Confused about where to start? Afraid of making a mistake? Just take one step: just start.
Certainly it is intimidating to begin investing. Is X a good investment? Will I be taken for a ride? Who can I trust? Will I lose my money? Will I regret it forever?
Endless questions, fears, doubt, worry. It’s a new world, and we are in the water with sharks, or so we feel.
Let It Go, Let It Be
The simplest path is the best. A few guidelines…
– Just Begin
– Don’t invest all your money at one time
– Avoid companies in the headlines
– Avoid the flashy
– If you don’t understand it, don’t invest in it
– If someone gets a commission, avoid it
– If someone wants your money, don’t give it to them
– Choose a conservative company that pays dividends
– Reinvest dividends
Let’s look at each of these items.
– Just Begin
We think and over-think. Sometimes we lead ourselves into analysis paralysis. Don’t let fear and uncertainty stop you from starting. Yes, we will later revise our decisions. We will later change what we previously chose. But at least you will in the game. You can’t win unless you’re at the table.
– Don’t invest all your money at one time
Sometime we feel we need to stake it all to make a big score. That means taking on too much risk. Start small, get acclimatized to investing, following the economic news, and so on. There will be time enough to invest more, to invest in other companies.
– Avoid companies in the headlines
Companies in the headlines are not stable, conservative companies. They are objects for those chasing news. Don’t guess what will happen. Choose slow and steady, and your investment will grow over time.
– Avoid the flashy
Same as headlines. Anything new and flashy is just a walking talking money trap. Flash goes as quickly as it comes.
– If you don’t understand it, don’t invest in it
Options, crypto-currencies, derivatives, all are death for the investor. Sales people will talk a good game, but you will end up with less than you started. Someone else will get away with your money.
– If someone gets a commission, avoid it
These days, it is possible to invest with no commissions. If a commission is needed, you don’t need it. Find a reputable broker or platform that will be around when you need it. The good ones will not require a commission.
– If someone wants your money, don’t give it to them
If someone wants you to give them your money because they have a system, or they know what to do, or they are talking a good game, or they know someone who knows someone…, run! Similarly, don’t pay for “research.” There is plenty of free information on the internet.
– Choose a conservative company that pays dividends
Find a large stable company that has been paying dividends for decades. Look up its dividend history. If it cut dividends in the last 25 years, avoid it. You want a steady and solid company that won’t pull the rug out from under you.
– Reinvest dividends
This is item that will grow your wealth. Let those dividends compound. It will give you peace of mind, and wealth will follow.
That’s my opinion.
Congratulations, you are on the right path. Get started!
What is your plan? Let me know here.
The illustration thought to be a sugar-apple (Annona squamosa) is from Flora Sinensis, by Michael Boym (Michał Piotr Boym), a missionary in China, in 1656. (This work is in the public domain in its country of origin and other countries and areas where the copyright term is the author’s life plus 100 years or fewer.) Courtesy Wikimedia Commons. The original illustration is at Université de Namur (University of Namur) in Belgium
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