How to invest as a new investor with minimum savings

With little savings, the thought of investing seems weak because of common myths. Investing is associated with a lot of money, incredible risks and the inability to earn without a thorough understanding of the subject. However, if you take responsibility and are not afraid of learning a new area, you can safely start investing even with a few thousand rubles.

Plan of Action

Consistent preparation, a competent approach and a cold evaluation of mistakes allow you to confidently enter the investment market. Expert advice and tips will help prevent common mistakes. Here is a step-by-step guide for those who want to try their hand as an investor.

Step 1: Formulating your goal

An abstract desire to become rich is not enough for long-term and effective investing. The goal must be specific and written down on paper. Starting a new business is inevitably associated with minor mistakes and disappointments. A goal will help you continue on your investing path after failures.

Step 2: Laying the groundwork

The subject of investing has its own specifics and terminology. Further study will only bring results if you understand the basic vocabulary, the logic of the indicators, the peculiarities of the instruments.

Stage 3: Acquiring knowledge of market processes and economics

The acquisition of basic information on the economic sphere is necessary and investment management with the help of intermediaries and by acting independently. Profits and risks do not occur spontaneously, there are clear links between them which must be understood. Books by renowned investors, consultations, webinars, trainings and other sources of information are useful in this regard. It is important to analyse the content you receive and check its correctness and relevance.

Step 4: Keeping the right mood

Traders of any level can remember the moments when mistakes caused deep disappointment. Knowing how to lose and finding sources of inspiration to continue investing can maximise the likelihood of winning. Consider in advance what to do in case of force majeure. Eliminate confusion at times when urgency is paramount.

Step 5: Set aside a minimum amount

Investing with debt is the worst idea. Investing is relevant when you have available funds. Loans and other encumbrances will not allow sufficient leeway. Saving a small portion of your income on a regular basis will help you build your start-up capital. Optimization of expenses and temporary part-time jobs are also worth considering.

Step 6: Selecting an investment style

Even before you enter the market, you should consider which investment style you prefer. Some are afraid of losing money and prefer low risk and working with equities or bonds. Others prefer action and risk, therefore they will trade options or futures. After gaining experience, the style will change, forming combinations of strategies with a comfortable process and pleasant result.

How much money do you need to start investing?

Start-up investments do not require large financial outlays. You will need at least 5,000 roubles to invest in mutual funds. Buying shares will cost even less. With a couple of thousand roubles, you can begin your career as an investor. It is worth bearing in mind that the scale of return depends directly on the size of the investment. But it is illogical to use large sums to test an unfamiliar industry. If you take a trial sum of 30,000 roubles or more, the profits and wins will already be tangible.

You can also use this money to learn the subtleties of manoeuvring in the market. It is better to allocate capital to different areas, in order to understand later which ones are more comfortable to work with. Having this understanding is a sure sign of entitlement to increase the scale of investment.

Recommendations for beginners

There is no complete elimination of risk in the stock market. We suggest studying 5 tips from experienced financial analysts and investors to reduce mistakes.

• Diversify your portfolio. Engaging with only one company can result in a total loss of your investment if something goes wrong with a particular organisation.
• Be disciplined. First earnings often boost self-esteem and lead to a relaxed new investor, and then the money is lost because of a lack of focus.
• Go forward calmly and convincingly. There can be downfalls after ups, you need to remain cool and not give up on your goals. The experience you have gained will allow you to be more careful in the future.
• Get along with the right people. Having like-minded people around you will help keep the right attitude. The Internet provides plenty of opportunities to make new acquaintances with your interests.
• Increase your knowledge base on a regular basis. A tactic that works perfectly today may be useless or even harmful in a few days. So don’t miss the chance to gain and apply new knowledge.

Working on yourself opens up the opportunity to dive into and understand the investment market, even if you haven’t had to deal with this field before.