How to invest money

What Is an Investment?

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You definitely know the word investment, but do you know what it actually means?

Ironically, the word investment has become kind of misunderstood because the word is so overused. People might refer to “investing” in a sofa, for instance.

The easiest way to define it is that an investment is a situation where you give a person or an entity some of your money in exchange for potential profits. Potential is the key here: profits are not guaranteed.

Investments come in different shapes and sizes. Here are some key types of investments:

  • Entrepreneurial/business investments: If you start or put money into a business, this is an investment. Being an entrepreneur is no joke, as I can tell you from past experience. It takes a ton of effort, and sometimes it can take a long time to reap the returns, if any.

However, when you do see opportunities that others don’t and add a service or product to the market that has an impact, it can pay off big time. Just ask the founders of little businesses like Amazon or Netflix.  

  • Real estate investments: In general, real estate as an investment isn’t the house you live in. It’s a home or apartment that you purchase and rent out for income, or flipping houses by repairing and then reselling them.
  • Object, art, or collectible investments: The rare baseball card from the World Series. An original Andy Warhol. Gold or jewelry from Tiffany. These are examples of items that you might buy and hope to resell at a later date for a profit.
  • Stocks: This is my bread and butter and the primary type of investment we’ll talk about in this post. A stock is a certificate denoting your ownership in a company. When you buy shares of a stock, you have certain rights to that company’s value.

Stocks have a value that is dictated by supply and demand in the market. This is tied to news, company developments, and other factors that cause demand in the stock. If there’s high demand, the price per share goes up, and your profit potential increases.

  • Bonds: When you invest in shares of a company via stocks, it is equity. Bonds, on the other hand, focus on debt. Basically, a company will issue the bond in hopes of raising money. In return for that, they agree to pay a specified amount of interest back to anyone who becomes an investor.  Bonds typically aren’t a high or quick return investment. However, they are fairly reliable and tend to be low in risk, though high-risk bonds do exist.
  • Cash and cash-equivalent investments: This category of investment includes checks received that have not been deposited, checking accounts, and money market accounts.

Where Should I Invest Money to Get Good Returns?

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That’s the universal question, isn’t it? Figuring out how to identify the best investment to reach your goals can be intimidating, and there isn’t a clear-cut answer.

The good news is that none of the aforementioned investment types are generally considered bad ideas. But in terms of delivering “good” returns, that depends on your individual constitution, goals, and risk tolerance.  

Plenty of people will start with lower-risk investments. While the returns are lower, they’re also a lot less scary.

However, if you’re like me, you don’t like waiting, and you don’t like small returns. When I started as a trader, I didn’t have a huge account — and most of my students don’t, either. So for me, the best method of investing has proven to be investing in the stock market, particularly in penny stocks.

The risk level is higher, but so are the potential returns. This is why low-priced stocks are what I focus on in my career and in my teachings.

Key Tips on The Best Way to Invest Money Short Term for Newbies

how to invest money for beginners© 2018 Millionaire Media, LLC

Now that you’ve gotten the scoop on long and short investment styles, what’s it gonna be? If you want to go short term like me, here is my thought process:

My Preferred Investment Strategy

Penny stocks are where I’ve focused most of my career. I take advantage of the volatility of the penny stocks by making short-term investments. I have made profits through trading, swing trading, and plenty of short selling.

But I’m not necessary married to one type of position. I’m married to finding profits, and am willing to follow what my market research tells me will yield the best results.

My preferred investment strategy? Identifying market patterns and using them to make educated guesses about the best times to invest. I’m not necessarily looking for companies that I believe in. Rather, I am trying to identify trends and take advantage of the fluctuations.

Control Your Mind

How can you get in the right mindset to invest? Here are some tips:

  • Don’t expect things to happen overnight. This is particularly true with long-term investments, for obvious reasons. But even relatively short-term investment strategies like day trading take time because you need to overcome a learning curve and learn what you’re doing.
  • Think in the long term. Yep, even if you’re day trading. Investments can ebb and flow. For instance, a mutual fund might go up and down on a daily basis. You don’t need to get lost in the minutiae of it, but rather, look at your progress in the long term. If it goes up and down from month to month but is gaining profits overall for the year, that’s a good thing.
  • Consider your goals. It’s important to consider your goals before you start investing. This can help you choose the investment types that are best aligned with your desires.
  • Understand your options. Knowledge is power, and this is especially true in investing. Knowing what options are best suited to your needs and understanding how they work will make you a more informed investor.

