Investing Ideas: A Beginner’s Guide to Financial Freedom: 4 Basic Steps to Start Your Investing Journey

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A generational money myth that is still very much ingrained today: Saving leads to wealth creation and financial freedom.

While saving achieves both, smart investing makes the concept of wealth creation and, therefore, financial freedom more accessible. Never depend on just one source of income. Invest to create a second source.

Investment apprehensions are not uncommon: it boils down to financial loss as opposed to financial gain.



Losing your hard earned money is not an easy thing to deal with and would eventually lead the person to put their money in an FDIC insured bank account. However, here’s the catch – the low interest rates offered by savings accounts can’t keep pace with ever-increasing inflation.

This means that the purchasing power of money decreases as one saves, which guarantees a loss of value.

On the other hand, making informed decisions and betting your investments in the right places can – reduce the risk factor, increase the reward factor and generate significant long-term results.

Savings are an indispensable part of the financial toolbox, providing the imperative capital to invest: at a minimum level, investing helps keep pace with the rising cost of living expenses created by inflation; at a maximum level, long-term investing opens up the possibility of compounding interest.

Since every investor decisively enters the market due to a unique circumstance, you don’t have to be a market expert to start investing.

In addition, the investor must analyze his personal investment objectives. – An investor who is looking to generate a second income by investing or amass a fortune large enough to retire will make very different investment choices than an investor who is simply looking to earn a little interest to help offset inflation and protect his/her purchasing power.

1) START SMALL, SET YOURSELF A SUITABLE BUDGET:

Understanding his/her financial expenses and being realistic about an investor’s expenses determines how much he/she spends on his/her investment strategy: how much can one regularly contribute to his/her account; when you open your account and the securities in which you invest.

Despite other significant financial obligations, the investor should never underestimate the power of starting small and working towards establishing an appropriate budget.

By the way, while it is wise to pay off any high-interest debt before investing large sums of money, this does not mean that the investor cannot start investing at all.

2) DETERMINE THE TYPE OF INVESTOR YOU ARE:
The longer the time horizon, the more the investor may be able to take in overtime whereas, if the investor is more of a set and forget type of person, they may be more inclined to invest in funds that give exposure to multiple holdings. instead of buying individual stocks, bonds or other assets.

3) OPEN AN ACCOUNT, START INVESTING:

As a novice investor, one can start with as little or as much money as one would be safe to set aside, even small amounts of money, invested at a steady pace that suits the investor, can lead to a large portfolio balance over time – the investor should not worry too much about his opening deposit, but remember and try to add funds to his account regularly.

4) KEEP A CONSTANT CONTROL OVER INVESTMENTS:

Like anything that requires regular maintenance, the investor should always check their investment portfolio regularly – set a constant reminder to review their investments.

Ultimately, investing is a skill, both an art and a science – a practice that every investor engages in and employs with the goal of becoming financially self-sufficient.

Whether the investor becomes a market magician or any other average investor, with time and dedicated investment planning, the investor will have the freedom to pursue their dreams and achieve financial independence.

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