19 April 2022 | 8 - 10 min read
7 Surprising strategies to help you start investing
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Investing isn’t very glamorous.
There, we said it.
Sure, you can go and blow your salary on whatever it is that excites you today. But tomorrow, you’ll have little or nothing to show for it.
That’s where investing is different.
By investing your money today, you’ll have something big to show for it in future. And that’s where the excitement is.
Investing is deciding to sacrifice short term excitement for long-term financial freedom and general financial awesomeness. Think about a family home where your kids can run around freely, and you can entertain your friends with pride.
But I need lots of money to start investing.
WRONG.
That’s a common myth. So many of us think that investing is only for the rich. Only something that big businesspeople do. Or something that older people do when they have lots of money.
All of that can’t be further from the truth.
The truth is that you can begin investing with only a small amount of money. Even as little as R100, or R500 a month, can get you started on the path to creating wealth.
There are a bunch of different kinds of investments available to you depending on your budget, your goals, your needs, and your general life position.
Due to the range of investment options on the market, it’s usually best to speak to a qualified expert who can help you decide on the best investment choices for your specific needs and goals. We can help with that - book a session with one of our consultants.
So, what is investing anyway?
Investing involves buying assets which can include things like shares, unit trusts or property, with an expectation that your investment will make more money for you.
You read that right: Your money will work hard every day and make more money. It’s not magic. It’s just investing.
In other words, while you’re at work, so is your money! The only difference is that at the end of the day, you go home, but your money keeps working.
And working.
It works for you 24 hours a day, every day of the week, and never gets a holiday.
The key concept here is that you’re buying things with a value that will grow over time. It’s important to fully understand that.
In contrast, you might have heard people talking about how they ‘invested in’ a car/fashion item/accessory/new TV etc. Generally, those are NOT actually investments. Most of those items will only lose value over time.
I’m a complete beginner. What are the basics?
The key to becoming a successful investor is developing good financial habits, just like the ones we teach here at Velocity Club.
That means, adjusting your lifestyle so that you live within your actual income and not on credit. It means making wise financial choices. And it means planning ahead and thinking about your financial and personal future. It also means changing money habits from don’t save what is left after spending but spend what is left after saving.
For those reasons, a good strategy for developing the basic habits of a smart investor is learning to start saving.
Become a savvy saver
Set aside a small portion of your income every week or every month - whenever you get paid. This practice will become easier with time.
Being a successful investor requires a disciplined approach to putting money aside instead of spending it, so for that reason, starting off with saving a small amount after each pay day is a great way to build the foundations of good investment habits.
Clear that card
Another principle we are very clear on is the need to pay off high-interest debt before you start investing.
A good example of high-interest debt is credit cards and store accounts. Credit card facilities routinely charge double-digit interest rates, which is a lot in the financial world. It’s more than some investment types will be able to deliver in returns.
So, to grow your wealth meaningfully, your first big priority is to start clearing any credit card debt you might have.
Okay, but I don’t even know anything about investing . . .
We’ve got you, fam! Velocity Club’s team of experts are here to help you, guide you and most of all to get your investment journey started.
This month is all about investing, and we’ve got all our best talent lined up to answer your questions and fill you in on everything you need to know about investing. Meet the team right here!
But don’t forget that you also have the power to educate yourself. If you’re reading this, it’s because you have internet access and that means, you have the sum total of human knowledge in your hands, right in front of you.
Start with our website. We have loads of articles, webinars and other resources right here that you can read to empower yourself with the kinds of financial knowledge that we all wish was taught at school. You can start with our webinar on investment basics, hosted by financial journalist Arabile Gumede - register for this 30 minute webinar, and choose a time that suits your diary best.
Get a proper plan
We’ve all heard that old saying, ‘Failing to plan is planning to fail’.
Things aren’t quite as brutal as that in the investment world, but certainly, we would highly recommend that you speak to one of our experts before you dive into the world of investing.
Compiling a realistic, practical budget is a crucial first step towards becoming a successful investor. It’ll help you understand how much you are able to invest, which is required for you to develop your investment goals.
Investment goals are exactly what they sound like: It’s what you want or even perhaps need, out of your investment portfolio.
These will be different for everyone, but investing is a long-term process and that means that investment goals are typically similarly long-term (5 to 10 year) goals. Buying a house is a popular example.
Have fun!
It might sound unbelievable but investing can be fun.
You get to meet us; you’ll join our amazing community where we all learn from each other. And you’ll be able to participate in our awesome, regularly scheduled webinars and masterclasses about all kinds of super interesting personal finance topics.
But beyond that, there really is something to be said for the feeling of making money that you didn’t have to go to work for. That’s the real excitement of investing.
And we want you to experience it.
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