If you are just starting to think about how and where to invest your hard earned cash, here are a few simple tips.
Firstly work out your finances so that you know how much cash you can realistically invest. You do not have to start by penny pinching and investing every single penny that you can get your hands on. Work out your expenditure and see just how much money you have spare to invest.
Next, research the type of investments available and what will be most suitable for you. You may need investments that enable you to access your money easily and quickly, or you may have some free money which you can forget about for a while. These long term investments invariably offer higher returns.
Once you have decided where you are going to invest decide how much is realistic for you. Here you will also have to decide what is a viable amount for investment. Take shares, for example. As it costs you a fee to sell shares and often one to buy them, you need to purchase enough to make them a good deal. If you hold a very small amount of shares it could end up costing you more to cash them in than the financial return will be. Some companies you may buy shares in may give higher returns but not be very safe. Initially, I think it is wise to only invest in safe and long standing companies.
Also, in general, when you are getting started with investing it is best to start with fairly safe investments and relatively small amounts of money. You can build your portfolio and diversify once you have some funds to fall back on. Take the long view and don’t stretch yourself too much at the start. Once your initial investments are paying returns with interest and or dividends you can choose to reinvest those amounts and will soon see your little financial empire grow.
So overall:-
Be realistic.
Start small.
Start safe.
Research your products well.
Invest regularly.
Re-invest any profits when possible.
Diversify your investments, with time.
Take the long view.
Sometimes the safe option may have a low return but as a starting point can be a good investment. For example, in England there are National Savings which are government backed and as far as I am aware are 100% safe. The returns are not fantastic but they would be a good place to start. Similarly Premium Bonds only give you your initial investment back but they are safe and there is the chance to win large amounts of cash.