Investment Advice 4 Tips For The Newbie Investor

Most people are going to invest in something over the course of their lives. It could be real estate, a life insurance policy or stocks and bonds. And no matter what you invest in you always want to invest smart. By investing smart you can give your family both security and peace of mind. Make poor investing decisions and you could leave your family in a world of hurt. Below I am going to share with you four very important tips for the newbie investor.

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The tip is to start now. The younger you start investing the better. And that's because according to Albert Einstein, compound interest is the eighth wonder of the world. When you start investing early you don't have to invest as much to reach your goal.

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Let me give you an example, let's say you want to retire at 65 with $500,000 in your retirement account. We will use a 6% return for this example. If you start investing around the age of 35 you will need to invest a little less than $500 a month for the next 30 years to reach your goal. On the other hand, if you wait till you turn 55 to start investing you will have to save a little over $3000 a month to reach your goal.

That's a big difference. So start investing now so you can yield a much higher return. The second tip is to buy safe. This piece of investment advice only applies to when you are first starting out. Investing can be a very intimidating and overwhelming experience. With so many different investment strategies and options you can spend you whole life trying to figure everything out.

So your best bet is to start simple. Buy safe while you are navigating the learning curve. Doing so will give you the knowledge and confidence to make riskier investments in the future. My third piece of investment advice is to use a broker. Again, this is something that only applies when you are first starting out.

I know you may be tempted to use online services but I encourage you not to do so. When you are first starting out a broker can prove to be invaluable. A broker can explain everything to you. They can also guide you in the right direction. The key however is finding a good broker with a good reputation. As around to see if someone can refer you to a honest broker.

And last but not least, practice, practice, practice. Before you go at full speed ahead take the time to test the waters. One simple way to do this is to start investing in penny stocks. With penny stocks you can make investments without investing a lot of your money. And while they can be a little risky, they provide you with a great way to gain a little experience.

You can also use what is known as a trading simulation service. With this option you will be investing virtual money in a virtual stock market. However, the market you will be using is based on the real market. So you can basically get real life experience without spending any real money.

 

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