Low Cost Investments for Beginners

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The number one thing to do if you want to learn how to invest is to begin at a slow pace. Investing just a small amount of money when you have not quite fully learned the ropes is an intelligent idea. It allows you to gain knowledge as you go along and possibly make money without risking losing your life savings over an error.

These investments are a good start due to their relative simplicity and ease of entry:

  1. Stocks.
    If you are a beginning investor, invest in safe stocks that have enabled other investors to achieve positive results over long periods. Of course, the appreciation of the stock will not escalate overnight, but it is not likely to plummet overnight as well.

    • Typically, “safe” stocks are associated with longstanding companies that sell common products consumers purchase on a daily basis in spite of a poor economic environment. Examples of these types of companies include businesses that manufacture items you use on a regular basis such as cereal, toothpaste, soap, deodorant, dishwashing liquid, and laundry detergent.
    • When selecting a hot stock, the chances of earning money fast are much higher, but the stock can drop in value just as quickly. However, you can make money if you rapidly purchase low, and then sell at a high price.
    • Go with an online broker because for a low start-up fee, usually under $10, you can use the members area where you can find tools, advice, and buying power to get you buying and trading successfully. Some example companies are www.etrade.com and www.optionshouse.com.
  2. Certificates of Deposit or CDs.
    When you open up a CD, you do not risk losing your principal, but you may not receive a very high interest rate. Depending on the CD you buy, it will keep your money for six months, a year, three years, or five years, so count on your money being unavailable for that term.

    • Basically, when you open a CD, you are lending the bank your money. In return for this, you get a relatively low rate of interest.
    • Old pros in the investment world like to keep three CDs going at once: a one-year, a two-year, and a three-year CD at any given time. Once the initial CD reaches maturity, the investor can take out all of the money while still owning two other CDs that are earning higher interest rates.
    • Initial CD costs vary and are related to how much you can invest. You can find a CD that only requires an initial $500 deposit and a CD that requires a $10,000 minimum.
  3. Things You Need to Know about Investing in Mutual Funds.
    While you are the sole investor (and recipient of earnings) in most investments, a mutual fund is made up of the contributions of thousands of investors blended into a single investment. The collective or “mutual” nature of this investment is how the mutual fund got its name.

    • Compared to investments whose earnings belong exclusively to you, a mutual fund is owned by thousands of investors who all put forth their own resources together; therefore, it is mutual.
    • It doesn’t take a lot of money to buy into a mutual fund; it’s possible to start with as little as $1,000 or even $500. Some funds allow a monthly deposit of as low as $25.

It is fairly obvious that investing in the stock market can turn into a profitable adventure. Even though you may not yet be at the point that enables you to purchase a new home, at least you have started the process. By making use of the investments methods mentioned above, you will be off to a fabulous start.

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Exceptional People Magazine is where self empowerment, hope and inspiration happen. I’m Monica Davis the founder of Exceptional People Magazine and my mission is to enhance the quality of life of all people by promoting goodwill, unity and better living through positive media. Through this magazine you will be inspired to reach new heights.

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