A Beginner’s Guide to Stock Market Investing
So I want this article to serve as a basic guide for any beginner out there that is considering to invest into the stock market. Now I’ve currently got over $100,000 invested into various different investment portfolios, some private, some public, some of them I tend to share on this channel. I’m going to put a couple different portfolios of mine on the screen right now and this article that I’m making is one that I wish I had when I first got started because it would have allowed me to understand how the stock market worked, it would have allowed me to understand how I could invest into it as a beginner and ultimately it would have helped me save a lot of time, energy and money.
Understanding the Stock Market
So just make sure that you stick around for this entire video from start to finish because you’re definitely going to learn something that’s going to change your financial future. All right so jumping straight into one of the first steps and one of the first things that you need to do which is that you need to understand exactly what the stock market is. Most of you out there want to make money with the stock market but you don’t have a firm understanding of what it is and how it works and just to give you a basic definition of exactly what it is, a stock market is a market in which shares of publicly held companies are issued and traded and many countries all around the world have their own stock markets with their own publicly traded companies.
Global Stock Exchanges
For example with the United States their stock market is called the New York Stock Exchange as well as the NASDAQ, Canada their stock market is called the Toronto Stock Exchange TSX, the United Kingdom’s one is called the London Stock Exchange LSE, China also has their one as well called the Shanghai Stock Exchange the SSE and of course these are just a few different countries all around the world that have their own stock exchanges where you’re going to be able to buy and sell publicly traded companies from within that country but I’m going to explain a little bit later on as to how you can actually invest into particular companies and the best way to do it but before I get into that the question that I want to answer is why should you even consider investing into the stock market.
Why Invest in the Stock Market
Now an interesting fact is that many wealthy people all around the world invest into a few different places of course they invest into things like real estate they also invest into bonds and things like that but one of the main ways that wealthy millionaires billionaires all around the world invest their money is into the stock market and even though yes investing your money into real estate is something that you should aspire to do it does come with certain boundaries that’s not really easy for a beginner to overcome e.g. you need a big deposit in some cases and you also need to have certain credit scores so on and so forth however when it comes to investing into the stock market you can get started with as little as $100 so when it comes to thinking how a wealthy person thinks then investing into the stock market is something that you should consider doing and just generally speaking it’s just a great way for you to grow your money over time because as you can see from this investment calculator over here let’s say that you only invest around $100 initially and then a further $100 every month with an average rate of return of around 10% every year your money is going to grow to $41,000 in 15 years time.
and you’re probably thinking that this isn’t that much but as you can see over here the amount that you would have invested within that time would have only been $18,000 but as long as you’ve made sure to invest it in the right way the amount of profit that you would have made on top of that $188,000 is $23,000 so instead of just having your money sit in a basic bank account doing nothing you can see the power right here when it comes to putting your money to work and if we just change these numbers slightly let’s say if you’re someone that wants to get started with the stock market by putting in a initial deposit of $5,000 and let’s say you’re looking to invest around $500 every month just like that within 15 years you would have close to a quarter of a million dollar and the numbers get even more crazier depending on how much more you’re looking to put into it so let’s say you’re looking to invest $10,000 initially and then $1,000 every month the amount that you’re going to have on average in 15 years time is going to be close to half a million dollar so just from this alone you can see the power of investing the reason why you should do it and how beneficial it can be when it comes to Growing your money over time which now brings me on to the two different options that you have when it comes to investing into the stock market so the first option is to buy into individual stocks and the second option is to buy into an index fund now when it comes to buying into individual stocks this is pretty straightforward if I wanted to buy shares in Apple, McDonald’s, PayPal, Microsoft I’ve got the option to do that and that would be individual stock market investing however on the other hand when it comes to Index Fund investing the way that this works is that there’s various different index funds out there which is essentially a group of different companies the most popular Index Fund is maybe the S&P 500 which is made up of the top 500 companies in the United States so if I bought into the S&P 500 I’m going to own a small portion of shares for all of those different companies that’s in the S&P 500 now you need to know that there’s various different pros and cons that goes into these two different methods so let’s start off with one of the main Pros that I’ve learned over my time of stock market investing when it comes to buying individual stocks which is that there is a potential to make more money in comparison to Index Fund investing
