We always hear great stories of rags to riches. People investing their money, rather than simply just spending every penny. Investors use their money to acquire things that offer the potential for profitable returns, either through interest, income, or appreciation of value.
When managing money are always taught to devote your time and resources to the things with huge potential for returns. This could be investing in a startup or buying an existing business, going back to school, renovating a house, buying stocks and bonds etc.Thanks to Modern day technology, the investing world offers endless possibilities to anybody with a few bucks and Internet connection.
As a first time investor you need to understand that investing involves risk. In my opinion if you want to get into the world of investing you need to love doing research. Researching stocks and other ways to invest. Always Remember that research is PIVOTAL.
*Choosing your platform
First you need to find a platform you feel most comfortable with which to invest with.
Available platforms include:
•Full service brokers or financial advisors
•Direct mutual fund accounts
•Dividend reinvestment programs
Until you become a comfortable investor, I would recommend buying mutual funds or ETFs, either through an online broker or direct mutual fund account. For individual investments you can have a look at websites like www.momentum.co.za or www.investec.co.za
Investing for a goal you set for yourself like buying a home or starting a business, a regular brokerage account will do. Keep in mind that your capital gains (the money you earn when you sell a security for more than you paid for it) are taxable, as will certain dividends you receive.
My advice would be to stick with mutual funds or exchange trade funds (EFTs) rather than individual stocks and bonds until you more comfortable with investing. Funds enables you to invest in a broader portfolio of stocks and bonds in one transaction rather than trading them all yourself. Funds are not only safer investments, it’s often less expensive to invest with funds.
Visit sites like www.oldmutual.co.za when getting started.
Some final advice
My final advice to you would be to do your research thoroughly and don’t just depend on your broker to do everything for you. Be in the know how as they would say!