Today we’re gonna talk about investing your money in the safest way possible and investment tips for beginners. I know that at these times you might be like why are you talking about investing? We’re struggling to make money but I feel that right now is the best time to learn about investing. Because you will have more time before the next recession, invest money to allocate your funds properly. So you don’t struggle during the next crisis and this is super important. When you make mistakes. When you burn really hard then you have more motivation to proceed and make things better. This happened to me in 2014. I was in another crisis back in Russia. It was a slightly different crisis. People could still travel. Yes, nobody had money to travel but people could still travel. Now it’s a completely different thing. Here are some investment tips for beginners.
- Have an App for Tracking Personal Finance
- Keep Your Money on Saving Account
- Invest in Index Funds
- Invest in Stock and crypto
Have an App for Tracking Personal Finance
The number one thing that I would advise you to do is to have an app where you track all your personal finance. For example, I have a Google spreadsheet where every month I would sit down and calculate how much money I made from every single source of income that I have. How much money I’ve spent and I would also analyze. For example maybe this month I’ve spent too much on shopping or too much on medical bills. Then I would plan my next months accordingly because I don’t want to be over my budget.
There are certain limits for every kind of expense. For example, I think that you cannot pay more than 20% of your income for your rent every month. You would need to set aside around 10 to 20 percent for your retirement. Because, for example, I come from a country where you don’t rely on the government for your retirement. The same is here in the US.
Yes, you will get some retirement money from the government but you won’t be able to sustain your current lifestyle on that money. Yes, you can get that money and go somewhere you know in the middle of nowhere around a small house and live a different lifestyle but many of us would want to retire in style. We want to travel when we enjoy our lives. Right now is the best time to start thinking about it because of compound interest.
You know how it works so this is basically why I’ve started investing because a couple of months ago I read a Tony Robbins book money and it wasn’t like I really didn’t enjoy that book too much. Because at first, he was like you should decide for yourself or who to use and what to do but then he started advertising companies that he’s affiliated with. So I was a little skeptical about that book but what I really liked about it is that it had this graph where it showed the power of compound interest.
So let’s take two people, one person is Tom and the person’s jack. So Tom invested 575 pounds this year and Jack is gonna invest the same amount of money but in ten years. They’re gonna put it into stocks or an index fund that grows five to seven percent a year and guess what’s gonna happen in 40 years for Tom and 30 years for Jack. Tom is gonna make eleven thousand dollars out of those fifteen hundred something. Jack is gonna make six thousand eight hundred only this is the power of compound interest. So the earlier you start the better.
Keep Your Money on Saving Account
It’s one of the safest investment tips for beginners. I wouldn’t even call it an investment but a savings account. I haven’t done that for a while because I thought well the interest rates are not that high but if you hold your money in cash like that at home or your own checking accounts it is almost the same because they don’t work for you.
You just lose money and lose its value to inflation because every year they would lose like 1% -2% depending on how high the inflation is or maybe it’s different where you are but it is really really important that you keep your money in savings accounts. Moreover, there are a lot of deals going on right now. For example, I started a savings account with Capital One. They give you $100 for every 10,000 you put on their savings account, $500 maximum.
La bank gives you a maximum bonus of $250 when you start a savings account with Marcus by Goldman Sachs gives you one point seven percent of the capital of 11.5%. Li Bank has one point five percent but Capital One. Ally Bank has those additional bonuses. It is still a lot better than just having money sitting in your checking accounts.
Also, it’s really smart to have money worth six to nine months of your living expenses in accounts that you can easily access. I would call them liquid assets and a savings account is one of them because you can quickly withdraw your money and not lose the interest rate that you’ve accrued. It’s also good to have an app or a website where you track everything that’s going on with your accounts.
I have personal capital for example and I can see how much I’m spending and how much I’m making my investments. It’s an important one from the list of investment tips for beginners. You can use mint or you use any other app just to visually represent what’s going on with your financial situation.
Invest in Index Funds
Investment tips for beginners: Now let’s talk about actual investing. I personally invest in index funds with Vanguard and my index fund is called Beatty Sachs. Basically, what they’ve done in Vanguard is they took a lot of different stocks. Like stocks of the companies who are in media or in technology are in construction oil. They’ve created this pool of stocks that basically mimics the market because it’s so diversified. So if the market grows five to seven percent then this index fund would grow pretty much the same. The thing here is that my culture of investing is to invest a small amount of money every single month. Because I don’t want to track the market all the time. Yes, we all know that we’re in the recession right now, probably a good time to buy but when I buy people would text me, no no it’s too early to wait. I don’t care. Like my strategy is just buying every single month and by the way last month I messed up $3,000. Now I have $3,200 in my account. So I made some money but I’m not getting over-excited about it because I know that very soon the markets are gonna go down again. I’m gonna lose those 200 but over time over the period of three or four years. It’s just gonna grow which is amazing. So this is my strategy for investing a small amount of money every single month and this way I can beat the fluctuations that are happening in the market. You can totally find other index funds. I just decided that I’m gonna use Vanguard.
Invest in Stock
Investment tips for beginners: Last but not least I’ve also invested in stocks but I haven’t invested a lot. I just started playing with that market because my friend said well let’s buy some stock formula. One stock because he’s a race driver and he says formulas had to stop their season. They’re losing a lot of money. So firmly stocks are going down. The belly of companies going down is a good time to buy. So I got some formula one stock. I got some General Electric starts. I got some other company stocks but the thing with Blaine’s talks is that you’d really need to track the market. For example, Tesla was growing really fast for some period of time and then lost a lot of its value. So you just need to stay active in the market and obviously anticipate these things coming. What I suggest is to just buy and hold it for the long term. You should think about which companies you should invest in, for example, Apple.
You know they have been amazing but I don’t really want to invest in them right now because they haven’t done anything really outstanding in the past few years compared to what they’ve done before. We don’t really wait for the new iPhone that much. There are no lines making great products but I don’t think they’re actually changing the world around us. They used to but I think not right now you can disagree with me. It’s just my opinion of Amazon on the other hand. I believe that it’s gonna grow but again right now I’m a little skeptical because I’ve been using Amazon over the past two weeks. It’s been a pretty weird experience when they tell you that they’re gonna deliver in two hours but in fact, they deliver in two weeks. So with stock investing you really need to be interested in what’s going on in the market.
So you can try and invest as much as 50 dollars and see what’s gonna happen just you know get into this culture of investing. I’m impressed that a lot of people here in San Francisco are really into investing. A lot of them have either a Robin Hood app which has been crashing in the past few weeks. A lot of them have Weebly and a lot of them make their investments because they don’t want to rely on you know the government when they retire. So I highly highly recommend you to do your own research and at least start a couple of savings accounts this week or buy a couple of stocks because once you get into it. You will be more interested in the topic and this means a more secure future for you.
Related: How to Start a successful online business: Online business ideas
I can’t buy real estate right now having a lot of cash but if I did I would totally look into the real estate market in the next few months. I really hope that was useful. I know this is a new topic in my opinion. So I would really appreciate it if you would take a minute and comment down below whether that’s interesting for you and ask me additional questions and share your opinion on investing. We have this community of people. Here who wants to learn how to invest because if we do. I would really love to share my investing journey with you. I would really love to document it because right now I only have 5k invested in stocks and index funds but maybe in a year this situation changes and I really want to document the whole journey.