Passion Hustles

5 Ways on How to Invest Your Money for Beginners

5 Ways on How to Invest Your Money for Beginners

Welcome to this stage of finally having enough money to invest! If you’re just starting and figuring out where and how to invest your money, you are in the right place.

Most books will define life’s basic necessities are food, clothing, and shelter. This is living on a day to day basis, given that you have a monthly income. If you have enough money, then there’s education, transportation, eating out, traveling, and the list goes on and on.

Not a lot of people would think about how to save money, let alone how to invest your money. But what does investing means?

Investing is putting your money to work for you!

You can have a lot income streams from passive to active. Investing falls onto the passive income category, or income that does not need a lot of monitoring from your end, but will just multiply on its own. An example of passive income is renting out apartments.

Investing is making money while you sleep – that’s the easiest definition of investing.

But it is also good to know that investing comes with risks. As Eric Tyson said, “There are three certainties in this world: death, taxes and being confused and ignorant about saving”.

Unfortunately, people who blindly invest their money exist.

And that was me before! I learned a lot of very expensive lessons because I invested my money in the wrong places.

It can happen to you too, but sometimes, that’s just how we learn. As long as you don’t make the same mistake twice, you’ll be safe.

Before investing your money, ask the following questions to yourself first:

  1. Is my emergency fund covered? If not, then you shouldn’t be thinking about investing first. An emergency fund is another necessity that is often overlooked. Read here to know how to save more money for your emergency fund.
  2. Do I have insurance in case I get sick in this venture? Am I going to be covered? How about my family?
  3. What are my investment choices?
  4. What is my appetite for risk? Should I invest a big amount of money right away?
  5. When do I expect my money back?
  6. Do I have the time to study my investments? How many hours in a day can I allocate?

Investment apps, investment advisors, stocks, black and green graphs, etc. – they’re all very intimidating for me. I was busy with my full-time job and I didn’t think my brain could wrap around these terms.

When you are not sure where to start, start with what you know!

There are so many investment choices nowadays – everything seemed to promise a good return. Tip: If someone’s offering you 2x or 3x your money in a month or so, that’s probably a scam!

Different Ways on How to Invest Your Money

1. Starting a Business.

How’s your appetite for starting a business? Even if it’s only going to be a small business like my publishing company, 8Letters, your company needs to do well to survive.

This includes developing products and services that customer will purchase, dealing with competition, managing the accounts, and keeping up with the trends.

You don’t need to have an MBA in starting a business, but it is important to have a good entrepreneurial IQ.

2. Investing in Real Estate.

The biggest advantage of investing in real estate is that it appreciates. Yearly, the value goes up which means if you buy a house now for USD 100,000, give it fifty years, and it may cost double the price later.

Real estate is about location. Before buying a house, make sure that it is in a good location, accessible and safe. These are some factors that can influence the price of your house.

You can rent the house or apartment out and earn a monthly income. Another option is flipping the property, do some renovations and then sell it for a higher price.

3. Lending your money.

Lending your money and earning interest from another way on how to invest your money. Of course, the best thing is you’re paid all the amount plus interest.

However, this has several drawbacks such as not getting what you were promised.

According to Pacific Private Money INC, a lending business is most successful when you focus locally. The loans should be within a hundred miles from your office.

4. Putting your money in Mutual Funds.

Companies in Hong Kong would take 5% of my monthly profit and put them on mutual funds. That’s how Hong Kongers save their money which they can only withdraw when they are sixty or when they decide to migrate from the country.

Mutual funds is a company that pools money from investors to buy stocks, bonds and short-term debt – a company that managed a portfolio of investment for you! This one’s good and easy if you are lazy in studying how to invest your money.

5. Investing in Stocks.

This is the most common investment options. Purchasing stock from companies means you share the company’s profits (and loss). You have to focus on the long term, so try not to check how they’re doing several times in a day.

I got friends who own stocks in Jollibee, Philippines – one of the fastest-growing fast-food chains from the Philippines to the world. With the way Jollibee is growing, I think it’s a good investment. Give it a decade and they might be reaping the rewards. They can invest in stocks by joining IMG.

If you want to learn more on how to become a successful entrepreneur, I recommend reading these books.

Which of the above ways on how to invest your money will you start, or have you started? Anything else you’d like to add that is worth a look at? Let us know in the comments below!

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