Entering the world of investing is difficult at any age. Before you’ve learned the ins and outs of it, it seems like others are talking a foreign language! But, is there an age where you’re considered too young to be an investor? No! Anyone can do it, and they can excel at it, too. There are loads of things you’re going to need to know, though. When you’re dealing with money, you can’t afford to make too many rookie mistakes.
Today, we’ll go through a few tips and tricks that you’ll need when starting out. We’ll also take a look at the pitfalls you might encounter along the way.
Get Your Finances In Order
Believe or not, the risk levels for a young person aren’t quite as high as a middle-aged adult. You’ll have chances to make back any losses over time, but that doesn’t mean you can afford to be reckless. In the early stages, you need to make sure you’ve got the funds necessary to make investments. If you’re in debt or planning to spend vast amounts on college in the future, you probably want to hold off for a while.
There are a lot of reasons why starting slow is your best option at this point in time. Firstly, it’s down to experience. You simply can’t equip yourself with the knowledge and experience you need in order to pull off big investments decisions right away. Start small, and allow yourself the ability to make mistakes from time to time. Remember that it’s best to keep your money in stocks for as long as you can, too. Preferably, you’re looking at more than ten years.
Learn The Basics Of The Stock Market
Welcome to the stock market. It’s a very difficult thing to get your head around; you’ll be learning lots of information for a long time to come. For starters, it’s important to understand the basics of what you’re dealing with. Use online guides and resources like Money Morning today to help you keep a constant track of things. Also, talk to friends and family about their experiences with the stock market. Anything you can learn will be valuable in helping you make the right decisions.
Analyse Every Bit Of Information
Here’s our first major pitfall that you might run into as a young investor. Due to your lack of knowledge and experience, you might make a decision that isn’t well thought out. When investing in anything, you need to be asking questions of the investment. If something seems too good to be true, it probably is. It’s your job to delve into all the underlying information that will indicate whether this is a good opportunity or not. Don’t be fooled into a bad decision.
Seek Help From The Experts
This all depends on how much money you have, and whether you’re willing to spend it for this cause. As you’re new and inexperienced, it’s always good to have a helping hand around you. Financial experts like wealth advisors can help you to make the right investment decisions by using their expertise. It’s easy to find them, and they’ll be all too pleased to do the job. You probably won’t want to keep paying for them on a long-term basis, but for now, they’re a good option. They’ll certainly help to prevent any major catastrophes that you might make by accident.
Time Is On Your Side
Another pitfall that often catches young people off guard is the desire to make instant money. The future appears to be a long way away, and things like retirement don’t get a second thought. However, long-term investments are important, even if they only make small profits over a long period of time. Sure, you can make investments that look to make instant cash but think about the future, too.
Learn From Your Failures
At the start of this article, we mentioned how you couldn’t afford to make too many mistakes when investing. That’s certainly the case, but you will make mistakes. Everyone does, and it’s a result of not being knowledgeable or experienced enough at this early stage of your career. Also, any investment is always a risk. It won’t go your way 100% of the time, so you need to be prepared for when it doesn’t. Most importantly, learn from those failures. Use them to boost your knowledge and find alternate investing opportunities that will gain success.
If you’re a procrastinator, the investment world is going to be difficult to get used to. The reason for this is because there won’t be many times when a perfect investment comes along. If you’re averse to taking risks, you’re going to miss out on that opportunity unless you take it right away. The rest of the market will beat you to it, leaving you in a bad position. A common way that many young investors rebound from this is by showing regret. They’ll invest in something similar with the hopes of salvaging their loss, but this can pose big risks. Great investment ideas come along rarely; be ready to take them when they do.
Don’t Listen Too Much To The Media
Once you get involved in the investing world, you’ll start to notice it in today’s media. You’ll be reading newspapers, online articles and watching the stock market news on TV. You’ll be hearing constant recommendations to buy and sell, and told about companies you should be watching. Don’t pay too much attention to this. Most of this information relates to active investing, which isn’t necessarily the best idea to go for. For many people, this doesn’t provide a successful method of investment.
Let’s get back to that original question, then. How young is too young to be an investor? Investing doesn’t really pose any age limits for adults. If you’re a strong-willed 18-year-old with an eye for success, you should definitely go for it. Abide by the suggestions we’ve made, though, and make sure you’re expanding your knowledge and experience along the way.