It’s Not Easy to Make Money

You didn’t like reading that headline, did you? Few people do, but this is an important topic to address because it will help you respect the hard work and risk that is part and parcel with investing.

Investing Involves Risk

I truly believe that a big part of why I have been able to gain success as a trader is that I have a healthy respect for the risk involved in the process.

I’m very motivated to keep losses small. Many of my Trading Challenge Students might even accuse me of cutting losses too quickly or taking too few profits, but I’d rather be safe than sorry.

After all, a stock that you think is a sure thing can take a nosedive in minutes. A surefire short sell could bottom out in moments.

The bottom line is that in spite of your best efforts, there’s no amount of studying that will prepare you for everything. However, you can take certain safety measures.

For instance, it’s good to never risk too much of your portfolio in a single play (the percentage will be different for every trader; stick with what makes you comfortable and don’t exceed it).

The position you take should also never be too big to affect the price action of the stock.

Also, always look for good liquidity. A stock should have at least a few hundred thousand shares traded daily. A good amount of volume is an important indicator that can help you determine that you can get in and out of your position easily.

Invest in Your Education

learn how to invest money© 2018 Millionaire Media, LLC

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It’s understandable. People don’t want to spend money to become day traders. They want to earn money, right? So it may seem backward to invest in day trading classes. However, it’s important to look at the big picture here, as the cost of a lack of education is often infinitely greater than that of a proper education.

Still on the fence? Consider this: Many of my students started out believing they didn’t need day trading classes, either. But then they got into the market and started losing money. For many, this was the realization that made them see the value in the classes.

In a delayed fashion, they realized it was a worthwhile investment. What about you? Are you willing to invest in your knowledge now, and prevent potential losses in the future?

Join My Trading Challenge

As a budding day trader, day trading classes can offer many benefits, often including a much quicker learning curve. My Trading Challenge offers ease and flexibility with online lessons that can be tailored to your schedule.

The Bottom Line

As a brand-new investor, it can be difficult to know how to invest money and where to get started. There are many directions you can go, and none of them are right or wrong — it’s about finding what works for you.

By educating yourself about how to invest money and the many investment options available to you and choosing the ones most aligned with your personal goals, you’ll be taking a powerful first step on your investment journey.

What types of investments interest you the most?

About our sponsor, BUZZ Index

Proudly sponsored by Buzz indexes (BUZ on the NASDAQ)

Ever wonder if there were a way to capitalize on all of that online chatter made by millions of investors on social media? Well, your wait is over, because now advances in Artificial Intelligence and Natural Language Processing technologies are at your fingertips…. even if you personally don’t use social media! The BUZZ Index, licensed to an exchange traded fund and trading under ticker symbol BUZ, provides investors with a portfolio of securities that delivers a basket of large cap U.S. equities exhibiting the highest degree of positive investor sentiment. No surveys. No guessing. BUZ only tracks what’s volunteered – and if you ARE online, you know that a lot of information is volunteered: millions of posts, comments and blogs are analyzed each month!

Here’s how it works: First, BUZZ targets the most mentioned large cap U.S. stocks across the Social Media landscape. The more active the conversation, the greater the reliability of the BUZZ.

Each of the most-mentioned stocks is then given an insight score based on BUZZ’s proprietary analytics and the 75 stocks with the most Bullish scores are included in the Index. Each month the BUZZ is tracked to capture the latest Big Data driven insights and then the 75 companies with the most Bullish scores are selected, positioning BUZZ to capture the highest return potential.

Invest in the wisdom of crowds. Visit MoneyTreePodcast.com/BUZZ for more information.

What happens when you win BIG in the lottery? This is the topic Miranda has been pondering when the Mega Millions jackpot reached $1.5 billion.

Linda talks about how mortgage rates over 5 percent can impact the market and what it means to you while Doug shares a story of siblings inheriting property from their parents. What could go wrong?

Our show sponsors

Proudly sponosred by Buzz indexes (BUZ on the NASDAQ)

Doug Goldstein | The Inheritance BookLinda P. Jones | Be Wealthy and SmartMiranda Marquit | Planting Money Seeds

For a quick bio of each of our show participants, head on over to our panelists page.

