There are various ways to improve your investing and money management. Young Finances has 9 tips to get you started.
1) Read this blog
If you want to be a great investor but you don’t know where to start then you should start with Young Finances! Start with the post about how a college student can invest to learn the basics.
2) Be consistent
There are really great tools that allows you to invest as little as you like in a stock. The key is to repeat this schedule on a weekly, biweekly or monthly basis. There are some very successful money managers that don’t bother with timing the market and instead invest at a preset time. The consistency will keep your portfolio growing. You can also make automatic transfers into a managed stock trading account. Allowing someone else to invest for you in set intervals will build a steady portfolio.
3) Surround your self with other investors
It’s important to ‘talk shop’ as often as you can and preferably with someone who knows more than you. That way you can benefit from their knowledge. Try to find a community of like minded investors. You can do so for free through Facebook or even Meetup.com.
4) Focus on one asset class or industry
Smart investors focus. By becoming an expert in your chosen field you will know how the news will affect your specific asset class or industry. Some investors focus on a specific set of stocks, others choose to invest passively. Whatever you choose, become an expert at what you do. It will help you eliminate the risk of loss.
5) Test your strategies
Before you throw any money in the ring you should test out your thoughts with a demo account. It’s a great way to get a feel for the process. For stocks, Yahoo Finance has a practice account. If you are interested in futures and options then OptionsXpress is a good place to start. They also offer a nice demo account along with great learning tools and customer support.
6) Save 10% of your income
This habit will help you grow your assets easily. Every great investor needs a good flow of cash to make their investment decisions. No cash, no assets. Check out the Young Finances Toolkit for help with budgeting and saving.
7) Don’t Follow the Crowd
Just because a “talking head” says buy! buy! buy! doesn’t mean you should go right out and load up on the latest recommendation. Sometimes going against the crowd can make you more money.
8) Read Daily
Get in the habit of reading financial news each day. News of an oil spill might be devastating but the financial angle on the story could help you protect your portfolio. It’s important to stay updated on the latest news. CNBC, the Wall Street Journal and Bloomberg are good places to start.
9) Do Your Own Research
We already talked about the dangers of blindly following someone else’s advice. You should always do your own research even if it’s just to check on the credibility of the speaker. Morningstar.com offers great tools for researching stocks, mutual funds, options and more.
If you apply these 9 tips you will be sure to be a financial success while growing your assets and your portfolio!