Investing is one of the most effective ways to increase your wealth. Individuals outside the financial industry may feel intimidated by the technical terms and overwhelmed by all the data. However, you can get better investment guidance from experienced advisors.
Nolan Govea, also known as Professor G of ‘Investing Simplified’ on YouTube, teaches people about the power of investing. He has been investing for around 15 years, and we will explore his insights for novices in this article.
Here are 10 lessons that Professor G learned from 15 years of investing:
Table of Contents
Start Slowly and Consistently
One of the biggest misconceptions about investments is that you need a lot of money to begin. If you have limited extra funds for investments, you can get started by putting in small amounts consistently. Even something as little as twenty-five dollars weekly will grow with compounding interest, so start whenever you can.
However, for beginners with larger sums available for investment, consider financial firms like Ellinghams Tokyo Japan to help you manage your funds.
Automate Savings and Investments
Automation allows you to be consistent. If you see your money in the bank, you might spend it, or forget about setting some aside for investment. For example, if you earn $2,000 monthly, you can set up your account to automatically transfer $200 to a savings account. You will eventually learn to use only $1,800 a month.
The concept of paying yourself first will allow you to reap the benefits in the future.
Ignore Media Hype
Never make investment decisions based on what the media is hyping. The media likes to provoke fear or excitement in their audience, so they may exaggerate or purposely mislead. Aside from that, they may have sponsors or companies paying them to make certain claims. That said, it’s important to keep up with current events since these can affect stock prices.
Simpler Ways Are More Effective
As a beginner, you may get overwhelmed by all the economic data and financial jargon. Experienced investors might tell you to constantly watch out for signs of a market downturn or do extensive research on the potential next big thing. Professional financial firms like Ellinghams Tokyo Japan advise keeping investments simple.
Set Clear Goals
Every venture, financial or otherwise, needs a clear goal, regardless of whether you’re developing a diverse portfolio or putting money in a regular or high-yield savings account. You can make better decisions when you stick to concrete goals.
Build an Emergency Fund
As a rule of thumb, people should save the equivalent of at least six months of your current income in case something unexpected happens, so you’re not forced to sell stocks at an inopportune time. As a beginner, you can partially build your emergency fund while slowly filling in your investment portfolio.
Don’t Push Investments on Others
Investing is a personal choice. Once you develop more financial knowledge, you will want to share what you’ve learned. As a novice in the field, you may start seeing your previously incorrect financial decisions made by other people.
You may be concerned about them, but don’t offer unsolicited advice. People have different preferences and priorities.
Tailor Investments to Your Needs
Investments are personal, so you should customize your style to your preferences instead of imitating what someone else is doing. You can take professional advice, but you should ensure that your investments are in line with your financial goals and objectives.
As a rookie, you can diversify your portfolio according to the risks you’re willing to take. It’s okay to have a small portion of your portfolio in more aggressive investments in an attempt to achieve higher returns, but only invest what you can afford to lose.
Consistency Trumps Trying to Time the Market
It’s important to invest consistently. Even the professionals fail at most attempts to time the market. It’s more effective to make smaller investments on a regular basis in good quality stocks and hold them for the long term.
Avoid Panic Selling
The last lesson is about trusting the research and investment principles. Economies and financial markets have cycles, and if you panic every time prices drop, you’ll suffer unnecessary losses. Market downturns are normal, and they eventually turn around.
Trust the Process
As a beginner, it may be tempting to make bold plays and attempt to catch big fish; however, when done right, investments can help you live a more fulfilling lifestyle. Investments are about setting good foundations rooted in sound logic and solid financial research to ensure that you make long-term profits.
Of course, financial advisers are there for a reason. Novice investors should look for professional guidance from companies like Ellinghams.