Send us your questions for a future Listener Letters episode

About our sponsor, BUZZ Index

Proudly sponsored by Buzz indexes (BUZ on the NASDAQ)

Ever wonder if there were a way to capitalize on all of that online chatter made by millions of investors on social media? Well, your wait is over, because now advances in Artificial Intelligence and Natural Language Processing technologies are at your fingertips…. even if you personally don’t use social media! The BUZZ Index, licensed to an exchange traded fund and trading under ticker symbol BUZ, provides investors with a portfolio of securities that delivers a basket of large cap U.S. equities exhibiting the highest degree of positive investor sentiment. No surveys. No guessing. BUZ only tracks what’s volunteered – and if you ARE online, you know that a lot of information is volunteered: millions of posts, comments and blogs are analyzed each month!

Here’s how it works: First, BUZZ targets the most mentioned large cap U.S. stocks across the Social Media landscape. The more active the conversation, the greater the reliability of the BUZZ.

Each of the most-mentioned stocks is then given an insight score based on BUZZ’s proprietary analytics and the 75 stocks with the most Bullish scores are included in the Index. Each month the BUZZ is tracked to capture the latest Big Data driven insights and then the 75 companies with the most Bullish scores are selected, positioning BUZZ to capture the highest return potential.

Invest in the wisdom of crowds. Visit MoneyTreePodcast.com/BUZZ for more information.

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Can you take advantage of any loopholes in ROTH IRA contributions to withdraw earnings tax and penalty free? That’s our first question from Jason who wants to pull from his investment in an early retirement scenario.

We also hear from Sweetcase on Facebook who asks, “How do you decide which investing product to use?”

Katrine asks if it makes sense to trade binary options. Can she make it work for her?

Got a question? Send it to us here

Our show sponsors

Proudly sponosred by Buzz indexes (BUZ on the NASDAQ)

Doug Goldstein | Goldstein on GeltMiranda Marquit | Planting Money SeedsLinda P. Jones | Be Wealthy and SmartJoe Saul-Sehy | Stacking Benjamins

For a quick bio of each of our show participants, head on over to our panelists page.

Send us your questions for a future Listener Letters episode

About our sponsor, BUZZ Index

Proudly sponsored by Buzz indexes (BUZ on the NASDAQ)

Ever wonder if there were a way to capitalize on all of that online chatter made by millions of investors on social media? Well, your wait is over, because now advances in Artificial Intelligence and Natural Language Processing technologies are at your fingertips…. even if you personally don’t use social media! The BUZZ Index, licensed to an exchange traded fund and trading under ticker symbol BUZ, provides investors with a portfolio of securities that delivers a basket of large cap U.S. equities exhibiting the highest degree of positive investor sentiment. No surveys. No guessing. BUZ only tracks what’s volunteered – and if you ARE online, you know that a lot of information is volunteered: millions of posts, comments and blogs are analyzed each month!

Here’s how it works: First, BUZZ targets the most mentioned large cap U.S. stocks across the Social Media landscape. The more active the conversation, the greater the reliability of the BUZZ.

Each of the most-mentioned stocks is then given an insight score based on BUZZ’s proprietary analytics and the 75 stocks with the most Bullish scores are included in the Index. Each month the BUZZ is tracked to capture the latest Big Data driven insights and then the 75 companies with the most Bullish scores are selected, positioning BUZZ to capture the highest return potential.

Invest in the wisdom of crowds. Visit MoneyTreePodcast.com/BUZZ for more information.

ADD, Apps, and Asset Allocation: They are all covered in today’s episode as we answer listener questions.

  • Alicia asks “What do you think of the app “Stash”?
  • Sally and her husband have committed to pay off all their debt in 5 years. They are 3 years into it but feel like she’s putting herself into a “lack” frame of mind. Is there a better way to do what she’s doing in order to better manage life now?
  • Katie says she has ADD and it’s hard to concentrate. How can she concentrate and follow-through with investing. Where should she start?
  • Jillian wants to know if financial planners begin with overall net worth and then work back to find the best asset allocations for their clients?
  • A fan sent us a question on Twitter. He/she said they are maxing out their 401(k), but it doesn’t feel like I’m doing enough? What can I do to get out of the rat race sooner?
  • Shanna asks if we have an episode about opening an investment account for a child? Miranda points out that we don’t, but here’s something she did about this very topic on Adulting.tv’s Facebook page (click here)

Our show sponsors

Proudly sponosred by Buzz indexes (BUZ on the NASDAQ)

Linda P. Jones | Be Wealthy and SmartMiranda Marquit | MirandaMarquit.comDoug Goldstein | Goldstein on GeltJoe Saul-Sehy | Stacking Benjamins

For a quick bio of each of our show participants, head on over to our panelists page.

