how to start investing

We often think a lot about how to start investing and picking the right stocks, but sometimes I think we may just be making it a little more complicated than it really needs to be.

Even any investing blogger flips on CNBC and they expect you to hit the ground running like Warren Buffett himself. It’s so easy to get overwhelmed and you end up not starting on that investing journey that’s going to eventually set you financially free.

I ran a poll a few months ago on how to start investing and found that one in every five of the participants hasn’t started investing yet. And only some of them had just begun. So, I want to change that right now and share some very practical info on how to start investing.

I want to get every single one of you out there started investing and making money. I will try and cover the most important investing questions for beginners to get you started. Then I’m going to tie it all together with a step-by-step strategy that you can use to make a $3000 monthly income on just 15 years of investing from small investments.

So, let’s get going.

For those of you that have already started investing, though, it’s going to be a great refresher course on those basics that will make you rich, especially the step-by-step plan towards the end.

How much should I invest?

how to start investingIt’s one of the most common questions I get about starting investing and really the one I think keeps most people from getting started and the best and the worst answer here is just to invest what you can. I know it’s not the easy answer that you want, but it’s also the truth.

I’ll show you how to start investing by planning your finances around your own capabilities, but there is just no hard-set rule for how much you should invest in what I am about to explain to you.

Later on, I’ll explain in a step-by-step strategy on how to turn $150 or $300 a month into a $3000 monthly income. But that’s not an absolute rule and might not work for you.

You’re going to hear, from other sources, things like invest 10% of your income or calculators telling you how much you need to invest. But they all leave out one critical detail, and that’s you. Your own income, your own situation, which are both going to determine how much to invest each and every month.

Now, figure out what’s left in your budget, after paying those must pay expenses. I would recommend starting with at least $100 to $150 a month. But if you can’t do that, just start with $50 a month.

What is important here, is that you get started investing. You start building that habit of putting money in stocks each and every month, no matter what, whether it’s $250 a month or 25 bucks.

Once you build that habit, then you could worry about whether you’re investing enough to meet your goals. But I want you to get into that habit first.

Now, think about what is or what was your biggest obstacle to start investing. What’s that one question that you just aren’t sure about is keeping you from getting started. We’re covering a lot of these questions here, but I want to make sure to help you get started.

Remember that you can use the comments section below to provide any comments or opinions.

I can’t stress enough that it is critically important that you get ready to invest, and this is something most investors just don’t do. Now what I’m talking about here is about getting your finances ready, getting them in order for you to start investing.

It’s one of the most heartbreaking things to see and it happens all the time, to see a lot of people out there just putting off investing until they realize the time wasted.

On the other hand, I also see some people start investing, being motivated and their portfolio is growing. Then something happens and they have to withdraw that money. And this is so demotivating, having to start back from zero.

And a lot of people just simply give up. They never get back to investing, and it just ruins their lives. So just a few recommendations here to get your finances ready to invest.

First is that you need at least a month’s worth of expenses tucked away in savings.

Now, I know a lot of people are going to tell you to have 3 to 6 months of expenses saved before you start. I’d say three months is probably a really good target, but I don’t want you saving forever before you start investing.

The important point here is you have some of that ‘what if’ money in savings. So, you never have to withdraw your investments.

It’s time to take a hard look at your budget and your income

If you can’t scratch together at least $150 to invest each month, it’s really a time to take a hard look at your income directions. And that’s something most people don’t think about, the income side of the equation. Sure, you can usually find an extra 50 bucks or so in the budget to invest, but sometimes you just got to realize you need to make more money.

Investing should be enjoyable and not miserable

But as you’re planning here, I also want you to not be investing every single dime, sacrificing everything, and just being miserable. I fell into that trap in my early twenties. I was saving every penny, working two jobs, and managing my own rentals. I was living on ramen noodles and having zero fun just so I could invest more money.