so right now if I put let’s say $10,000 into Apple and it went completely to the Moon I’m going to make more money than what I would have made than if I put $10,000 into an index fund as I already said you’re going to be splitting your $10,000 amongst so many different companies some of them may do well some of them may not do well but the potential for you to make a lot more money when it comes to individual Stock Investing is a lot higher but in saying that the main con to individual Stock Investing is that it does require more work to monitor the performance so the main reason why I don’t like individual stock market investing is that you are going to have to monitor the financials of whatever company that you’re going to buy into this is because things can change overnight the balance sheet the earning reports you know all of these different financial statements can completely change overnight which means that your money is more at risk when you do buy into an individual company so if you’re someone that does have a lot of time and you want to read through all of these different statements every quarter or whatever it is then that’s definitely something that you can do but if you’re someone that’s looking for something that’s a little bit more passive then index fund investing might be a better option for you because as you can see over here the main Pro that I’ve already written down is that it’s a great way for you to make a passive income at this present moment in time Index Fund investing is the main way that I invest I like it because I don’t have to put a lot of time into it I don’t have to think about a lot of stuff literally all I do is set up the automations when it comes to moving the money from my bank account into my portfolios and everything else is taken care for me I don’t have to think about things I don’t have to monitor the performance because that’s exactly the job of the index fund that you’re buying into but as I already touched on the main con to Index Fund investing is that there is a smaller return on your investment it’s not completely small it’s just going to be smaller in comparison to if you put your money into an individual company so I’d say that those are just a couple different pros and cons that you need to be aware of when it comes to index funds but if you wanted me to make a more detailed article on this topic breaking down everything that you need to be aware of then put in the comments down below do the index fund video and I’ll get onto it ASAP but this now brings me on to the next part of this entire video which is what are the best apps for you to use as a beginner when it comes to investing into the stock market now this question is going to be somewhat difficult for me to answer because it all depends on what country you live in it depends on so many different factors for example here in the UK I would say that the main apps that will be perfect for a beginner is going to be something like Trading 212 or even Invest Engine these are the ones that I personally use myself but if you’re based in America maybe Canada Australia then another app that would be perfect for you to use is maybe Moomoo and the only reason why I’m recommending these apps is because they’re regulated in those particular countries the biggest mistake that you want to avoid when it comes to investing your money using any app is to use an unregulated one because if that app goes bankrupt if something happens then there’s a potential for you to lose your money in addition to these apps being regulated they’re also great when it comes to setting up various different automations so that you don’t have to sit there buying into whatever stock whatever index fund that you want to buy into I’m going to put overlay on the screen right now as I’m talking when it comes to showing how easy it can be to use any of these different apps that I’ve mentioned for you to buy into an index fund or into an individual company and the fact that you can have it as an app on your phone just makes it a lot easier as well and just like with anything else that I’ve spoken about in this video so far there is a lot more that goes into setting up the app you know registering making sure that you set things up accurately and I personally use called the dollar cost averaging strategy and this might sound a little bit confusing but it’s actually quite simple all this means is you’re going to invest into whatever Index Fund whatever company that you’ve decided to invest into on a regular basis so whether it’s going up you’re going to consistently invest a certain amount into it whether it’s going down you’re going to consistently invest that same amount you know making sure that you’re being consistent with it over a period of time that’s what I do anyway with all of the different index funds that I’m building up all of the different portfolios that I’m grow I like to invest into them on a consistent basis whether the Market’s up whether the Market’s down because as long as I’m making sure to invest into my portfolios every couple times a week or so I’m going to be able to benefit from the appreciation and the dividends far into the future so the dollar cost averaging method is definitely a strategy that I would advise any beginner out there to use just make sure that you’re happy with the amount that you’re putting in it’s not money that you need you know even if it’s as little as $100 every week every couple weeks or so with that consistency and that long-term mindset that’s where you’re going to be able to see the real benefits of stock market investing and this now brings me on to the final thing that I want to touch on in this article which is probably the most important thing which is that when it comes to stock market investing that’s just one part of Building Wealth right that’s a great way to earn a passive income but at the same time you need that income for you to invest into the stock market in the first place and that’s why I’m a big believer in starting online businesses businesses where you’re going to be able to Target the entire world you’re going to be able to earn an income 24/7 365 days out of the year and the more money that you make from your online business the more money you have available to invest into the stock market so that’s the final that I want to leave you with which is the importance of making sure that you’ve got the active income coming in as well you don’t want to just try and make passive income it’s about building up cash flow for you to now double that cash flow from Investments now if you want to get a little bit more information on one of my favorite online businesses and how you can get started I’ve got a completely free course it’s going to be the top.
