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A Newbie’s Guide To Investing Money

Financial experts all over the globe preach the importance of investing your money. They say it’s one of the crucial things to do with your finances, and the benefits will last long into the future.

This is all well and good, but there are still loads of people out there who haven’t got a clue where to start with regards to investing money. When countless people tell you to do something, but you don’t really know how, you’ll either do nothing at all, or you’ll do things wrong.

Consequently, you may make bad investments that cause you to lose a lot of money. Nobody wants this, which is why you’re reading this article.

Think of this post as a guide for any newbies out there with no knowledge or understanding of investments. Here, you will learn all the basic things you need to make smart investments and protect your finances. So, without making you wait any longer, let’s get right into it!

What are investments?

We’ll start with the most basic of questions; what exactly are investments? Some of you might not be complete newbies and will know the answer, while others may be a bit unclear on things.

To put it simply: an investment is when you take a sum of money and spend it on something with the intent to increase that sum of money and make a profit. There are plenty of examples of this, but I’ll devote a whole section to them later in the article.

Why should you invest money?

I suppose it also makes sense to cover why you should actually invest your money. It’s a bit of advice you hear all the time, but do you ever get the reasons for it?

Personally, I see investments as a smart way of saving your money. When you think about it, they’re almost like savings accounts – but you can earn a lot more profit from them. You can set aside a portion of your personal finances, invest it in something, and watch that money grow safely (provided you made a smart investment!). Then, after a period of time, you can sell your investment and take that money back into your account.

Doing this helps you grow your savings a lot quicker than if you used a savings account with a pretty poor interest rate. It also means you put some money aside, which prevents you from spending all of your personal finances.

Many people choose to invest their money from a young age and keep their investments intact until they retire. Therefore, investing can also be a great way of saving for your retirement fund in the future.

What can you invest in?

As I mentioned earlier, there are plenty of things you can invest in. It will amaze you how different and diverse these things can be! Below, you’ll find a list of some of the most common investments out there:

Stocks/Shares

Perhaps the most common of all investments, stocks/shares are popular because they’re very easy for people to invest in. You invest via the stock market, and usually through a broker who knows what to invest in for you.

The best idea here is to invest in stocks that are steady growers and have previously increased in value over many years. This is a great way of investing your money safely, and still getting a good return in a few years time.

Real Estate

If you have enough money, then real estate is probably one of the best things to invest in. It creates massive profit opportunities as you can earn money by renting out properties or buying and selling them.

They’re normally safe investments too, the only real issue is that you need lots of money to invest in real estate.

Collectibles

A lot of people choose to invest their money in collectible items.

The most obvious example of this is a collectible coin. Many countries release new coins all the time that become very rare because they’re either made for a specific occasion or were one of the first coins made of that variety.

You’ve also got bank notes, along with other collectible things like famous records from famous bands, or limited edition toys, etc. These can be good to invest in because you can get massive returns over time, but they do carry a bit of a risk compared to other investment ideas too.

Gold/Silver

Gold and silver are very popular things to invest in for numerous reasons. Mainly, they will always have a value. There’s never going to be a time where gold or silver becomes completely worthless.

Plus, there are lots of ways you can invest in either of these things. There are things like Omnia silver coins that you can buy for hardly any money, and then wait until the price of silver rises before selling them. You can buy gold bars or coins as well, and do the same thing. It’s a good long-term investment idea and is one of the most accessible around.

Naturally, there are lots of other things you can invest in as well, but these are some of the most popular ideas that I thought I’d list to give as examples.

Can You Predict What Your Investments Will Be Worth?

Some people see investments as a risk because you don’t know how much you’ll earn. While this can be the case, it’s unlikely to be an issue if you invest wisely. A lot of newbies to the investment game will also wonder if you can work out what your investments will be worth. Now, this is possible, but the results vary in accuracy. You can find personal investment calculators that let you input some figures and give an estimation as to what your investment will be worth by a certain date. This tends to be the most accurate way of doing things. 

As a result, this can give you more confidence that your investment will be worth the money. Of course, these things are never 100% accurate because they can’t predict certain market conditions. Still, they definitely offer the best overview of how much you can potentially earn.

What’s the best investment advice out there?

The best investment advice out there is to play it safe. Don’t make risky investments because you could lose a lot of money. Find things that have low risk/high reward potentials. These are things that will grow in value over time and don’t stand a realistic chance of just going downhill at any given moment.

I’d also say it makes sense to get advice and help from industry experts whenever possible. Speak to an investment banker, and they could help you invest in the right things.

Speaking of which, one way you can invest your money is by opening an investment savings account (often called an individual savings account). This is basically a bank account where you deposit money, and then it’s invested in loads of different things. All your investments are handled by professionals, and they will diversify your assets so your money is spread out and can yield better results. This is well worth thinking about if you want a safe way of investing!

I hope this guide has been valuable to all the investment newbies out there. Now, you can go out and be smart with your money!

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