The problem with this type of choice is that I’d burn out every six months or so and just go on a shopping spree. I’d set myself back two steps, and it was because I didn’t have a plan for what I could realistically invest in and still be happy in the now.

So, take a look at that budget set in an amount to invest that can get you to your goals, but will also leave room for a decent amount of enjoyment in your life.

Now you’re ready to start investing. But what do you invest in? You’ve got the money. What do you put it in for? That maximum return?

The greatest lies of investing

how to start investingI want to reveal one of the greatest lies of investing, that it’s all about picking stocks. In fact, investing is much more about the timely amount you invest and just watching it grow over 10 or 20 years. So, don’t stress out so much about picking the right stocks.

Honestly, the best strategy for your investment dollars is that you have some core investments that makeup maybe 60 or 75% of your portfolio. These are in Exchange Traded Funds or ETFs.

For example, you might have 15% of your money in the Vanguard Real Estate fund, which is going to hold shares of companies in that real estate sector. Maybe you hold another 10% of your money in the Vanguard long term bond ETF, which invests in hundreds of bonds and pays a 3.3% dividend.

Finally, maybe you hold another 50% of your portfolio and a few funds like the Pro shares S&P 500 dividend aristocrats CTF, a fund of the best dividend stocks in the market.

So, by investing most of your money that course 60 to 75% in 3 to 5 funds, you get instant diversification across stocks, bonds, and real estate. Your money is spread out across hundreds of stocks. You’ve got bonds in that bond fund and cash flow from the real estate funds.

Then with the satellite portion of your portfolio that remaining 25% or so of your money, you can invest in individual companies that you really think could produce those higher returns. And the beauty of this satellite strategy Is that because you only have about 25% of your money to invest in these individual stocks, and say you invest maybe 3 to 5% in each of these.

That means you’re only picking maybe 8 to 10 or 15 at most of these individual stocks. So instead of having to find 20 to 40 stocks, doing the hours of analysis on each one, and keeping them up to date, you only need that handful of winners.

This is so powerful because it’s going to cut in half the amount of time you spend looking for stocks to buy and then following your investments. You don’t have to worry about those 3 to 5 funds your hold. They are diversified across a group of those stocks, bonds, and real estate, so they’re always going to be getting that average return on their investments.

Where do you buy them?

Now that you have an idea of the stocks you want to buy, where do you buy them from? Which is the best online platform for beginner investors?

There are a million and one investing platforms, but honestly, they’re all pretty much the same. However, there are three things you want to look for though, so let’s look at that, and then I’m going to tell you which platforms I personally use.

No commissions

First is you want to look for an investing site that doesn’t charge you to buy yourself stocks. When I started investing in 1999, Brown and Company disrupted the industry by being one of the first low-cost brokers at $5 a trade. But even that’s too much anymore.

Most of the major brokers and investing apps have gone totally commission-free.

Fractional shares

It’s also nice to use a site/app that lets you invest in fractional shares. That means you can invest in any amount of money in the stock, no matter what the stock price is at.

For example, you can invest $50 in shares of Amazon, and instead of having to buy a full share of $3000 the sites just going to split up that share and you’ll get $50 worth.

Research and tools

Look for a platform that gives you the investing tools (i.e. CopyTrade) and the research that you will need to invest. Now this one isn’t quite as important as those other two, and some investors, especially the beginners out there, may never need those research tools.

The trick, though, when you’re thinking about where to start investing, is that there’s nothing wrong with having more than one investing account.

In fact, between retirement and regular accounts, I have five different accounts on three different investing apps. But my main go-to app is eToro for the research and some other tools and because of that commission-free trading.

How to start investing?

A great question I get from beginner investors all the time is how do I start a portfolio. You’ve got the money to invest. You have an idea of the stocks and the funds that you want to buy and the investing site you want to use.

Now the question is, do you buy them all at once with just a little in each? Or do you invest everything in one stock each month?

And I would definitely recommend buying all your stocks at once, putting a little in each, and then adding to them each month. Makes sense?