Send us your questions for a future Listener Letters episode

About our sponsor, BUZZ Index

Proudly sponsored by Buzz indexes (BUZ on the NASDAQ)

Ever wonder if there were a way to capitalize on all of that online chatter made by millions of investors on social media? Well, your wait is over, because now advances in Artificial Intelligence and Natural Language Processing technologies are at your fingertips…. even if you personally don’t use social media! The BUZZ Index, licensed to an exchange traded fund and trading under ticker symbol BUZ, provides investors with a portfolio of securities that delivers a basket of large cap U.S. equities exhibiting the highest degree of positive investor sentiment. No surveys. No guessing. BUZ only tracks what’s volunteered – and if you ARE online, you know that a lot of information is volunteered: millions of posts, comments and blogs are analyzed each month!

Here’s how it works: First, BUZZ targets the most mentioned large cap U.S. stocks across the Social Media landscape. The more active the conversation, the greater the reliability of the BUZZ.

Each of the most-mentioned stocks is then given an insight score based on BUZZ’s proprietary analytics and the 75 stocks with the most Bullish scores are included in the Index. Each month the BUZZ is tracked to capture the latest Big Data driven insights and then the 75 companies with the most Bullish scores are selected, positioning BUZZ to capture the highest return potential.

Invest in the wisdom of crowds. Visit MoneyTreePodcast.com/BUZZ for more information.

Chris Hogan speaks to people all over the nation about how to make better moves with their money. As one of Ramsey Solution’s speakers, he has the opportunity to address thousands of people who are looking for knowledge, solutions, and answers to their money problems.

About our sponsor, BUZZ Index

Proudly sponsored by Buzz indexes (BUZ on the NASDAQ)

Ever wonder if there were a way to capitalize on all of that online chatter made by millions of investors on social media? Well, your wait is over, because now advances in Artificial Intelligence and Natural Language Processing technologies are at your fingertips…. even if you personally don’t use social media! The BUZZ Index, licensed to an exchange traded fund and trading under ticker symbol BUZ, provides investors with a portfolio of securities that delivers a basket of large cap U.S. equities exhibiting the highest degree of positive investor sentiment. No surveys. No guessing. BUZ only tracks what’s volunteered – and if you ARE online, you know that a lot of information is volunteered: millions of posts, comments and blogs are analyzed each month!

Here’s how it works: First, BUZZ targets the most mentioned large cap U.S. stocks across the Social Media landscape. The more active the conversation, the greater the reliability of the BUZZ.

Each of the most-mentioned stocks is then given an insight score based on BUZZ’s proprietary analytics and the 75 stocks with the most Bullish scores are included in the Index. Each month the BUZZ is tracked to capture the latest Big Data driven insights and then the 75 companies with the most Bullish scores are selected, positioning BUZZ to capture the highest return potential.

Invest in the wisdom of crowds. Visit MoneyTreePodcast.com/BUZZ for more information.

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Anand Talwar from Ally Bank explains how banks make their money.

The primary way is through loans. Consumer loans, such as Ally’s leading auto finance business, need to charge more in interest rates than they are paying out in savings account interest. This ensures the entity earns more than it spends on overhead and other expenses.

Anand points out that brick-and-mortar banks have different expenses than online banks, as they need to cover facilities costs and on-site employees. This makes it easier for online banks to offer more competitive rates for their customers.

Mobile banking has become much easier and convenient for the average customer. Smartphone apps allow you to deposit checks, transfer money, and even . If you are looking for cash, the apps can help locate an ATM within your network in close proximity to you.

Banking apps, such as Ally’s, can also allow you to trade stocks and ETFs, and customer service representatives are available 24 hours a day to help you open an IRA.

The convenient services allow banks to provide you more services and products with less friction, making it much easier to do business with a bank.

