Everything You Could Want to Know About How to Invest Your Money

"I'm looking to get started with cryptocurrency or the stock market. I want to invest my money, but I don't know where to begin. How can I start investing my money"?"

I've been getting many messages like this lately. People are fed up with the pathetic interest rates offered on a savings account at the bank so they're looking at better investment options. This article is going to help you figure out how to invest your money.

I totally get why you're annoyed with your savings account and I want to show you how to invest your money so that you can make money from your money.

how to invest your money

"Where can I invest my money right now for the best returns?"

I get asked about how to invest your money wisely often. This makes sense because learning how to invest your money is one of the most popular topics in the personal finance space.

What are the best ways to invest your money right now? What do you need to know about investing before you get started?

What to do before you look for where to invest your money.

Before you jump into the investing world, you have to ensure that you know what you're getting into. I don't want you to lose your hard-earned money because you made a foolish mistake or because you were trying to get rich quickly based on the advice of a relative at a family function who always talks about hot stock picks.

Do this before investing your money so that you don't lose your money...

Take the time to research different investment strategies.

Before I started investing in real estate, all I did was read books and articles on the topic of real estate investing. You have to really immerse yourself in the subject if you're making a hefty investment so that you know what you're getting yourself into before parting with your savings.

You don't want to be confused about what you're doing with your money. It's essential that you understand why you're making an investment and how it works. The larger an investment, the more time that you should spend researching it.

How do you research an investment strategy?

  • Read 1-5 books on the topic so that you understand what's happening. You can learn a lot from those who have done what you want to do.
  • Speak to people in real life who are doing this. You have to find someone who's in a position that you want to be in. Then try to take them out for coffee or try to speak with them. Find a way to pick their brain to see why they've focused on this investment strategy.
  • Look up content online. There's so much content online about every topic. I've learned so much from YouTube videos and Twitter alone. It's so easy to learn about an investment strategy these days.

It's important that you understand what you're investing your money in. You work hard for your money so you don't want to lose it all because you were impatient or because you weren't sure about what you invested into.

(There's an obvious caveat here: you can invest your money into index funds or use a robo advisor with a company like Wealth Simple so that someone else invests for you or so that you're investments are simplified.)

Work on increasing your income.

To have more money to invest, you have to save more money. In order for you to save more money, you're going to have to make more money. To make more money, you have to increase your income.

This might sound simple, but this is where many people get stuck in the investing process.

Read up on increasing your income here, here, and here. I want you to make increasing your income a priority.

Now it's time to look at common investing mistakes that cause rookie investors to go broke when they look for different ways to invest your money. 


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how to invest your money wisely

What are common investing mistakes to avoid when looking for the best ways to invest your money?

Sometimes the best investment is the one that you don't make. Before you start looking into how to invest your money wisely it's important that you avoid common mistakes so that you don't go broke in the process because you were chasing some scheme that you didn't understand.

Investing Mistake #1: Taking advice from strangers without a proven track record.

There are so many "experts" when it comes to shilling out advice on where to invest your money. You're going to get advice from all angles. I'm just warning you that most people don't know what's going on. If they did, they wouldn't rant on Instagram about why you need to buy some coin or about how they could help you make passive income.

What should you consider when accepting investment advice?

  • What's the track record of this person?
  • Do you trust this person?
  • How long have they been doing this for?
  • Do you know anyone who has taken their advice?

It's critical that you don't let random people guide your investments because they think they know what's going to take off.

Investing Mistake #2: Risking everything on one investment.

I know that there are many articles out there about people who made it big by taking a chance. That's not how investing usually works in the real world. That's gambling in a casino or at the race track.

The trick is to focus on a few investments and to diversify your portfolio a little bit. You don't want to put your life savings on one investment because then you won't be able to sleep at night.

How much should you diversify? I hate to use percentages. I believe in putting a decent chunk of your savings into fairly safe investments since you may want to access your money in the near future and then putting some money into riskier investments. The percentages will depend on how much you have saved and how comfortable you are with investing.

Investing Mistake #3: Trying to get rich quick.

“Beware the investment activity that produces applause; the great moves are usually greeted by yawns.” -- Warren Buffett

Many rookie investors will try to get rich quick with investing. However, trying to get rich quickly is a guaranteed way to go broke. Stop looking at absurd success stories. Focus on trying to find an investment strategy that provides you with returns that you're satisfied with and risks that you can handle.

If you can avoid these mistakes as a rookie investor, you'll already be ahead of the game. Now it's time to start investing.

