Basic Investing 101

Hey Ya’ll!!!

I think it’s a little silly for me to be writing a post on investing, since I’m still learning so much about it myself! But since so many of you have expressed interest, I decided to just give you some Basic Investing 101. So first of all, for those of you who are brand-new to the concept of investing (alot of young women are:), here’s the definition:

“Investing”: (v)

“expend money with the expectation of achieving a profit or material result by putting it into financial schemes, shares, or property, or by using it to develop a commercial venture.”

So here are a few things I have learned so far about investing:

1. Read. 

Dave Ramsey is a wealth of knowledge (pun intended!) on the subject of investing in particular, and finances in general. I recommend anyone who wants to get into investing to read some of his books. I love The Total Guide to Money and “The Legacy Journey: A Radical View of Biblical Wealth and Generosity” . Another book I loved reading years ago when I was just starting to be interested in this stuff is Rich Dad Poor Dad.

2. Learn from people who have experience, as well as professionals. 

I had my first meeting with an investment professional (the gentleman my dad invests through) at probably 16 years of age. That’s when I started learning about mutual funds, stocks + bonds, and all that good stuff! I would recommend that if you have parents or mentors who have invested over the years, you start by asking them. My earliest lessons on investing were from my father- he was very open with sharing about good investments he has made over the years, as well as some that have totally backfired and resulted in losing money. In addition, I have met with or corresponded with several investing professionals. I also try to take every possible opportunity to learn from people whose financial principles and practices I admire. If you know someone who is hardworking, generous, lives within their means, and seems to have achieved a level of financial freedom (no debt, etc), ask them if you can sit down and ask them some questions.

3. Start investing money every month. 

My dad and Dave Ramsey taught me that it is wise to start the discipline of setting money aside to invest every single month, and the younger you are when you start, the better! Start investing at least 15% of your income monthly. Whether it’s a little money or a lot, the important thing is to START! If you’re a single person with fairly low expenses you can probably do more than 15%, although you need to be smart about what options you choose, as some are better for short term and some for long term, and if you’re thinking of buying a house in the next few years or even just having money available for starting a business or something like that, you don’t want all your money tied up in a high risk fund or one that will penalize you for withdrawing early.

4. Diversify.

Again, this is a lesson from my dad. He taught me that in investing, it is smart to “not put all your eggs in one basket”. That way, if one thing you are invested in goes down the tubes, you haven’t lost all your money. Investing has a variety of means and methods, including: buying or starting a business, acquiring real estate, buying shares in mutual funds, investing in a (small or large) business, or funding a Roth IRA (this can be mutual funds, it just grows tax free for your retirement). Personally, I use a variety of those investing options. One thing to remember is that even with mutual funds, diversity is key. Don’t put all your money in one mutual fund. If you are wanting to get started investing in mutual funds,  I would recommend you look around and maybe meet with a financial advisor who will come alongside you and help not only by investing your money, but educating you and answering any questions you may have. If you want to find an investing professional in your area, Dave Ramsey’s website has an option to find a local Smart Vestor Pro (Dave Ramsey endorsed investment professional) in your area. Another option if the Timothy Plan. They have a variety of funds, and I love that they are a Christian organization based on ethical + Biblical principles.

Disclosure of Material Connection: Some of the links in the post above are “affiliate links.” This means if you click on the link and purchase the item, I will receive an affiliate commission. Regardless, I only recommend products or services I use personally and believe will add value to my readers. I am disclosing this in accordance with the Federal Trade Commission’s 16 CFR, Part 255: “Guides Concerning the Use of Endorsements and Testimonials in Advertising.” 

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4 Comments

  1. Thanks, Alli! I inter-library loaned another Dave Ramsey book recently and am excited to read your post again more slowly. Miss you.

  2. Great thoughts, Allison. I am enjoying this series on Money so much! I like the way you put emphasis on living within our means and by setting aside money for savings and to invest. I wish I had thought about these things a LONG time ago. I want to purchase some of the books you listed and get reading. Someone I have learned much from is Clark Howard. I listen to his podcast every chance I have and I’ve learned so much about saving and investing. Thank you, again, for the time put into writing these posts.

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