How to start investing should be an essential thing for anyone, but very few people dedicate time to this task. A person’s economic future is determined by:
- The money you earn
- The percentage you save of the money you earn
Where To Invest The Money You Save
The 3 points are fundamental. However, most people focus only on the money they earn, some go to the second step (save), and only a few take the third step (invest) seriously. The three “keys” are essential for the economic future, but there is the one that people consider the least important when accumulating wealth, we think it would be the first; the money you earn.
If You Make A Lot Of Money But Spend Everything
If you make a lot of money but spend everything, you cannot create an estate. However, it is possible to earn little, save a lot, invest well, and obtain an outstanding result. Time is also significant; accumulating a good wealth with a low income in a short time is extremely difficult. However, in long terms, time and discipline mean that practically anyone can significantly raise their standard of living.
The most important investments are:
- Stock Market: I think it is the best option for many reasons.
- Real Estate: Historically, it has been the second most profitable option after the Stock Market. Altogether, it has been a good investment, although not as good as most people believe. Investment in real estate, in practice, has quite a few drawbacks that users seldom take into account when talking about it theoretically, as can be seen in the previous link. The real estate market is pending a reform that would radically change the properties; land liberalization. If you can liberalize the land practically, the real estate value may fall significantly.
- Fixed income: Many think of this as the safest, but its real profitability (the one that takes into account inflation) is meager. You can use it temporarily, but it is not a good long-term investment due to its low profitability. It is preferable to spend some time in fixed income to buy overvalued shares. Nevertheless, it is not possible to “live on the income” by investing in fixed income. The moment you think about not reinvesting the interest, the real value of the equity begins to decrease until it practically disappears in long terms.
How To Start Investing
- The first thing that you need to do is to design wealth management and decide what percentage of the total you like to invest. It can range from 10% to 100%, depending on each investor.
- Choosing the strategy and acquiring the necessary knowledge to carry it out are parallel tasks. For this, you can read the best investing books for beginners.
- Initially, it is not easy to choose the strategy you have to have some knowledge, for which you have to read books and spend time. However, that initial lack of experience means that you cannot just choose the best investing books for beginners but the ones that suit your needs.
If you do not know which strategy to choose or which books to read, we recommend an approach that seems to be very suitable for most private investors due to its combination of profitability and long-term security. It consists of building a robust securities portfolio with good prospects that have a high dividend yield. In addition, those benefits and dividends grow in the long term above inflation. These companies are usually banks, utilities (electricity, gas, water distributors, and telecommunications operators), highways, insurance companies, and construction companies.
They are not the only ones, but many of them belong to these sectors. The fundamental analysis is the one that tries to determine the value of the companies based on their results and the assets (factories, brands, real estate, machinery, client portfolio, etc.) that they own.
How To Choose The Best Investing Books For Beginners O Learn How To Invest:
- Books to update and reinforce financial knowledge
- Books about investing successfully in funds
- What does a smart investor choose?
- Books on investment techniques and methods
- Alternative management books, analysis, and selection of funds
- Books to earn money by investing in the stock market
- Books on financial education from scratch
- Books on a fixed income
- Books on portfolio management and asset allocation
- Books to further expand your vision as an investor