How can you start investing your money? Let's look at the best investments out there...


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How to invest your money wisely

Always invest in yourself first when look for where to invest your money.

The best investment will always be in yourself. You should always invest in yourself to increase your future income.

I know that this isn't the most exciting idea when you're looking to make money right away, but you have to maximize your skills and knowledge before you can start earning more.

I'll always start off an investing article or piece of advice with the idea of investing in yourself. You have to do whatever it takes to improve yourself and your situation first.

You can't improve the quality of your life if you don't work on yourself. You can't earn more if you don't continuously put money back into yourself.

The good news is that investing in yourself ties into everything else and the ROI is as high as you want it to be.

For example, when I want to learn about cryptocurrency, I reached out to friends in my network who were involved in this space. I offered to take them out to learn more on the topic. I had multiple friends offer to help me out and explain everything to me. The investment in myself and my network over the years has brought me to the point where I could do this.

How can you invest in yourself right now to make more money in the future?

  • Learn a new skill. Are there any skills that you could learn? Could you upgrade your current skills? Trying to learn a new skill is the quickest way to bring in more money in the future.
  • Take someone successful out for coffee or lunch. Some of the best advice comes from hanging out with people who have done what you want to do.
  • Anything that will help you become more productive. This covers a wide spectrum. It's important to feel and perform your best by having the right tools on your side.

Investing in yourself is all about doing whatever it takes to spend money today to improve your life tomorrow.

When I bought my first condo, I purchased the cheapest futon that I could find. Little did I know that I would suffer for years because of this. I couldn't get the decent sleep that I needed to be productive. What was the point of saving money on my bed?

What are the returns of investing in yourself?

You can't quantify every investment, but it's always worth investing in yourself. That course that you take this weekend or that dinner bill that you pick up can pay dividends in the future. You won't always see immediate results when you're investing in yourself.

For example, if you take the time to learn about graphic design, or coding, or any other skill that's in demand, you can eventually use this to bring in more money.

James Clear brought up the following point on learning and investing in yourself in Atomic Habits:

“Learning one new idea won’t make you a genius, but a commitment to lifelong learning can be transformative. Furthermore, each book you read not only teaches you something new but also opens up different ways of thinking about old ideas.”

The book also mentions this:

“Time magnifies the margin between success and failure. It will multiply whatever you feed it. Good habits make time your ally. Bad habits make time your enemy.”

Long story short: keep on investing in yourself.

Set up your retirement accounts.

We can't publish a guide on investing without discussing retirement and planning for life after work.

It's important that you do this as early as possible. I setup my retirement accounts when I was 17 because I knew that I didn't want to work forever (I didn't even want to work at that point). The longer you wait to start saving for retirement, the longer that you may have to work. I want you to do things today that your future self will thank you for.

It's crucial that you get time on your side when it comes to compound interest for your retirement planning.

How do you save for retirement?

  • Take advantage of employer contributions.
  • Put money away from every check towards retirement.
  • Invest your retirement savings in the stock market (more on this later).

We won't get too technical about retirement planning in this piece. The key message is to focus on saving for retirement by taking advantage of employer and government programs.

Invest your money in real estate.

Real estate has been my best investment and it can be the best investment that you make.

Real estate can also be a terrible investment depending on the market and your own personal situation.

Here's what you need to know about investing in real estate:

  • Your primary residence can't be viewed as an investment always.
  • You have to see if you're purchasing property in a desirable location.
  • You have to learn how to screen and manage tenants if you want to be a landlord.
  • Flipping a home isn't as easy as it sounds online.
  • There are different ways to invest in real estate. You can buy a rental, try to flip houses, or hope that your home appreciates.

How do you invest in real estate?

There are different ways to invest in real estate. You can buy a rental property, try house flipping, or just wait for the value of your residence to go up enough.

Here's how you can invest in real estate:

  1. Save up for your downpayment.
  2. Look up places to purchase in an emerging market.
  3. Decide what kind of real estate investment you want to make.
  4. Apply for a mortgage.
  5. Look for the ideal piece of property.
  6. Make and offer and go through the property closing.

How can you make money with real estate?

  • Wait for the value of the home to appreciate. This will depend on the housing market where you invest.
  • Flip houses. The goal here is to fix the place up and then flip it at a profit.
  • Rent out your place and be a landlord. You can always be a unit for the strict purpose of renting it out.
  • Use Airbnb to host your place. I've done this in the past and it has paid off. If you live in a popular area, you can make some real money by listing on Airbnb.

