Learning about stocks, ETFs, and other investments

benjamin-davies-332625.jpgI’m obsessed with learning about stock market investing–so for my health and fitness readers, you can go ahead and skip this one. I’ll be back Sunday with my regular focus on veganism! But, since I can’t stop reading all I can about stocks, bonds, ETFs, index funds, options, and all the other brokerage jargon that is necessary to maintain a profitable portfolio, I’ve decided I just have to write about it.

Earning financial independence allows for greater freedom to pursue my other goals in life, which is I why I think it’s important to blog about. Investments can be a great place to grow wealth if you can stay smart and stick to a solid game plan.

It Starts with an Idea

Before anyone really gets into investing, I would first advise they read “Rich Dad, Poor Dad,” “The Millionaire Next Door,” and “A Random Walk Down Wall Street.” These books will lay a reliable foundation to build a money-making mindset that will ensure long-lasting wealth well into retirement.

My dream is to hold a portfolio that I can live off of, freelance for money and travel the world—this is obviously a far-fetched dream right now, but I can to develop a reliable plan that creates a small income from my investments. I don’t have much capital right now, but I’ve developed a budget that will gradually allocate money to my investment fund slowly but surely. Here are my goals and allocations.

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I’ve reviewed my finances, developed a budget and automated my investments; I just need to make sure I stick to my budget, stay up to date on the latest news and monitor my portfolios to ensure my stocks perform how I want. My first investment portfolio consists of my long stocks, the stocks I believe will grow in value over time, and that I know won’t be going away anytime soon.

Each month, I also move $50 into my second investment account through the Robinhood app. I call the money in this account my “Mad Money” because it’s used for risky investments. I’ll also use this account for educational purposes to learn how the market moves—I’ve only been investing for a short time so this app has been really helpful in allowing me to practice trading and monitoring the market. Robinhood allows for commission-free investing, making it super easy to get into investing in stocks, even with as little as $50. A whole ton of money obviously won’t be made with such a small investment, but it’s a good way to learn about market volatility.

Stocks that Pay Shareholders Annually

Despite what I’ve done with Robinhood thus far, I’ve been especially focused on learning about and choosing which long-hold stocks that I’ll keep in my portfolio. These are stocks I plan to keep for at least a minimum of at least a year. I’ve been looking into stocks that pay dividends, that is, those that pay their shareholders money annually (sometimes split into quarterly payments) depending on how many shares that person owns. Companies like Nike (NYSE: NKE), Microsoft (NASDAQ: MSFT) and Apple (NASDAQ: AAPL) pay their shareholders an annual dividend as an incentive to leave their money invested into the company rather than capitalizing on gains.

I recently finished listening to the audiobook for “A Beginner’s Guide to Investing” by Ivy Baytes and Alex Frey on audible, and it taught me great deal about the basics of investing. The book details the many options an investor has when choosing their investments. It doesn’t go quite into detail about any particular strategy, but it does offer beginning investors a way to get a quick rundown of the investments. I definitely see myself referencing the book later down the road to get a greater understanding of intricacies to trading stocks, such as taxation and options for retirement investing.

It’s a Start

I know this is a lot to take in, especially with all the jargon I’ve thrown into this post and considering my audience probably wasn’t expecting a post on finance; but, I’m telling you, it’s worth it. Learn to invest early and invest often, because those early investments can mature into a great sum of money. Just look at the last year’s market! My only advise would be to make sure to do your research!

Have you already started investing? What tips can you offer?

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