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About to start investing? Read this first


Investing is usually something that works out better for you if you’re taking a long-term approach. With that in mind, it’s absolutely understandable that many students will want to begin investing as soon as possible. By putting a bit of money down on an asset while you’re young, you’re giving yourself a lot of time to build up then reap the rewards.

But this doesn’t mean that you should rush into things, of course. Investment isn’t as easy a game as many people like to make out. If you’re interested in starting, give this article a read first. Here are some of the factors you should be considering.

Assessing your goals

So what exactly do you hope to achieve when you set out to invest? And no, don’t just say “to get dollar dollar bills y’all”. You need to get a bit more specific than that. Different investments are going to provide you with different methods and experiences. It’s these that you need to be considering. Are you going to play it high risk? Are you looking for a steady income? Do you simply want to invest and forget about it, perhaps coming back to it in twenty years time? This is all important when it comes to building your plan.

Doing your research

There are so many resources out there for young investors. You need to make sure you can find those resources, and that you’re willing to spend the time to read them thoroughly. Don’t fall for those expensive seminars that some people offer, “guaranteeing” you an easy route to millions. You have to be willing to sit down for a long time and do some hard work. These trading tips and tricks should help you get started.

Dealing with taxes

Just like every other form of income, the government is going to want a share of this, too. When you earn money through investments, there are a lot of tax implications to get your head around. All the different types of investments will have different tax rules that you need to adhere to. Speak to a tax or financial advisor, or go to investment-based tax websites for more information.

Diversity

You’re probably heard the phrase diversify your portfolio a few times. It sounds like one of those ridiculous phrases that are only used by people who don’t really understand what it means. But understanding portfolio diversification is important when you’re starting out. Some students take this the wrong way, though. They think it means they need more money so they can put large amounts in several assets. What you should actually be doing is spreading the capital you already have. Do it in smaller amounts across several opportunities. Basically, don’t put all your eggs in one basket!

Going solo or getting help

Will you be going this alone as a personal investor? This might be a good route if you’re an economics or finance student, or if you’re well-read in the subjects. You’ll have a better understanding of the various industries, markets, and currencies. But if you’re not that well-versed, you might want to work with an investment banker.

Photograph by TradingAcademy

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