Ally estimates there are more than $3 trillion dollars of consumer’s deposits are sitting at banks making almost nothing. That translates to $50 billion dollars of interest consumers are missing out on, but can be improved just by switching your bank.

Ally will be facilitating “National Online Banking Day”, so visit Ally.com/payback to see what they are offering.

About our sponsor, BUZZ Index

Proudly sponsored by Buzz indexes (BUZ on the NASDAQ)

Ever wonder if there were a way to capitalize on all of that online chatter made by millions of investors on social media? Well, your wait is over, because now advances in Artificial Intelligence and Natural Language Processing technologies are at your fingertips…. even if you personally don’t use social media! The BUZZ Index, licensed to an exchange traded fund and trading under ticker symbol BUZ, provides investors with a portfolio of securities that delivers a basket of large cap U.S. equities exhibiting the highest degree of positive investor sentiment. No surveys. No guessing. BUZ only tracks what’s volunteered – and if you ARE online, you know that a lot of information is volunteered: millions of posts, comments and blogs are analyzed each month!

Here’s how it works: First, BUZZ targets the most mentioned large cap U.S. stocks across the Social Media landscape. The more active the conversation, the greater the reliability of the BUZZ.

Each of the most-mentioned stocks is then given an insight score based on BUZZ’s proprietary analytics and the 75 stocks with the most Bullish scores are included in the Index. Each month the BUZZ is tracked to capture the latest Big Data driven insights and then the 75 companies with the most Bullish scores are selected, positioning BUZZ to capture the highest return potential.

Invest in the wisdom of crowds. Visit MoneyTreePodcast.com/BUZZ for more information.

Would you move to an overseas city if it only cost $40k a year to live?

CNBC wrote an article about five overseas cities where you could have a comfortable retirement for $37,000 a year.

Miranda, Joe and Linda talk about the things one would have to leave behind but also the benefits of moving to a different location that don’t only have to do with money.

Pros and cons to moving overseas:

  • The internet makes it easy to connect with anyone almost anywhere in the world
  • In some locations the internet isn’t always accessible or reliable
  • Many overseas locations have better weather conditions
  • Some countries have areas with greater concerns for security
  • The cost of living can be much cheaper
  • You need to be concerned with the availability and cost of healthcare

We also go over the things you need to consider having in place before moving.

Links:

CNBC article: https://www.cnbc.com/2018/09/14/retire-on-37000-a-year-in-these-five-overseas-cities.htmlInvestmentNews article: http://www.investmentnews.com/gallery/20180918/FREE/918009998/PH/10-countries-where-you-should-consider-retiring

Our show sponsors

Proudly sponosred by Buzz indexes (BUZ on the NASDAQ)

Miranda Marquit | Planting Money SeedsLinda P. Jones | Be Wealthy and SmartJoe Saul-Sehy | Stacking Benjamins

For a quick bio of each of our show participants, head on over to our panelists page.

Send us your questions for a future Listener Letters episode

About our sponsor, BUZZ Index

Proudly sponsored by Buzz indexes (BUZ on the NASDAQ)

Ever wonder if there were a way to capitalize on all of that online chatter made by millions of investors on social media? Well, your wait is over, because now advances in Artificial Intelligence and Natural Language Processing technologies are at your fingertips…. even if you personally don’t use social media! The BUZZ Index, licensed to an exchange traded fund and trading under ticker symbol BUZ, provides investors with a portfolio of securities that delivers a basket of large cap U.S. equities exhibiting the highest degree of positive investor sentiment. No surveys. No guessing. BUZ only tracks what’s volunteered – and if you ARE online, you know that a lot of information is volunteered: millions of posts, comments and blogs are analyzed each month!

Here’s how it works: First, BUZZ targets the most mentioned large cap U.S. stocks across the Social Media landscape. The more active the conversation, the greater the reliability of the BUZZ.

Each of the most-mentioned stocks is then given an insight score based on BUZZ’s proprietary analytics and the 75 stocks with the most Bullish scores are included in the Index. Each month the BUZZ is tracked to capture the latest Big Data driven insights and then the 75 companies with the most Bullish scores are selected, positioning BUZZ to capture the highest return potential.

Invest in the wisdom of crowds. Visit MoneyTreePodcast.com/BUZZ for more information.

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