Investing is a great way to grow your wealth and gain financial freedom. It’s also something that just about anybody can do. But how do you do it? And how to learn about investing?
Whether it be through a 401(k), pension plan, Roth IRA, or something else, most people will invest their money at some point in their lifetime. Even buying a house can be considered investing — it’s an asset that will go up in value over time.
Since you’re almost certainly going to invest in your lifetime, it’s best you learn about it. Whether you want to be a very involved investor that’s consistently looking for new companies/assets/markets to invest in — or just someone looking to get the most out of your retirement, learning to invest drastically increases your chances of making it happen, and growing wealth.
Additionally, you will be able to save countless dollars by learning financial concepts and investment strategies on your own — rather than paying someone a percentage of your yearly earnings in order to explain them.
So, to start learning about investing, read this article. We will discuss some fundamental principles that every investor must know before investing, as well as direct you to more resources to learn about investing.
Can Anyone Learn About Investing?
Anyone can learn about investing; it’s just a matter of taking the time to read and learn about it. There’s a common misconception that investing is a very difficult and complicated subject best left to financial advisors and investment professionals. However, that’s not entirely true.
Just about anyone from any demographic can learn about investing and become very knowledgeable on the subject. In today’s world, there are resources available for all different price points (many of them free) in all different languages.
Is It Hard to Learn About Investing?
While it’s correct that there are a lot of intricacies involved in the stock market, real estate market, and other investments, the basic principles are all that most people really need to know to get started and make money.
It’s not all that hard to pick investments that will get you just as good or better a return than the S&P 500 and build enough compound interest to make you wealthy.
In this article, we’ll cover many very easy ways to learn about investing and become familiar with the terms and concepts that those confusing stock analysts are always talking about.
How Long Does It Take to Learn About Investing?
Learning about investing can take however long you want it to. If you have a lot of time to dedicate to the subject, you can learn about it very quickly.
For most people, dedicating thirty minutes to an hour per day to reading about investing is the best way to build knowledge on the subject. Within a month of this, you should know far more about investing than the average person.
If you want to make it a long-term habit, you can also learn about related financial topics such as tax strategies to help you retain more of your earnings.
Many of the world’s greatest investors such as Warren Buffett and Ray Dalio have dedicated thousands of hours to writing down their knowledge to share with people like you. By picking up Ray Dalio’s books, or Warren Buffett’s letters you’re getting a free lesson from the world’s best.
Like with anything in life, to learn about investing you must first start with the basics. While it might seem like a lot to learn at first, over time you will repeatedly think about these topics and apply them to where they become second nature.
Investing often seems like an intimidating topic to people who aren’t familiar with it. But it’s generally not very complicated, it’s just unknown and new.
First, you want to begin thinking about what kind of investor you are. What are your investing goals? How much risk do you think you’re willing to take? What kind of investments are you interested in? How often would you like to check in on and adjust your investments?
These are questions you’ll want to consider and answer. It’s okay if you’re not quite sure right now, as you learn and gain experience with investing those answers will become much more clear.
The Most Common Types of Investments
To help you answer the question about what kind of investments you’re interested in, we’re going to cover several of the most common types of investments.
Investing for retirement is one of the most common ways that ordinary, everyday people invest and build wealth. Retirement investing is generally based on low-risk, diversified investments for the long term.
The aim is to slowly build wealth over time and end up with enough for a comfortable retirement when the time comes. It’s usually a very passive investment strategy that doesn’t require constant consideration and changes in investments.
The most common way to invest for retirement is in a specific investment retirement account. These often offer additional benefits such as employer contributions or tax incentives.
The most common types of retirement investment accounts are:
- Pension plans
- IRA plans such as Roth IRA
- Index funds
- Mutual funds
To learn about retirement investing, you can consult with your employer, a financial advisor, or an investment firm, or learn about it on your own. There are many courses, books, and free online resources that can help you learn about retirement investing.
In the age of the internet, anyone can truly learn just about anything. We’re in the so-called “information age” for a reason; in the blink of an eye, you can learn about investing from a man across the world who has dedicated his life to it.
You’ll want to look up learning resources about dividends, compound interest, emotional control in investing, real estate, and more. Additionally, you’ll want to read up on the differences between the types of investment accounts above. They each have their own pros and cons to consider.
Real Estate Investing
Real estate investing is an extremely easy and understandable way to build wealth. Many people believe that you need a ton of money and luck to succeed in the real estate market, although that’s not true.
For example, you can put a down payment on a cheap house anywhere in the country, pull out a mortgage on it, and then rent it out. Let’s say your mortgage payment is $1,200 per month and you rent it out for $1,500 per month.
You can now pay your mortgage payment for free, build equity in your home, and rake in $300 per month in the process! The sooner you get started, the sooner you build wealth.
So enroll in a real estate investing course or buy some books to learn the basics. If you’re still afraid to get started, you can consult with an investment specialist that will help you plan for all contingencies for a small fee.
Investing in Stocks and Bonds
As opposed to investing in a retirement account, you can choose to invest in ways that allow you far more liquidity and the ability to sell, instead of real estate which is an illiquid investment.
Investing in stocks and bonds on your own is also less likely to include the help of an investment advisor of some sort. Many people who become knowledgeable about stocks and bonds choose to invest through a broker directly with no help.
Whereas retirement accounts are more likely to be invested in a fund or combination of stocks.
