Many families on modest incomes are looking for ways to make more money, for example,by taking on extra work or starting their own small business on the side. If you don’t have the time or inclination to go in that direction, you could consider making some investments as an alternative way of building up your savings. The trouble is, taking your first steps as a new investor can be quite intimidating, what with all the technical jargon, the confusing variety of different investment markets, and the difficulty of assessing risk levels. That’s why most novice investors choose to use the services of a financial adviser or broker to take care of the tricky side. However, is it possible for a novice to go it alone?
The stock market and the whole world of investments has become far more open to newcomers and those on a modest budget in recent years. One of the most relevant developments has been the introduction of robo-advisers. These are automatic systems used by specialist investment websites to manage simple investments and money management. Some operate entirely on the basis ofrobo-advice, others offer options to combine the automated service with input from a human financial adviser too – although this will inevitably be more expensive. It’s a good idea to compare providers and see which one offers you the kind of service you want for the best price. For instance, you could compare Betterment vs Personal Capital fees to find out which best suits your needsand meets your budget. This could be a good option if you’re looking to save money over the cost of engaging a personal financial adviser, but don’t have the confidence to decide what to buy and when to sell.
If you’re happy to make your own buying and selling decisions, then opening a simpleaccount with a stockbroker will allow you to trade as and when you wish. You just need to register for the account andmake a deposit, then the broker will take your instructions and buy and sell whichever stocks you direct them to. The broker will normally work on a commission basis, so you’ll know what the fees will be in advance. You can get margin accounts with brokers as well as cash accounts, but this isn’t advisable for novices as the account involves borrowing from the broker, meaning there is a higher risk of loss. When choosing your shares and deciding on the right time to buy and sell, make sure you pay attention to what the financial industry is saying about businesses you are interested in. Take notice of the information and advice you read and listen to the experts, so you know you will be making sound judgments.
Investing sensibly and within your means is one of the best ways to increase your income over time. Looking for a quick fix or hoping to strike it lucky and make a small fortune aren’t realistic ways of approaching investing, so don’t view it as a get rich quick scheme. If you have any doubts, always refer to a financial adviser – it’s a false economy to save money on fees if you endup losing your investment.