5 tips to start investing in stock
Investing in stock is not something I thought I would learn and do, but I’m doing it. Since October of 2022 I am working as a freelancer. In that month I was offered an interim job at Rijkswaterstaat, a government organization in the Netherlands, and I took it. And with becoming a freelancer came a lot of new things to learn. Like insurances, hourly rates, book keeping, taxes and pension. I hadn’t thought about my pension much before this time, but I had to now, because now I was my own boss. Up until that moment I’d only had a savings account. When looking into smarter ways to handle my money I started reading and learning about investing in stock. If you’re considering doing this here are 5 tips that will help you.
You don’t need a lot of money
I always thought I needed a lot of money to invest, but this is a common misconception. You can start with just 50 euros per month. Look at your earnings and what you spend in a month to determine what percentage you can invest. Any amount is okay.
Set a goal
We’re talking about your money and your future. Two things that you should take seriously. So before you do anything, consider what you would like in the future. Thinking about what you would like to achieve in what amount of time helps you determine what to do with your money. For me, building a pension is my first goal. I also decided I would like to create a second income stream for myself. When you set your goals, make sure you specify them. What do you want to achieve and by when?
Analyze
Once you know you’re going to invest in stock there is a world of options. Decide what companies (or ETFs) you’re interested in and analyze them. Do not make quick decisions because people told you it’s a solid investment. Do your own research first by reading about the company, looking into their past performance and what analysts are saying about future growth. Also, understanding their business model is important. How do they make money?
Spread your investments
When building a pension and being smart with your money I learned that you shouldn’t put all your eggs in one basket. The same goes for investing in stock. Spread your investments by not buying stock from only one company. Make sure you invest in stocks from companies in different industries.
Just do it
For me this was a challenge, mainly because I tend to over analyze. Buying an ETF wasn’t that big of a deal for me, but a share in a company was. So I spent a lot of time analyzing companies and stock prices. At one point I got over myself and bought my first stock. The market is never going to be perfect. There is now and now is the perfect time to start investing in stock.