To learn about investing in stocks and bonds, read books recommended or written by famous investors, hedge fund managers, and other investment professionals, or consult with a local investment firm that has gotten significant returns for its clients.
By “investing” a little of your time into your knowledge of the stock market through courses or other info products, you can learn a lot about it and save yourself countless headaches throughout your journey.
The Best Ways to Learning About Investing
Now, you need to know where to learn about investing. We can guide you in the right direction, but there’s only so much you can learn from one blog post. To get truly comfortable and confident with investing, you’ll need to put some time into it.
Here are six of the best ways to learn about investing:
1. Learn the Investing Lingo
If you’re someone that doesn’t know much about investing but has heard people talk about it, you might know that there is some terminology specific to investing. Many of the terms used are borrowed from something like mathematics or statistics but aren’t commonly used in everyday life.
Truth be told, the well of investment knowledge runs pretty deep. That being said, you can learn the vast majority of the lingo and understand what stock analysts are talking about in a fairly short amount of time.
First, look up some articles or guides on basic investing terms. You can also read books, watch videos, or take a structured course on a website like Udemy or Skillshare.
In the old days, you’d have to ask a knowledgeable friend or consult a dictionary when you didn’t understand an investing term in a book. Now all you need to do is say “Hey Siri.”
The truth is, while it may seem very overwhelming to learn about the concepts of the stock market and its terminology, you can learn about it easier and in less time than anyone else did until 20 years ago.
So, the next time you hear or read a term like “Monte Carlo simulation” or “P/E ratio,” take the time to look it up and take note of what it means. It might be explained using terms you don’t understand — so look them up too.
While you may feel like you’ll be stuck in a neverending state of confusion, you will in fact gain a well-rounded understanding of investing very quickly this way.
2. Read Investing Articles
There are a ton of investment magazines with high-quality information in them regarding investing. They have columns about current events, retirement advice, answers to reader-asked questions, and more.
Furthermore, they often come out weekly — giving you a consistent way to keep up on your financial literacy. It can be something you look forward to. Each Sunday, you can relax and read an investing magazine such as Barron’s or Kiplinger’s for an hour or two.
Over time, your knowledge on the subject of investing will become greater than that of the vast majority of the population.
The greatest thing about financial magazines is that they give you current events through the lens of a financial perspective. They give you a way to subtly learn about investing without it feeling like studying.
3. Follow Personal Finance Websites
While you’re looking up terminology and questions in your investment journey, you’re certain to stumble upon certain websites that offer financial and investment information.
By exploring these websites and their guides, you can access innumerable resources to help you along the way.
In all honesty, many of these websites have so much information that you could learn all or nearly all of the basics just from them. However, they also have more advanced information, such as financial ratios and simulations so you will never run out of things to learn.
4. Read Investment Books
Reading investment books is one of the oldest and most proven ways to learn about investing. Because of their long-form nature, they make it easy to learn in-depth about a particular topic or subject.
You can get a whole book explaining how to read and understand financial reports, for example. Thus, you’ll get a much deeper and more well-rounded understanding of it than you would most anywhere else.
Since you don’t have to constantly search up the next question — or figure out what the next question is, you can deep dive into a subject much faster. Additionally, you allow the author to fully explain his points without figuring out which “tedious” parts he needs to cut out to get more clicks on the web.
If you buy the book, you can also revisit that material sometimes if you need a refresher. It’s always helpful to highlight sections of the book that you find particularly important or you want to learn more about. By highlighting and writing notes in the margins, you also drastically increase your reading comprehension.
When looking for good investment books, do your research on the web, read reviews, pick books that are beginner-friendly at first, and make sure they’re written by credible authors.
Here are some of the options we recommend:
- Fundamental Analysis Books
- Peter Lynch Books
- Financial Literacy Books
- Best Books About Saving Money
- Best Passive Income Books
5. Take an Online Investing Course
If you want a long-form alternative to books, online courses are also a great way to learn. Since they’re more interactive, they can help you retain the information better.
They can also be more appealing to different types of learners — such as kinetic learners (those that learn by doing) or visual learners.
They also have a very wide selection of courses. The online course market may seem shady to some, but it’s had years and years to refine itself. The best online courses rise to the top and gain thousands of five-star reviews. Start there if you’re unsure.
Since you can often get them for so cheap, their return on investment can be incredible.
Many times they will have videos, questions and problems to solve, diagrams and visual resources, and more. Websites like Udemy or Coursera are nearly always having sales on their courses — many times up to 95% off.
Look for courses that have great reviews and try them out. For your first one, you can try a course that’s on sale; and spend $10 on it rather than $200.
The ultimate, tried and true way of learning to invest is by… investing! While the above resources can all greatly help you understand the ins and outs of the stock market, the only real way to know how you’ll perform is to invest.
You can read about “emotional control” in books all you want, but until you see your favorite stock’s value gets cut in half and you lose half your money, you’ll never truly know the panic you feel at that moment. To learn something, you need to practice — and investing is no different in this regard.
You can read about how to ride a bicycle all day, but until you hop and pedal, you’ll never be able to ride it. While you can certainly learn more about investing by reading than you can ride a bike, practice is still the most important part of your learning.
Start small if you’re going at it alone, then gradually build up as your confidence grows. Over time, you’ll become one of those knowledgeable investment guys that you used to be intimidated by!