Quick Guide: Investing
Oh investing…I have put this post off for some time now. The reason is because these are the posts that get you into hot water. A lot of people want to know the one stock or one avenue to invest your money to ensure profit. I wont tell you what to invest in, but I will give you real life investing scenarios. When people say investing, don’t think confusing numbers with people smarter than me. Think taking time or money to create more money. It is as simple as that. YOU ARE SMART, YOU GOT THIS!
The two things you can invest are TIME and MONEY
My favorite authors Robert Kiyoskai and Dave Ramsey have two opposing views on how to invest:
Dave Ramsey says take the “safe road” and invest in mutual funds. He says that you can get a mutual fund that gives you a 10% yearly return on your money.
Robert Kiyosaki says the difference between the poor and middle class and the rich, is that the rich make money work for them. He recommends learning how to invest and taking calculated risks, instead of trusting “the experts” with your money.
Quick Math Examples:
You have $20,000 and you put it into a mutual fund getting an average of 10% return yearly. After 1 year you have made $2000.
A stocks price is $10/share. You have $20,000, you buy 2000 shares. The stock price increases over a year to $20/share, now your 2000 shares are worth $40,000. You made $20,000 in a year.
You have $20,000, you get a loan for $80,000, and buy a condo for $100k. Your loan payment is $600/month, your home owner’s association fee is $400/month, and you make $1500/month on rent. Your expenses are $1000, you are bringing in $1500 from rent, so you make $500/month. $500 for 12 months equals $6000. You put in $20,000 and made $6000/year. (This is a real example I just saw 2 weeks ago)
WOAH PHIL! I am just trying to pay off my debt…sheesh let alone invest money. I get it…take a deep breath. 🙂 There are so many different ways to invest, which is the best part.
You can invest in a business or side hustle too. Let’s say you want to be a tutor. You would need to invest in marketing, to get your name out there. Also, you would need to invest in developing yourself into an expert in your field. You may even invest in a website or transportation to get you to and from. There are so many different ways you can invest your time and money to make more money. Just thinking and imagining the possibilities is a great place to start.
The key to investing, no matter what strategy you want to try, is to educate yourself first instead of blindly guessing. Whether you take a class or even read some books, learning from experts is the way to go when you want to replicate what they have done.
4 Resources for you:
1.If you want to learn about investing I highly recommend reading Rich Dad Poor Dad and all of Robert Kiyosaki’s books.
2.If you want to learn about the power of IRA’s and mutual funds, I would recommend reading The Automatic Millionaire.
3.If you want to learn about setting up a blog or website I put together this Step by Step Guide for you to use.
4.If you want to try out stock market investing I have teamed up with STASH investing App to give you $5 to try it out. It is $1/month and I use it because they teach you and they make things simple.
Remember, any money that you put into investing you must be willing to win or learn (lose) :). It is hard for many people to ever be okay with “losing money” for the sake of learning which is why they will trade their time for money. In reality college is “losing money” for the sake of learning, because you can hopefully see the investment paying off in the future. It is the same way with investing.
Random thought looking back:
Instead of paying $120,000 for college, what if I took $120,000 and learned about investing? I would take $10,000 and learn (lose) as much as I could, because once I figured out a formula that worked I would have the other $110,000 to make money.
I do value my college education, this is simply to illustrate another viewpoint of how other individuals view risk, learning, and investing.