, but basic investing is pretty simple.

The Lemonade Stand

Imagine you are a child. Your friend across the street wants to open a lemonade stand but doesn’t have the money to buy the supplies. They’ve saved up a few weeks of pocket money and are offering to pay for most of the supplies. In return, you get a share of the profit your friend makes from selling soda.

While this illustration breaks down investing to its most basic form, real life investing is not that different. Suppose you want to buy individual stocks. You do some homework, figure out which company is likely to grow, and buy as many stocks as you can afford. If you’re right and that company makes a profit, your stock will be worth more. That means if you sell it, you make a profit.

You may not realize how many learning resources are available

If there’s a belief between you and the beginning that you’ll never understand the process, you’re wrong. You can learn to invest. Here is an example of some of the ways you can invest from the comfort of your own home:

Books

Hundreds (if not thousands) of books are aimed at beginners. Most will walk you through the process step-by-step. Again, it’s because all investors were once beginners.

online courses

There are some pretty great online courses out there for beginners. Even if you don’t know anything about investing, these courses explain the process in a way that makes it start to make sense.

Web pages

Sites like The Motley Fool exist to demystify the investment process. Use them. If you’re ever confused by the terms used, the District of Columbia Retirement Board has an excellent glossary of investment terms. It can be helpful to refer to this when you are introduced to new terms.

stick simulators

A stock simulator is a great way to learn about investing without spending any money. For example, sites like WallStreetSurvivor, ThinkOrSwim, and HowTheMarketWorks offer simulators that allow you to “invest” with fake money. There is no chance of losing anything, but every chance that you will become more confident in how investing works.

A word of caution: When a book, online course, or website suggests you make a particular investment, don’t automatically believe it’s the right thing to do. All you’re trying to do at this point is learn enough to give yourself the confidence you need to get started.

You don’t have to be an expert

Let’s say you invest in your company’s 401(k) or work with a broker to open a Roth IRA. In both cases, professionals manage these accounts. Unless you specifically open a self-managed account, someone on the other end has experience growing (and protecting) your money. Even if you think you don’t know enough about investing to get started, you pay an administration fee to have someone else do the heavy lifting.

Better still, there are brokerage firms that cater to beginners.

Doubt is the enemy

In uncertain times, it’s natural to look for a sure thing. It is normal to develop analysis paralysis. If doubt is stopping you from investing, consider this: When you’re sitting on your money you may feel safe, but due to inflation it will be worth less in 10 or 20 years than it is today.

On the other hand, historically, the stock market has risen more years than it has fallen. A look at the S&P 500 tells the story. In 40 of the last 50 years, the S&P 500 has made money and has produced an average annualized return of 9.4%.

Of course, this is no guarantee of what will happen in the future, but nothing in life comes with a guarantee.

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