FAQ's Of Investing?
How much money can you make from investing?
You can make a lot of money in stocks, but you can also lose money too. If you buy the right businesses and invest every month over at least ten years or more it’s highly likely you will make a profit.
Fun fact: If you invest for a day in the VTI (Vanguard Total Stock Market Index) you are 52% likely to make a profit. If you invest for 10 years that number goes up to 97.8%.
Fortunes are made in the stock market and it’s hugely important to do your research before parting with any hard-earned cash. If you don’t have the time or the drive to do this then speak to a trusted financial professional who will be able to make those choices for you.
How do I limit my losses?
Time in the market not timing the market. If you’ve bought a great business, you can ride out most downturns in the market by adopting a buy and hold strategy.
If you’re more experienced you can also look to hedge your portfolio which means you buy assets that profit when the market goes down.
You can also use a stop loss. A stop-loss can be set below the price that you’ve bought it for so if the stock drops to this price your broker will sell this investment for you limiting loss.
We don’t suggest using a stop loss if you’re investing for the long term as you might automatically sell a great business for a loss and in 2-3 months it could be flying high again, but we see the benefits for the short term or more speculative investments.
How much do I need to start investing?
We suggest starting with an amount that you’re comfortable sticking too each month. It’s so important to have a budget and do your best to stick to it. This creates habit and investing the same amount into your stock account each month even if you don’t buy is one small step towards financial freedom each time.
You can invest for as little as £1 in some place but we suggest using our ‘live a little strategy’ which is a technique that gets you up to 30% of your monthly salary.
Each person is unique and you might not have that much to get started, but if you follow the steps in our new book ‘How to go About Investing Money’, you’ll get there!
You can also check out our top 10 financial freedom books.
What are the best free resources available?
There are tonnes of fantastic tools to get your started on the web. We suggest reading as much of the investing for beginners section to get yourself started and then move onto to the invest section of the blog.
If you’re like us we prefer to learn through audio and podcast are a fantastic ways to pick up tips, tricks and the latest on Wall Street. The beauty of podcasts is you can turn your morning commute or workout into self development time.
These are some of our favourite investing podcasts:
- The Motley Fool Money Radio Show
- OPTO Invest
- Panic with Friends by Howard Linzon
- Digest and Invest by eToro employees Sam North & Josh Gilbert
- The Prosperity Project by Jenifer and Mark Kempson
Do I need a qualification to invest?
You don’t need any investment qualifications to become an investor. We do however taking some investing for beginners UK courses and making use of YouTube videos to learn phrases, tactics or strategies.
We find that comes down to a personal mindset. How much do you want to learn? Those who learn more are likely but not guaranteed to make more money than others who don’t.
How much should I keep in my saving accounts vs investment accounts?
We suggest keeping an emergency fund of at least 3-6 months of pay in a high yielding savings account. This will help you if for whatever reason disaster strikes. We like to top up our emergency fund once a year by 2-3% of the total amount to counter inflation.
The rest, however, should be invested. It’s really that simple. You should be looking to invest as much as you can for as long as you can.
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Disclaimer: Content on this page is for informational purposes and does not constitute financial advice. Always do your own research before making a financially related decision.
