4 must-read to get you in the right direction
Investing is a fantastic world full of opportunities. However, it’s not something you learn much about at school. They don’t teach you what kind of options there are. Schools teach you about the risks quite briefly, which scares you and makes you want to avoid investing your hard-earned money, something like the stock market. Of course, there are a lot of risks associated with investing. Profit doesn’t come without risk. But the risk is manageable. That’s how you create the opportunity for continuous, steady profit.
I’ve worked as a personal trainer for more than 10 years. I got intrigued by the world of investing a few years back, but I didn’t possess any understanding of how it worked. There wasn’t anyone around me who could point in the right direction. I started the journey for knowledge on my own, but it would have definitely helped if there was a straight to the point ‘guide’. So here’s my take on writing such a guide. My goal is to help you start in the right direction, saving you some time on unnecessary and time-consuming detours.
Well, it’s quite apparent where most people start their journey, and that’s on Google. Maybe you even got here through Google’s search engine. But it’s not the place where you can get the most valuable and trustworthy information. There are many misleading articles about investing or people who ask you to pay a monthly subscription for their holy grail to investing. The problem is that there is no holy grail. Such a subscription is one of those time-consuming detours, which I think you are better off avoiding first.
Let’s go over some places where you get valuable information that you can use to invest wisely.
The books I highly recommend reading are:
- Think and Grow Rich by Napoleon Hill
Think and Grow Rich isn’t a book about investing, but rather about your capabilities. It’s an inspiring, motivational book that teaches you how to equip yourself to achieve what you desire mentally. He writes about the importance of a burning desire, faith, using affirmations to reach your goal, gaining knowledge, and the power of imagination. Think and Grow Rich is a book I recommend reading multiple times.
2. The Intelligent Investor by Benjamin Graham
Warren Buffet calls this the best book ever written on investing. Graham writes about the three principles of intelligent investing, namely: long-term analysis, cutting losses, and don’t go for irrational profits. Another critical aspect of his book is that the market shouldn’t cloud your judgment. Do your research and stick to a formula.
3. Rich Dad Poor Dad by Robert Kyosaki
Robert Kyosaki’s book opens your eyes to some key fundamentals of money management. You’ll learn to understand cashflows, building assets, and how to learn from your mistakes. He writes how money should work for you, not the other way around. If you want to achieve financial freedom, you should dive into financial literacy, take calculated risks, and learn to control your emotions.
4. Common Stocks and Uncommon Profits by Phillip A. Fisher
Fisher is known as one of the most influential investors of all time. His methods have had a significant influence on modern investing theories. In his book, he teaches investors to analyze a business’s quality and its ability to generate profits. The book centers around Fisher’s ’15 points’ to determine if it’s worth investing in a stock. He writes about his methods of gathering information, long-term perspective, and the importance of diversification.
Coursera is an educative platform that offers an enormous variety of courses. There also are a lot of courses that teach you about financial markets and investing. The User Interface is straightforward, and the courses aren’t expensive. A course usually needs you to study up to 2 to 3 hours per week and takes 2 to 4 months to complete on average. Maybe that sounds like a lot, but it’s worth it. You will increase your skills rapidly, and before you know it, you will put your knowledge to use. If your background isn’t finance-related and your understanding of the financial markets is negligible, then the course Financial Markets is a great starting point.
There are a lot of different brokers that offer a wide range of products you can trade. However, they do come at different prices. It’s essential that you first decide your strategy because choosing a broker depends on how active you will be. For instance, some brokers have an inactivity fee you have to pay if you’re not actively buying and selling. If you plan to buy and sell assets frequently (swing trading), you must pay attention to the transaction costs. The more active you are, the more expensive it can get if you choose the wrong broker.
DeGiro is by far the cheapest broker. The broker doesn’t have any inactivity fees, has the lowest transaction costs, and has no minimum deposit rate. Their UI is very friendly. Yet, don’t expect any advanced charting or a fantastic trading terminal. DeGiro is very basic.
If you’re looking for a more advanced broker, InteractiveBrokers is a good option. Although their interface seems complicated at first, the tools they provide are outstanding. InteractiveBrokers does have an inactivity fee, so if you plan to buy and hold, you may be better off with a different broker.
Although I didn’t have any prior knowledge about the financial markets, I managed to create a strong understanding of investing and trading. I still keep on developing my knowledge and skills. Each book refers to other books; the authors talk about other authors. Each new course guides you to the next one. You will enter an endless source of information. Once you made a start in the right direction, the rest will follow.
Thanks for reading, and feel free to reach out if you have some questions!