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Why You Should Invest Even If You Have To Start Small

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When it comes to investing, you can start small, investing with only a little money; or you can go big, investing a substantial amount.

When it comes to investing, you can start small, investing with only a little money; or you can go big, investing a substantial amount. Yes, it’s hard to believe you’ll go far if you only start with a little money, but as you regularly set aside some money from your regular source of income, you’ll be able to continue to add to your investment portfolio.

While many people focus on finding the right investments, often it’s how you invest that makes the biggest difference. People have prospered through a variety of investments, from investing in collectibles to investing in traditional vehicles.

The most important thing is to start, even if it’s only starting with buying a single 1 oz Canadian Maple Leaf Gold, currently at $1,334.00, or less than a $1,000 for a few Apple Inc stocks, currently at $156.17 on the NASDAQ.

Let’s take a quick look at how to become a skillful investor in the world of collectibles or traditional markets.

Investing in Collectibles

 

A collectible is a rare item that is in high demand. While coins, stamps and fine art are well-known categories, collectibles can even include toys or comic books. Let’s take a look at coins and stamps, as examples, to understand the distinction between hobbyists and investors.

Coins

Numismatics, or coin collecting, may be one of the world’s oldest hobbies. It’s not only the collection of items of financial exchange, like coins, paper money, or tokens, but it’s a study of their history. While it’s fascinating to accumulate all sorts of rare coins, from a practical investor’s point of view, it’s a good idea to keep on building a collection of North American coins like the Canadian Maple Leaf and the American Eagle gold bullion coins because these are easier to buy or sell. In order to invest wisely, you should compare dealer’s prices before buying, as well as have a clear idea of their buyback policies. In addition, you should specialize in 1-ounce coins and avoid getting distracted by rare coins because these are often hard to authenticate, accurately evaluate, and trade.

Stamps

Hobbyists are intrigued by the different types of stamps they can collect; however, investors focus on the number of collector’s interested in a stamp—because the larger the number of collectors, the more buyers will be willing to pay. As an investor, you’re more interested in rare stamps than its history, unique design, or cultural significance. Scarcity determines value. Fortunately, you can tell at a glance if a stamp is rare—because rare stamps usually don’t have perforated edges. Perforations weren’t invented until 1854; before then, people used scissors to cut stamps out from a sheet. Another quick determination of criterion is the quality of the stamp; the better the quality, the less tear, damage, blemishes, or errors in design, the higher its grade.

Traditional Investments

 

A traditional investment, in contrast to an alternative investment, refers to well-known assets like stocks, bonds, equity shares, and real estate. These are purchased with an expectation of their interest earnings, dividends, or capital appreciation. With that in mind, here are some tips on how to do well with stocks and bonds:

Stocks

When investing in stocks, your biggest enemy is within, specifically unchecked emotion like fear or wild hope about the outcome of your investments. When picking stocks, focus on companies rather than dwell on ticker symbols; and when trading, aim to progressively increase your positions without incurring excessive risk. As you prosper, stay frugal, safeguarding some of your gains to be able to ride out wide-scale panics and market volatility. Finally, avoid trying to get rich quick by overactive trading.

Bonds

When buying bonds, always do your homework, reading the prospectus carefully. Additionally, before investing, define your goals and evaluate your risk profile. If you’re interested in the purchase of individual bonds, then locate the broker specializing in those bonds.

In closing, as you skimp and save and invest your money, it’s encouraging to remember that you will always earn far more money in the long run through your investments than through your labor alone. Think of it this way: your money never gets sick, burned out, or needs to take the day off, but always works tirelessly on your behalf.

Photo courtesy of: kschneider2991

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Kayla is a mid-20s single girl living in the Midwest, USA. She is focused on paying off her consumer and student loans, while simplifying her life and closet. You can join her on her journey at ShoeaholicNoMore.com or follow her on Twitter @shoeaholicnomor.

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