A lot of the time, we think we have to weight till we have a lot of money before investing but nothing is farther from the truth. As a matter of fact, no matter how small the money you have is, you can invest in the stock market.
If you have never invested your money before or you have some money which you consider small, here are a number of ways to invest it and get returns on the long run.
Find Something That Requires Low Minimum Investment
It is always better to get started with something than not do anything at all simply because you feel you don’t have enough. As little as 10,000 Naira is enough to buy a number of shares in some companies.
A lot of companies are looking at encouraging people without a ton of money and you can choose to ask a number of fund managers such as Mutual Benefits, Lead way Assurance and others on which plans would be suitable for you.
Read As Much As Possible
The simple truth is knowledge is power and reading articles and books are a great place to start educating yourself. The questions you have have likely been asked before. Some recommended books on financial advise you can read include books by Warren Buffett, A Random Walk Down Wall Street by Burton Malkiel and Stress Test by Timothy Geithner.
Furthermore, read news, financial statements, press releases and earning calls. While you may find words you don’t understand, you can look them up in the dictionary or read up online. While you may struggle in the beginning, you will start to understand as time goes by.
Learn to enjoy reading financial books as there are no two ways around it. If you find yourself investing without reading tons of books, you stand a high chance of losing.
Keep Things Simple
When it comes to investing, people that invest small amounts are usually the ones that makes the biggest mistakes. As a way of minimising beginner mistakes, you can use an app or website known as robo-adviser that replaces dealing with a live person.
Robo-advisers ask you questions on preferences and goals when you open an account, and then create a personalized allocation based on your answers.
it is essential to stay disciplined, even when the stock market takes a negative turn. Try not to change your allocation or preferences. Stay put. Those who have the least transactions and changes will typically do better.
Your investment strategy should be representative of your savings capacity, your current goals, your risk tolerance and your overall budget. There is not a ‘silver bullet’ recommendation that works perfectly for every single person.
This is why it is important that you work with a financial advisor or someone who has analyzed the different aspects of your investment philosophy and then provides a recommendation that makes the most sense for you at a particular time.