Since creating All Things Money, investing is a topic I probably get asked about the most. Why? Probably because it is talked about so much that it makes people who are not currently investing feel like they have been left out of some exclusive club. I started my investing journey early last year and I can easily say that learning how to invest was one of the best things I have decided to do. For anyone who is new to investing, then investing is an alternative option to putting your money into a savings account. With interest rates at an all-time low, the stock market has become a much more attractive place for people to invest their money. Since investing my first £1000 on the stock market, I have become a lot more confident with investing so I thought I would share 3 things I have learnt since making my first investment.
1) Anyone Can Invest
This is the biggest lesson I have learnt since learning how to invest. If I can learn how to navigate the stock market, then I promise you, anyone can. You don’t need a 1st class degree in trading or a spare £10,000 to invest. All you need is the desire to learn how the stock market works and some spare cash you don’t mind particularly losing. As there is an element of risk when investing in the stock market, it is always important to conduct thorough research and to have some savings set aside first before you decide to delve into the world of investing. I promise you, it really isn’t as difficult as it may sound. My Investing Guide is an excellent place to start if you are looking to learn more about the absolute basics!
2) There Is the Potential to Earn a Lot of Money
If you are yet to begin your investment journey, I can understand why some people may feel sceptical about this one. How can you actually make money on the stock market? Well, on the stock market, the price of a share constantly fluctuates. There are a number of different reasons for this. But to put it simply, the price of a share fluctuates due to supply and demand. So when more people want to buy a particular share, the price goes up. And in contrast, when more people want to sell a stock, the share price falls. As a result, the overall aim is to try and purchase shares when they are relatively low in price and eventually sell them when the price has increased – resulting in a profit. According to Business Insider, the 10-year average stock market return is 9.2%. So, if I was to invest £100 a month at this average rate of return, I could potentially have £37,551.37 after just fifteen years! (Assuming my investments continued to rise in value.)
3) The Earlier You Start Investing the Better!
Ever wondered when the best time to invest is? Well, another lesson I have learnt is that if you’re looking to invest in the stock market, it’s best to start as soon as possible! This is because the earlier you start, the longer you can leave your money to gain compound interest on the stock market. Even if it that means you start with a small amount of money, your money still has the potential to grow thanks to compound interest. No amount of money is too small when investing on the stock market! Whilst it is best to start investing as soon as you can, it is also important to note that it is never too late to start investing either! So whether you are 21 or 51, investing is a great way of multiplying your wealth which I couldn’t recommend more!
Hopefully, this short and sweet article is a helpful insight into what I have learnt since making my first investment! Investing in the stock market may seem very daunting for some whilst it may also be a very appealing option for others. If you are still sceptical about investing and the risks associated with it, then please don’t do it! However, if you are wanting to make your first investment, please make sure you conduct thorough research first and are aware of the risks involved when investing in the stock market. If you would like to learn more about the basics of investing, then you can grab a copy of my Investing Guide here.
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