There's a lot more that goes into real estate investing. This was just a brief summary to get you thinking about the options out there.

My best investment return so far has come from real estate. The next best investment has been...

Invest your money in the stock market.

Many people want to get into the stock market but they're too intimidated to do so. Investing in stocks isn't anything like, "The Wolf of Wall Street." You're not going to be pitching penny stocks and it won't be that exciting 99% of the time.

You can invest in index funds or pick a few companies that you believe will grow to purchase shares in as a stock market investor. You could simply automatically put money from your paycheck into index funds every payday.

What should you know about investing in the stock market?

  • You want to research the company that you're buying shares of.
  • You don't want to risk all of your money on one stock.
  • Index funds might be the way to go.
  • You shouldn't chase "get rich quick" schemes based on stock predictions from random people on social media.

How can you invest in stocks to make money from the stock market? 

  1. Look for stock appreciation. The goal here is to purchase shares of a company that you think will go up in value. The goal is for the stock to go up so that you can buy low and then sell high. I personally am a fan of stocks in the technology sector since I know this space.
  2. Dividend stocks. There are companies that pay out dividends to shareholders. The goal is to accumulate enough shares so that you can get decent returns from your dividend payments.
  3. Index funds/mutual funds. This is where most people will invest their money in the stock market. This is the safest and easiest option.

What's an index fund? According to Investopedia, here's what an index fund is all about:

"An index fund is a portfolio of stocks or bonds designed to mimic the composition and performance of a financial market index. Index funds seek to match the risk and return of the market, on the theory that in the long term, the market will outperform any single investment."

Check out our previous posts on investing in the stock market and the basics of the stock market so that you know what you're getting into.

Invest in cryptocurrency.

Have you thought about investing in cryptocurrency? Are you curious about cryptocurrency?

This is an investing strategy that simply can't be ignored. Many new investors are looking at getting into cryptocurrency to make some quick money. Others have been investing in cryptocurrency for a few years now and see it as the future of money.

We explained what cryptocurrency is all about and discussed what to consider before investing in cryptocurrency.

Here's what I want you to know about investing in cryptocurrency:

  1. The crypto market is volatile.
  2. FOMO is real in this space.
  3. You're going to experience many dips.
  4. There can be exceptional gains in the cryptocurrency investing world compared to anything else.
  5. There are many scams in the cryptocurrency investing space and it's easy to get caught up in some scheme.

I've only been involved in this space for just less than a year now and it has been an exciting experiment. You can read up on cryptocurrency here and here.

How do you make money from investing in cryptocurrency?

  • Buy low and sell high. Many cryptocurrency investors try to buy when the coin is down and then sell it when it goes up.
  • Look for new coins. There are new coins popping up constantly in this space. The goal is to invest in a coin that you think is going to go up in value (hence the craze about Dogecoin or Shiba Inu).

The major caveat here is that there are many new coins coming and going. You have to watch out so that you don't get caught up in some "pump and dump" scheme where you lose all of your money with cryptocurrency.

I would also be cautious of the highlight reel that you see online when it comes to cryptocurrency investing. There's even a story of someone turning $8,000 into over $5 Billion with Shiba Inu!

I put a small portion of my savings into cryptocurrency. It's something that you can't ignore. It's also an investment that's far too risky to go all in on.


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How to invest your money

 

How should you start investing your money right now?

It's time to start investing your money. If you're still looking for the best ways to invest your money wisely, I just want you to start with one idea mentioned in this article.

As you can tell by now, there's no one-size-fits-all answer when it comes to investing your money because it all depends on your level of savings and your risk tolerance.

The simplest way to get started is to invest what you have so that you can bring in more money. I personally kept on investing in myself and the stock market until I had enough money to make a downpayment on a condo. Then I put a majority of my savings (very risky) into this condo project. I eventually sold my first rental property and then invested the money back into a mix of real estate and stocks.

There are people who swear by dividend stocks. Some investors are all about index funds and safe investment strategies. Then you have folks who are all in on investing in cryptocurrency.

Here's the simplest formula to follow when it comes to investing money:

  • Focus on saving up so that you have money to invest.
  • Keep on trying to increase your income.
  • Save some more money.
  • Research investment strategies.
  • Decide on one investment.
  • Then make another investment when you start saving more money.
  • Assess your investments and adjust accordingly.
  • Be patient.

Are you ready to start investing your money? Start investing today and try to ignore the absurd success stories on social media.

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