The thought of becoming an investor can seem intimidating you have to have the right kind of money, the right kind of experience, and the right kind of connections. But what if you don’t have all those things? That’s where many investors start out just one or two hundred dollars with the hopes of building their business from there. Here are some tips for getting started as an investor when you don’t feel you have all the right credentials yet.
Why do you need to start small
The most successful entrepreneurs don’t rush in, they spend a lot of time doing market research, developing their ideas, and gathering data before they invest. While you should also be aggressive, that doesn’t mean jumping right into a huge investment with little to no information.
If you have an idea for a big project or significant investment, start small. Asking one person for an hour of their time or signing up to speak at a local event is far better than launching an entire business without testing your ideas first. The only way to fail is not to try; make sure you do everything in your power to succeed.
How to think about investing for your future
Your heart may want to jump into speculative plays with big returns, but your brain needs to stay grounded in reality. It’s important to know what you’re doing and not become so consumed by dreams of wealth that you lose sight of personal finances.
In investing, patience is key, you might have to wait several years for a major payoff on your investments, which means it’s vital that you have an emergency fund set aside.
It should be at least three months’ worth of living expenses, and it’s a smart idea to have another six months’ worth set aside in case things go wrong (because they will). Allocate only 10% of your paycheck toward speculative stocks; any more than that is probably unsafe.
Decide on an investment account
Think about what type of investor you’d like to be. Do you have money to put into an investment account or do you want your investments to grow alongside your salary?
If you’re interested in building an investment portfolio, which is most commonly…