So, you’ve got your Robinhood account and you’ve learned your lesson about Bitcoin.
Well, if you’re like lots of other people, you’re ready to get serious about your investing education. You found out that meme stocks can’t go up forever.
You might have started looking around online. Sadly, most of the advice on beginner investing isn’t geared toward you. Lots of people describe index funds and retirement, but that’s not your big focus. Your 401(k) or IRA are doing fine. You’re looking for something more.
You want to know about investing.
Maybe you looked even deeper online, too. But that’s when you ran right back into the crypto fanatics – or the gold fanatics or the Tesla fanatics or whoever else. Their ideas are all over the place, just like you saw with the buzzy stocks on Reddit.
And anyway, you aren’t sure you like Tesla as a business model right now. And you definitely aren’t sure about Dogecoin.
You want to know more. But you don’t want it from the meme lords.
If this is you, read on…
Intro to Investing Part One: What You Really, Really Want
So, you’re ready try actual investing.
You’ll need to get clear on a few things first:
No. 1: Know what money you’re investing and why.
That sentence sounds weird, but hear me out. What money is in your investing account and why is it there?
Is it the cash payouts from your rebate app? Is it the profits from your crypto? Is it the earnings from your resales?
You need to be clear about what this money is because it tells you when and how you might withdraw that money. Timeframe matters in investing.
If that cash comes from your resale or design profits, do you plan to withdraw it in the next year or so – maybe to reinvest in your business?
Or is it money that you’re not expecting to touch anytime soon? That would be something like surprise crypto profits. Maybe you don’t mind leaving that cash alone to grow.
Get clear on this first, and the rest will be easy.
No. 2: Know what you want to invest in.
Now that you’re clear on the money that’s there, you need to decide what you want that money to do.
If you’re interested in quick profits, you’ll want to invest in high-risk-high-reward stocks. The plan there is to get big profits within a year or two.
But, as the name says, that kind of strategy comes with lots of risks. We’re talking about investing in things like AI startups or new apps here. There’s a chance they’ll crash and burn.
Think back to Bitcoin: On any given day, it could zoom up hundreds of dollars… or fall to its lowest price ever. You could make big profits… or you could lose it all.
If you know that going in, you can be mentally prepared, if nothing else.
On the other hand, if you want to watch your account grow (and grow, and grow), you can afford to invest in things that take a little longer to play out.
That’s things like Google’s or Walmart’s stocks. Those are big companies, and they won’t make waves on your feed. But they’ve both doubled in price over the past few years. And their investors were never worried about them shutting their doors.
If you have your eye on using your money to fund someone’s education or a home down the line, this is the plan for you.
As you might have guessed by now, most serious investors use money that they’re ready to not see for a while. And they focus on long-term growth. That money is like a seed that grows into the cash that they can use to buy that electric car, take that trip to Ibiza, or pay for graduate school.
There’s nothing wrong with short-term investing. (And in this series, I’ll explain the ins and outs of that strategy, too.)
But we can’t deny that the experts are using a longer-term strategy. They’re jumping in on investments that aren’t just about hype.
And average investors like us can do the same thing. I mean, you can’t brag about it to your high school crush on FB. But really, who uses Facebook anymore?
In this series, I’m going to show you how you can create a portfolio that gets you real profits. I’ll tell you how the pros think about their investments and how that helps them make money.
And I’ll tell you about what I think is probably the best spot to park your cash for the long term.
I hope you stay tuned.