Investing is something everyone should do if they want some financial security in their future, but more than half of Americans never invest at all. As a result, when they finally get to retirement age, they end up dependent on government social programs, the generosity of others, and their own earning power.
Meanwhile, those who have savings but are unable to work are unlikely to have enough savings to last very long. Even so, many people refuse to invest — usually because people are intimidated by the idea. They shouldn’t be.
In fact, almost anyone can go from being afraid of investing to having fun doing it in just three quick steps. Here’s how:
Learn About Investing. People who are intimidated by the notion of investing suffer from a fear of the unknown. They may understand that you have to spend cash on stocks, and will earn more only if they do well — but they also believe making the right moves are outside the realm of their capabilities. Most convince themselves that they can’t get ahead because they aren’t a “financial genius.” And while its true that it’s impossible to be smart investor without financial knowledge, it’s not true that you cant learn. All it takes is a good book or two on basic investment principles, and maybe a little additional Internet research to answer most questions people have about investing. Then, once you have a basic understanding of fundamental investing ideas, youll be able to articulate other questions and figure out how to find the answers to them.
Make Your First Investment. After you’ve learned about investing, its time to step out and put your money to work. By now you will have picked out some smart investments like forex trading, mutual funds, ETFs, or real estate — and discover the thrill of finally sinking some money into real investments. Then its a waiting game — and it goes without saying that you’ll be very interested to see how your well-researched investments perform.
Reap Your Rewards! This is where the fun really starts. If you’ve made wise investments from the start, you’ll begin seeing positive returns, which represent the rewards you earn for all of your careful research. And those rewards will encourage you to earn more — which will drive to become even more knowledgeable about investing.
As you can see, if you aren’t having fun, it’s hard to become a good investor. Just remember this: In order to have fun, you’ve got to make a commitment to educate yourself about the process first.
Photo Credit: 401(K) 2013