The reason here is if you buy just one stock a month, putting all your money into it, there’s going to be a long time when you have a lot of risks just in one or a few companies.

For example, even if you’re planning on investing in just 15 stocks or funds for six months, you’re going to have all of your money in just a handful of them. That is a huge amount of risk.

Think about it. If you’ve got just six stocks, that 17% of your money in each one. Now let’s say two of those stocks fall hard on some bad news, each losing a third of their value. Because you had so much of these in just these two stocks, your portfolio is now down over 11% and that’s if all the other stocks are holding steady.

But if you had started your portfolio with all 15 stocks, then you’d have about 7% in each. That same drop in two of those stocks would hurt, but your portfolio would only be down about 4% and not nearly the same level of pain.

Again, this is where using an investing app that allows fractional shares really comes in handy because you can invest your money each month across all those stocks in your portfolio. You don’t have to worry about buying at least one whole share of each. You could just invest 50 in one and 50 in another one and so on for your whole portfolio.

So now we’ve moved on from how to start investing down to actually investing here. Putting your money down into a stock, and this is going to be surprisingly easy. If I could show you how to buy a stock on my account at eToro, you would see that the process is almost identical on any investing platform.

Let’s say I want to buy shares of everyone’s favorite stock. Tesla. A short tip here, if you don’t know the abbreviated ticker symbol, you can always search the company name in the app, and the drop-down is usually going to show you that ticker on the stocks profile page.

Inside the app, you would be able to see all the basics like price market cap, the 52 weeks range of the prices, and then across the top here you can see a bigger chart.

Let’s say I’ve already done my own research and want to buy the Tesla stock, I would click the buy button to do it. The order page that follows is almost identical on any platform.

You will see the bid price of the shares, which is the highest price an investor in the market is offering to buy the stock. And there is also the ask price is the lowest than the investor is willing to sell their shares for in the market right now.

Now, these two prices, the bid, and the ask price, they’re going to be more important to you if you’re doing options trading because they could be much further apart. For most stock investors though, this bid and the ask price are going to be less than a few pennies difference.

The common actions you can do at this stage are buy, sell, sell short, or buy to cover stock. You can simply select buy and then put in how many shares you would want. If you’re on a platform that lets you buy fractional shares, this is probably going to be just a dollar amount.

How much you want to invest, rather than having to pick the number of shares you want for this price type, the majority of the time when you’re buying stocks, you could just pick the market order type.

Doing so will buy the shares immediately at the current market price. These other orders, like the limit order, are much more important when there’s a larger bid ask spread, and you need to tell the app what price you want to buy the shares.

Though not really an issue for most stocks, the app is automatically going to show the total cost of the trade, and you’ll be ready to go.

How many stocks should I own?

This is another really common question for beginners and even those investing for a while. You get all these great investing ideas every day, online or on TV, and it could get very easy to build a portfolio of hundreds of stocks.

You just keep investing in everything you read about, but you really don’t need to. Research shows that once you get to maybe 20 or 30 stocks in your portfolio, your overall return starts to look a lot like the average market return because you’re so diversified. You’ve just got a little of everything in your portfolio.

Having those 3 to 5 funds, like we discussed earlier, gives you all the diversification you’re going to need in those asset classes. Then you just pick 10 to 15 stocks of companies that you really like. Stocks you think you could do really well.

The strategy spreads your risk around with those funds. Those they’re going to give you that market return. But since you’ve got a little bit more in that small handful of stocks, you get that opportunity for the higher returns. Just 10 or 15 stocks for that upside shot if a few of those really take off.

When should you sell your stocks?

A question every investor needs to ask eventually is that, ‘When should I sell my stocks’?

You’ve got your stocks. You’re investing every single month. When do you take those profits and run? The simple answer here would be never. Just hold those three funds and the 10 and maybe even 20 stocks you really like until you retire and start living off your investments.

