investing at its best

How to start investing

Investing is super popular and you don’t need thousands, or millions to start with. People usually think, they need to have a huge deposit to invest, but it’s not true. You can start investing with as little as $50, or even less. Just scroll down to find out how. 

What is investing?

Investing is mostly about working smarter, not harder. If you invest in something, most likely you are being a fox. You have to be smart, careful, fast and aware of your surroundings. 

You all probably know famous investor Warren Buffett. He explained investing as “the process of laying out money now to receive more money in the future”. I couldn’t have agreed more. In addition, it’s also about making priorities for your money. 

growing money tree as an investment

How to invest

There is no 100% success guide that works for everything and everybody. That’s actually also why investing is fun and challenging. However, investing is amazingly challenging and fun, it might help you in other ways as well.

You can strengthen your good habits by monitoring money flow and managing your finances while investing. If you make investing one of your good habits, you might be in a pretty strong financial position later on.

Here are a few ways ho to start investing;

Ways to start investing

  • Cookie jar approach

Investing is super close to saving money. If you want to invest, you need money at first. If you don’t have spare money to invest, then you should start by saving some. You can either create a bank account or start saving at home. Don’t forget that you can start investing with little money as well!

After that, when you obtained an actual amount of money, you can use some online trades websites, for instance You Invest, where you have a possibility to open and fund an account. They will treat you with 100+ commission-free online stock and different amounts of bonuses, depending on how much money you deposit. 

  • Roboadvisors

Roboadvisors were created to make investing easy and accessible. Take advantage of their automated intelligence to track your investments and pay lower fees in the process. 

I recommend two low-budget ones; Betterment and Swell Investing. 

  • 401(k)

Blooom is a great tool for investment management of your 401(k). You will get a free 401(k) analysis, which will tell you where and how they can optimise your investments. The cost of their services is only $10 per month, which is considered very low price for the value you get. 

Investing for beginners

As we already mentioned before, investing is about laying out money today, with expectation of getting more money later. You should be slowly getting more comfortable with a word investing, but there is still a lot to go through. 

If we compare checking account with savings account and investment account, investment account is definitely the best option, when looking in a long term period. 

Lots of people like to invest in real estate, gold or cryptocurrency such as bitcoin. 

If you are looking for a beginners course in investing, I highly recommend Investopedia’s Investing for Beginners Course. 

In case you are looking for a free beginners guide, I highly recommend Investing for Beginners 101.

explanation of how to invest in 2019

Investing mistakes to avoid

We all might have different investing strategies and approaches, but there are some things every investor should avoid. Many people start investing with little or no investing background and they learn by losing lots of money. We can help you avoid those mistakes.

  • Time the market

Because of the high rate of returns, day trading seems super efficient to many investors. Instead of trying to time the market, you should try to slowly add to your portfolio and dollar cost average over time to let your money grow. Growth in general is very important factor in investing. Risking your retirement to try to make extra money is definitely not worth it.

Try to look for mutual funds and exchange-traded funds that corresponds to your goals and try to use them to create an investing strategy, which is going to build your wealth over the time.

  • Failing to Properly Assess Risk

As fast as the market builds your wealth, it can take it all away from you. Instead of focusing on upside potential, you should also focus on downside risk.

Another important step to take is to set your emotions on a side. Long-term investing can be difficult for us as our brain is built for instant gratification.

Risk management is a great way to separate your emotions from the business and stick to your game plan.

  • Diversity

It’s the same as getting your salary. Are you going to spend all your money right after you got them with no money left whatsoever? I don’t think so. Try to diversify your investment portfolio across a few different assets.

The point is if the market collapses in one sector, your portfolio won’t suffer that much.

  • Understanding your investments

Another obvious critical aspect is to actually understand what you are buying. It has lots of benefits for you. In addition, you know what to expect out of stock or fund.

Many times market acts as a group or pack, so if you understand the company, you might realize that some market moves are irrational.

When you understand the company, your confidence increases and you are more likely to success.

When it comes to investing what is the typical relationship between risk and return?

The probability of risk is more than the probability of return.

Risk is the amount of loss that business might have to face, while return is the amount of revenue that business might earn. In many cases, the higher potential risk, the higher return on investment.

That’s why investments are very risky and dangerous if you are not careful enough.

money for investments

Best investment apps in 2019

Investment apps usually offer lower fees and benefit of making trades on the go. Investment apps are usually built for new investors who mostly don’t have that much experience.

You can easily start investing using investment app without any special kind if experience, time or money. 

What are investment apps?

They offer a platform for users to invest their money without the need of a stockbroker or financial advisor. Investment apps are basically bringing stock market trading and financial planning to a digital form. 

Here are 4 investment apps I recommend looking at when trading online. 

Betterment

  • Robo-advisor and financial advice
  • Low fees
  • No experience required
  • Personalized
  • Simple investing

Stash

  • Easy to use
  • Low barrier to entry 
  • Personal financial advisor
  • Start with as little as $5
  • Limited to their portfolios

RobinHood

  • Stock traders
  • Totally free
  • Easy to use 
  • Even easier to sign up
  • Best for investment DIY – ers

M1 Finance

  • Automated investing
  • $100 to open an account
  • User friendly
  • Free
  • Only one trade a day
  • No financial advisor
  • Offers an alternative to robo-advisor formula

What is a stock?

A stock is a share in the ownership of a company. Some even use a term ”investment”. Basically, you purchase stocks in companies you think will go up. If so, the value and stocks increase and then you can sell it for a much higher price. 

It represents a claim of the company’s assets and earnings. Yes it’s true, but we will try to explain it in a better way. 

Stock holders do not own parts of corporations, they own shares issued by corporations. It means that corporate property is separated from the property of shareholders, meaning it limits the liability of both corporation and shareholders. 

Investing in stocks

The most common and most beneficial place for investors to put their money is the stock market. When you buy a stock, you immediately “own” a part of the company. If the company profits, they might pay you a part of their profits in dividends, depending on how many shares of stock you own. If the company grows and profits, your share/s do as well, meaning you can sell them later for a higher price.

Above all, you have to decide, which approach you are going to take. You have two options; you can either say that you are the DIY type and you want to choose stocks and stock funds for yourself, or you want somebody to manage the process for you. In case you are the second type of person, you can use the two websites I already mentioned before; Betterment and Swell.

increase in stocks while investing

What is the stock market?

The stock market is where investors gather to buy and sell investments or shares, commonly known as stocks. It’s hard to track every single stock, therefore, we have indexes such as S&P 500 or Dow Jones Industrial Average. 

How the stock market works?

It’s very similar to auction house, so buyers and sellers can negotiate prices and make trades.

You have probably heard of New York Stock Exchange or the Nasdaq. Companies list shares of their stock on exchange, usually to raise money to grow their business. Investors then buy those shares and sell them among themselves.

Invest in yourself

My personal advice I am giving to everybody, is to invest in yourself. The best investment you can find is yourself. Yes that’s right.

Always progress, learn something new and keep going. Once you “invest” or learn something new, nobody can take it from you. You have the knowledge and you can take advantage of it. It doesn’t apply only with stocks, but also in general. It will help you in both personal and professional way. Every skill, experience or knowledge you have is a core pillar of your success.

Read lots of helpful books, articles and blogs. You will learn plenty of new things you didn’t know before, and also the capacity of your vocabulary will blow up.

Investment loan

You might have a brilliant idea how and what to invest in, but you might not have a sufficient amount of money for it.

That’s where House of Banks comes in handy and helps you solve your problem. We compare best loans on the market, so we can deliver the best offers exactly for your needs.

Check out our offers below. Just click on the button. 

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