One of the biggest lies about investing is you need a lot of money to start. Like thousands or millions but that is not true. You just need to start. These days, investing has become simpler and something you can do from the comfort of your home. You can literally be in bed and buy a stock. You just need to start and be consistent with it.
Putting in small amounts regularly over time actually matters more than putting in one big amount once. Over time, your money starts to grow, and that growth starts to grow too. That’s how people build wealth.
“Time in the market is better than timing the market”
So how do you actually start? Great news is you already are on the first step. Getting knowledge and information on it. To succeed in the stock market like anything new and every untouched territory, you need to understand the landscape before going into it. Not understanding it before you start investing is the fastest way to lose money and get discouraged.
Knowledge in this sense is not just limited to knowing about the stock market generally but also knowing about the company whose stock you want to buy. Before buying a stock, understand what the company does, how they get their money and who their competitors are. Never buy a stock you do not understand.
Okay, now we have the knowledge bit out of the way, what next? Step two is diving straight in. Find out which app has the lowest commissions and fees and create an account there. Since you’ve done your research on the company’s stock you want to buy, this step is relatively straightforward. Download the app, register, buy the stock. Just like that, you have begun your stock market journey. See how uncomplicated that was? But beware, investing is not a get rich quick scheme. You have to be patient and play the waiting game.
This leads us to another misconception about investing. That you invest today and in a week you get double the money invested. It is simply not true. Prices go up and down and you won’t always see immediate returns. Understand that the goal is not to get rich quick, it is to build something big overtime.
Now the question on your mind is “how would my money grow?” There’s this thing called compound interest Compound interest means your money grows, and then that growth itself starts to grow. So instead of taking your profit out, you reinvest it, and over time, your returns begin to earn returns too. For instance, you invest €20 and that grows to €26. If you take that €6 profit and reinvest it, it could grow to €9. Now you have €29 when you started with €20. That is simply compound interest and it is one way for your money to grow. It is like a snowball effect.
Quick Myth Buster
Let’s bust some investment myths real quick.
| Myth | Reality |
| I need €1000 to start investing | You can start with €1 |
| I can get rich next week with investing | Investing is a long term “snowball” |
| Investing is for “finance bros” | Investing is for everyone |
Wrapping Up Now
I hope with this I have been able to show you bestie that investing is really not complicated and is something you can do.
You don’t need to be rich to start investing, you don’t need to have everything figured out either and you don’t need any “finance bro” to understand it. You just need to start and stay consistent. That is the key.
On a final note, find a financial advisor or someone who creates financial education related content, listen, watch and learn. Take your time, learn as you go and don’t be afraid to start small.
My final gift to you would be to point you in the right direction so start with this financial educator, Vee.
That’s it for our series on understanding the stock market bestie, now go make your money work for you.