But we all know it’s not as easy as that. Even longer-term investors don’t hold their stocks for that long. Sometimes you need to sell, and only you could know when that time comes.

What troubles to look out for

how to start investingIt really comes down to three problems that I watch for in my stocks.

First is if there’s a scandal or a lawsuit in the company and then no accountability by the management. Hey, we all know that bad things happen to good companies, and even the best run into problems sometimes.

But if the management doesn’t step up and say this was my fault, here’s what I’m doing to fix it, then it’s time to dump the shares.

The second problem I watch out for is a company piling on too much debt. I’ve just seen this become a problem too often in the past, and companies go on an acquisition spree, buying up everything they can, and they fund it with mountains of debt.

And of course, those acquisitions never go as planned, and the debt payments just become unsustainable. The dividend is cut, the share price plummets. So, I would want to be out before that happens.

The third signal here is if the stock price just reaches where I think it should be. Whenever you’re investing, you need some kind of an estimate, whether it’s from analyst targets or your own of how much that stock should be worth. I wouldn’t necessarily sell a stock just as soon as it reaches that target. But if it goes much higher, I’m looking for something with a little more room for return.

So now you’ve got that road map to how to start investing. Now, I want to share a step-by-step strategy to start investing and can possibly give you an extra $3000 or more a month just from your investments.

Understand though that this is just a general plan.

I’ve already suggested certain amounts to invest in how to start investing. But if you can invest more, you’ll be able to reap those benefits even faster.

Step-by-step Plan

how to start investingYou start that first year investing just $150 a month following the outline we went through in this video. That first year, you’re just getting used to investing, putting that money away, and watching it grow. And I started you off slow in that first year to make sure that everyone could get started.

This second year, we’re going to increase that monthly amount to $300. So, you’ve got a whole year to play around with your budget and your income, so you have that money available. Now, we’re going to be doing this for three years, $300 a month.

This is to build that rock-solid habit of investing each and every month. Most of your investments here are going to be more than likely in those riskier stocks like tech and communication services for that higher return.

You’ve got more than a decade to let them run. So, it’s a great time to take that risk right here. This is also a runway though. You’ve got three years of investing that $300 a month, but then we’re increasing it to $500 to really start building your wealth.

So, in those three years, that’s a perfect time to start building up your income sources. Maybe start those passive income sources that we talk about in this site, so that you’re ready to invest that $500 a month starting in year four.

And by the time that year comes, you’ve got that investing habit and the cash. Now it’s just a matter of putting it all to work. At a modest 10% annual return here, you’ve seen your portfolio rise to over $20,000 and you can really start to see it grow.

You’re going to be doing this for five years, and I guarantee after that first year, it’s going to be like second nature for you. You won’t even miss that $500 a month. By year 10, you’ve got more than $80,000 in your investments, and we’re going to be doing our last increase here for the next five years.

You’re going to invest $650 a month. Stick with it though and find the cash to invest because this is the last five years, you’re going to have to put that money away. And here maybe you could start pulling back some of the risks in those new investments.

You could start buying those cash flow investments like real estate stocks and some dividend stocks in your portfolio. Now, these investment ideas are just that. Ideas. I’ve tried to start you off with a little bit more risk in those earlier, but then suggest a little less as you become a more mature investor.

Basically, you are front-loading your returns when you can stand the risk and then protecting your money later. But you always want to hold that diversified portfolio and use the strategy that we talked about earlier.

And after that, five years of investing $650 a month, that’s it. That’s all you need to produce that $3000 a month income when you retire. Feel free to keep investing here for more income or just enjoy the extra money each month, and here you might have more of your investments and safer sectors like utilities and consumer staples, just to make sure your money is there when you need it.

But at this point, you can sit back and watch your wealth grow. And after 15 years of investing, you’ve invested $87,000 and are eventually going to see it grow to three-quarters of a million.

That’s $750,000 and you can safely withdraw about 5% of that each year, letting the rest grow. That’s going to produce $37,500 a year more than $3000 a month for the rest of your life.

