Many people have misconceptions about what it takes to get started in investing. First, you don't need to be either rich or an expert. You can teach yourself as you go, but you need to learn a few things before jumping in with your cash.
Consider Your Goals
Before diving into the details of alternative ways to make money, specifically how to make money by investing, you first need to think about your goals. This will be critical in deciding which investments to choose and how to go about the process. For example, if you want a secure retirement, your approach will be very different than if you're trying to make a lot of money in a short amount of time and you've got cash to burn. Of course, you might want to do both of these things, but you'll still need different strategies for each of them.
Know Yourself
Once you've thought about your goals, you need to consider what kind of an investor you want to be as well. Do you have a risk appetite? Do you want to be very hands-on, or do you want to park your money somewhere and forget about it? Are you good with numbers, charts, data, and detail? Consider your situation as well. Do you have money that you can afford to lose? How much time do you have to spend on learning your way around the world of investing? How old are you? Younger people may be better able to weather losses. Answering these questions will help you take the next steps.
Nail Down the Basics
Before you do anything else, you need to put some money toward an emergency fund and retirement. If you have a retirement plan at work, see if you can max out your contributions. If you don't have one, you may be able to set one up on your own. Find out your options, and choose a plan based on your retirement goals and tolerance for risk.
Look at Advanced Options
Your next step is to look at what else is there for you based on your goals and temperament. For example, maybe you want to be a day trader. You can review a day trading guide that gives you information on the best penny stocks to watch. This can be one way to start learning how to read and understand data you'll need to succeed without spending too much money.
On the other hand, if you aren't interested in day trading and you'd instead let someone else do the investing for you, you could look into a Robo-advisor. A Robo-advisor will create a portfolio for you based on your situation, and some offer educational tools if you'd like to learn more. Another option is investment apps. You could get one that rounds up your purchases and invests the difference or one that helps you create a portfolio yourself. If you are creating your portfolio, keep in mind that in many cases, the higher the potential return, the higher the risk.
