The topic of investing is becoming more and more popular, and many people want to start investing immediately, without spending time on preparation. More and more often there are advertisements for courses or manuals that promise to quickly teach investing or trading.
However, for a person far from the financial sector, this topic is quite complex, and it is impossible to grasp it in a couple of days. Here is a gradual immersion plan so that they approach the practice with a structured basic knowledge and understanding of what they are doing.
Motivation (1-2 Weeks)
In any activity, even if we are talking about placing the first bet on casino games Canada or starting an online course, the first thing is motivation. With investments, everything’s the same. If you haven’t already read motivational books about personal finance, start with one or more of the following:
- Rich Dad, Poor Dad.
- Der Weg zur finanziellen Freiheit.
- The Richest Man in Babylon.
Don’t rely on them as textbooks on investing, their main task is to put you in an optimistic mood and show that everything is within your power.
Contextual Immersion and Targeting (1-2 Months)
After familiarizing yourself with motivational books, start reading articles about investing. One or two articles a day will immerse you in the topic without overloading you with information, especially if you study different topics. You can also watch videos or listen to podcasts. The main goal of this stage is to start understanding the basic terms and using them so you don’t get confused further.
The second task is to decide on your investing goals. Reading articles with various examples can also help in this. It is important to answer the questions:
- What financial goals do I have right now and what is their time frame?
- Why do I need to invest?
- What result do I want to get from investing in one year / five years / ten years, and so on?
Everyone will have different answers, the main thing is to answer the questions thoughtfully and honestly. Then you need to fix these goals in order to make a further investment plan based on them. Someone needs to build a portfolio for additional income in retirement, someone first wants to build capital to buy an apartment or a car, or to educate their children, and someone else wants to raise money for a trip around the world. All goals have different amounts, different timeframes, and different degrees of risk.
Training and Practice (4-6 Months)
The next step is training with a consultant who will help you structure all the information you gather and answer your questions. Choose the lecturers carefully, do not run after those who promise a 100% p.a. right after the end of the course. The less promises and more caveats, the more chances that the teacher will be good.
You can read specialized books instead of training. However, the consultant has an advantage: he can answer any question, even if it seems silly and you can’t find an answer to it on the Internet.
After training, you need to start investing. If you haven’t opened a brokerage account before, then during the training or immediately after it is the right time to do so.
Even if you have already made a solid investment plan, try not to rush and start with small amounts. See how your portfolio will respond to security price fluctuations, and estimate how much time you’re willing to spend investing. Examine not only the market, but also yourself in it: in which conditions you are comfortable and in which you are not. No matter how many programs were created for trading on the stock exchange, prices are still changing, not only on the facts, but also on emotions. And it is better if you know when you control your emotions and when they begin to control you, before there is a substantial amount in your portfolio.
When diving into investing, this universal algorithm can be repeated more than once, selecting books and courses that will fit your topic of interest.