Editor’s note: This article was first published in July 2010. Its suggestion of educational CDs and DVDs as a learning resource reflects 2010.
Let’s start by saying that investing isn’t gambling. There’s a huge difference. A gambler plays with chance and an investor plays with knowledge. We’re going to start a series of tips for those who are thinking about investing but don’t know how to go about it. This is the first of five chapters we’ll be publishing.
First of all, knowing the fears of someone who’s about to start investing, one of them being the fear of losing money or of not having enough money because of debt, I think it would be a good idea, first and foremost, to read our previous article on how to get rid of debt, especially credit card debt.
If you’re starting to invest, you need to build up your financial intelligence. So if you’re one of those people with debt on their credit cards and consumer goods, start there.
That’s one of the steps toward the financial freedom so many people long for. These aren’t miracle articles. Rather, I want you to see them as a learning guide. So before investing, what better than to learn about the types of investments and investors, so you can get your bearings in the world of investing? Read our article The 7 levels of investors.
Once you’ve got your bearings in the world of investing, let’s start your learning step by step.
First step: set aside five hours or more a week for one or more of the following activities:
1. Read the business and stock market section of your local newspaper or the Wall Street Journal. At first you may not understand a thing, and it may even seem boring, but you need to get familiar with some of the terms and give yourself the chance to ask about the ones you don’t understand.
2. Listen to the financial news on TV and radio.
3. Listen to educational CDs or watch DVDs about investing and financial education. Also read books by people who have made their money from investing, Robert Kiyosaki for example. I recommend starting with a series of three books:
- Rich Dad Poor Dad
- Cashflow Quadrant
- Retire Young Retire Rich
It’s very important to read them in that order. All three are by Robert Kiyosaki. Later on I’ll recommend other, more advanced investing books.
4. Read financial magazines and newsletters.
These are the first steps into the world of investing. If they seem boring to you, your investments are doomed to fail, because every investor has gone through them. Just as in business, there are no shortcuts in the world of investing. There are only shortcuts to failure.
If you’re thinking of investing by placing your money in the hands of people who invest for a living, make sure they’re very wealthy people who have already made fortunes investing. If not, what makes you think they’ll achieve for you what they haven’t achieved for themselves?
Continue with part 2 of the series: How to be a successful investor.
We’ll keep taking the next steps as we go along. In the meantime, here are some other articles on investing.
Further reading
- Investing in Spanish public debt
- Returns on Nueva Rumasa promissory notes
- A good time to invest in Inditex
- Investing in a company merger: why?
Featured image: Mk2010, CC BY-SA 4.0, via Wikimedia Commons.