And that’s if you stuck to that modest plan to start investing, just starting with $150 a month. Most of you hard chargers out there, you’re going to have more money to invest each and every month, and you’re going to build a bigger portfolio.

Hope you enjoyed the information I had provided you here.

Of course, investing in the stock market bears a certain element of risk and you should always do your due diligence before investing your money.

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social media marketing

Every successful online business brand that I know of, has active social media marketing campaigns. I am also pretty sure that you know that your business (despite its size) needs to be on social media as well. Some of the most popular social media marketing sites on the web to consider are YouTube, Facebook, Twitter, Instagram, etc.

Also, Snapchat, even though Instagram is totally crushing it, it’s still doing really well. They have over 100 million daily active users.

I can certainly understand that to a beginner, all of this is overwhelming and complicated.

So how can you get started?

Here, I’m going to share with you how to get started with social media marketing as a beginner. The first thing you need to do is pick the right social network. Yes, there’s a lot of them.

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Whether it’s Facebook, LinkedIn, Instagram, or Twitter, it’s up to you to select which network you want to be on. You could be on all of them, but if you’re on all of them, you’re not going to spend enough time to make your presence anything amazing.

You don’t want to do anything short of doing an amazing job. For example, you don’t want to be on LinkedIn and do an ordinary job. Just as you don’t want to be on Facebook and do a substandard job. It’s better to not be on them than it is to do a mediocre job. Because doing a mediocre job will get you absolutely no reach.

I kid you not. Social Media 5-6 years ago was way easier to leverage to get traffic from. Nowadays, their algorithms are so strict because there’s so much competition, they’re looking for the cream of the crop. Simply put, if you’re not doing all the right things, you’re not going to do very well.

Pick the Right Social Network

social media marketingTherefore, you do need to select the right social network, and what’s working for me may not work for you.

The way you pick the social network is to look at what space you are in. If you’re in B two B, the chances are LinkedIn is going to be the best choice for you. Twitter is also another good social work for B two B, but LinkedIn typically is better. If you happen to be in B to C, Facebook, Instagram, and YouTube do really well.

Worth mentioning, YouTube works well for both B two B and B to C for social media marketing.

Now here’s the thing. You should look closely into what content type would you like to create. Are you someone who’s really good with videos? If so, would recommend you to start with YouTube or LinkedIn.

Facebook’s much more competitive. With YouTube, you can get longevity even if you don’t have an audience or a subscriber pool. You could get more traffic over time on YouTube. With Facebook, people don’t really search on there.

At YouTube, people perform searches all day long for videos, and your videos can continue to get views if you rank higher. If you’re going after an older demographic, Facebook can deliver amazing results. But if you’re going after a younger demographic, Instagram and Snapchat would be simply ideal.

So now that you have a rough idea of which social network to go after and if you’re still unsure, just let me know in the comment section below. Be sure to let me know your business and I’ll help answer the question for you so that you’re using the right social network from day one.

Creating Content

social media marketingOnce you have the right one, the second thing you need to do is start creating content. So now you most likely would say that you have no friends or following. Doesn’t matter.

You must understand that you will not get any followers if you don’t have any content to offer them. So, start creating content right away.

That starts off with completing your profile. Facebook, Twitter, Instagram, all of them have profiles for you to complete. Be sure to complete everything from a user name to your email address, to uploading a really stand out image, to a description of who you are or your company.

If you don’t complete your profile, you’re not giving people a reason to follow you. And when you complete your profile, talk about the benefits that people are going to experience from following you or subscribing to your page. So, complete your profile, and then lead into the content.

If you’re confused as to which type of content to create, just have a look at your competitors. All niches have competitors, even if you’re in a new space. Let’s think about when uber starting out and about to revolutionize the taxi industry, their competition naturally was the entire taxi industry.

