Investing isn’t easy.
Finance professionals love to use overly complicated acronyms and words such as EBITDA or discounted cash flow (DCF) to make investing seem like only a select few can understand it.
But, like anything, investing can be easy when broken down into simple parts. Also, there is now an abundance of resources available to better understand investing and finance.
We’ve teamed up with Fantasy Invest to showcase some of the best resources and applications available to investors.
The infographic below gives beginners, and experienced investors, many options of instruments that can help increase their investing knowledge and get them one step closer to financial independence.
Picking a broker
The first step to gaining financial freedom is realizing that your paycheck alone isn’t enough.
You need to make your money work for you; a savings account won’t cut it anymore. The money you keep in a savings account, while essential in case of emergencies or important purchases, loses value when adjusted for inflation.
Instead, you need to invest your money, and the simplest way to do so is with stocks.
The first step is picking a broker to use for your investments. There are so many out there and each has its own advantages and disadvantages.
As many issues as Robinhood has, it is a go-to platform for many new investors. I would recommend Robinhood as a way to get started on your investing journey; I personally have many friends who used Robinhood when they first started investing.
But after gaining experience, it’s worth looking into other brokers. Robinhood may have a great user experience for beginners, but it lacks other important aspects that larger brokers offer.
Learning the stock market
Once settled on a broker, the next investing step is to finally buy some stock. Hedge funds and investment banks come up with super complicated valuations to predict how a stock will do. But most of that is superfluous — an ordinary individual investor can do just fine picking stocks on their own.
Luckily, for those that want some practice before risking their hard-earned money, there are resources for such.
TD Ameritrade offers a great simulation program that is very similar to real investing. The platform they offer, called thinkorswim, can help investors gain confidence.
At my college, all business majors were required to take a finance class where we created a mock portfolio in thinkorswim for the semester. It was an experience that helped me better understand the investing landscape.
Fantasy Invest is another, more entertaining way to grasp stock market basics. This app provides a risk-free, simulation of the real market, but through games. A risk-free simulation is the best way to understand the market and gain confidence. It will help you become an investing expert in no time.
They also have an abundance of resources available, for stocks and cryptocurrencies.
Setting a budget
As important as it is to make money, the amount of money you spend may be more important.
If you make $100 but then spend it all, you have nothing left to invest. The same theory applies if you make $1,000,000 and spend it all. Either way, you are left with nothing to invest and grow for the future.
That’s why it’s extremely important to understand how you’re spending your money. There are plenty of apps that help you track and budget your money, all with their own benefits.
Pocketguard is a great resource because it connects and gives you a snapshot of all your accounts. It also lets you categories your expenses. For extra fun, PocketGuard lets you export transactions so you can play with the data in your own spreadsheets.
Digit is another platform, one that does most of the work for you. Digit uses machine learning and financial best practices to calculate smart amounts to save and invest each day. It’s like an invisible, guiding hand with your best financial interests at heart.
Final thoughts
The first step in anything isn’t easy. But there is an abundance of resources available so that anyone can take control of their financial situation. The goal isn’t to become a millionaire overnight, but steady growth over time for a better future.
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