Investing can seem like a daunting way to start building wealth if you don’t know much about it. And the fact is, many people are confused or uncertain. According to Invest Right, a common barrier to investing is simply not knowing enough to get started. Moreover, as many as 39% of Americans don’t have any money invested in the stock market, at all, according to Bankrate. Here we look at other aspects of investment that most Americans don’t know about with the goal of helping you get educated, the first step to growing wealth.
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You Can Learn the Fundamentals of Investing Yourself
If you think you can’t get started investing because you don’t know how, information is available in any number of places, said Jeff Mains, financial expert and CEO of Champion Leadership Group LLC.
“Despite the fact that the expanding brokerage sector is a hive of rivalry to provide the newest and greatest trading alternatives, most investors will find that the fundamental necessities can be found almost anyplace.”
You can consider reading investing books to learn the terminology; follow personal finance websites and or social media channels; or practice with stock simulators — tools that simulate stock market fluctuations without needing you to invest any money.
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Advisors Are Unnecessary
If you think you need an investment advisor on hand, whom you must pay frequent fees or a monthly retainer to, you’re incorrect, said Nate Nead, managing principal at Invest.net. “Most retail investors are unaware…that it’s about four times more expensive to have an advisor who adds no value–dipping into your earnings with some type of fee,” he said.
This conundrum has only become more pronounced with the advent of the robo-advisor, he explained.
He said that while investors may want the security of someone to talk to about their finance and investment decisions, “they should pay hourly for advice and let today’s markets and tools do the work for them at a fraction of the cost.”
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You Don’t Need To Cut Expenditures To Start Investing
If your approach to freeing up the money to invest is to cut expenses, Matthew Robbs, founder of Smart Saving Advice, claimed “that is 100% the wrong advice.” Instead, he recommends trying to increase your income and invest the extra money that you make.
“Starting a side hustle has never been more popular and many people are even building those side hustles into full time businesses. Something as simple as going out to garage sales or thrift stores can easily net a few hundred or thousand dollars a month.”