So, you look at what is your competition doing on social media. Now I know that Uber has been already around and they are a multibillion-dollar company. But to give you an example, if I was creating Uber from day one, that would be my competition. You look at your closest competitors. It could be even indirect competition, yet is still your closest competitor.

You want to see what types of content are doing well for them and what contents aren’t. That’ll give you ideas on what you should do more of and what you shouldn’t do as much of. If you don’t know how to create content, it could be the simplest as status updates.

Remember, it’s social media marketing. Just about anything is considered content. You could do something as simple as pulling out your phone and recording a video of you.

Share some links along with those videos.

If you’re not sure what links to share, you could go to Buzzsumo dot com and type in any keywords from your industry. It will then show you all the popular articles that shows you what people like on Facebook, Twitter, all the social sites, which will then give you an idea of what kind of content will resonate with that social network and what doesn’t.

Build Connections

social media marketingNow that you’re creating content, the next thing you need to do is build connections. Remember that you need to build connections with people. It’s a social network.

Just because you’re on a computer doesn’t mean you’re not connecting with humans, so make sure your friending all the people that you know, following them, and engaging with them. You’re building connections.

So, if it’s your friend already, like someone that you know in person, you can just invite him to friend you on Facebook or follow you on Twitter. If it’s someone you don’t know, then you’re going to have to work more to build that connection.

Here’s how you do this.

You go and look for all the people in your space or putting status updates post. If they have questions, respond to them, help them out. If they have articles, feel free, and share them. If you think they’re valuable right, you could repost, share, etc.

If there are other people on these channels, groups, or fan pages that are related to your industry, even if they are your competitors and they’re asking questions, you could respond to them. Help them out.

That’s how you build connections. Even when you’re posting on your own page, when someone responds with a question or a comment, you should acknowledge that there. Thank them for leaving a comment. Respond to them when they have a question. That’s how you engage.

And what I found is that over time, as you engage, what you’ll see is a lot of people will come back over to your site. They’ll start to follow you. You engage deeply with them and they will become loyal followers.

It’s not just about growing your numbers and having 1000 followers or 10,000 followers. A very important tip for you is not to go for follower count. It’s all about having valuable connections, personal ones. Because if your 1st 100 fans or followers aren’t that engaged with you, all these social networks have it in their algorithm, and they’re looking at a percentage.

So, if you have a million fans but only 1000 engaged, the algorithm will consider this as a terrible engagement rate. It will not be showing your content to much of anyone, because no one likes it. But if you have only 100 followers and every single one liked it, shared it, and commented, they did all three of those things, the algorithm would be most likely to think that this content is amazing and needs to go viral because everyone loves it.

Quality Over Quantity

social media marketingSo you can understand now that it’s not about having the most amount of fans. It’s about having the most amount of engaged fans.

If someone’s not going to engage with you or your content, you don’t want them. It’s about having the most relevant diehard fans.

A bonus tip for you before I finish.

Don’t push people to your business from day one. Perhaps within three months or six months, by all means, you can start talking about your business. Try to get people over to your site by doing simple things, like just sharing a link.

But preferably you don’t want to do that from day one. Why would you want to promote your business when no one’s following you? They’re not engaged.

Look at it this way. If you walked up to a random stranger on the street, and you said, Hey, my name is John. I know that you buy paper towels because everyone uses paper towels. Would you like to buy the paper towels I am selling? They’re most likely going to feel like you’re crazy. Who are you? We don’t want to buy anything for you.

You need to build a connection. No one’s going to buy anything from you until you build that relationship. So, my advice is that don’t promote your business until 3 to 6 months. I’m to the extreme in which I like waiting nine months to a year. But again, you can do it within 3 to 6 months.

Conversely, If you’re doing paid advertising for social media marketing from day one, you can promote your business right from the very beginning. But if you’re trying to build up everything organically, you shouldn’t promote your business from day one.

If you’re still confused about how to get started with social media, leave me a comment below. I’ll answer and will try to help.

Thanks a lot for being here today.

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