Today I will tell you about the sequence of steps to start your investment path. Everything will be described in extremely simple and understandable language. This requires almost no basic knowledge of economics and free time. Any housewife or student will be able to build their own investment portfolio.
To begin with, I recommend my article about the first portfolio of securities. For those who are too lazy to read or navigate the pages, let’s start right here and now. And remember-only securities can provide a passive income higher than bank deposits.
How to start investing?
In order to buy shares or bonds in your first portfolio, you need to open a brokerage account. Unfortunately, a bank account is not suitable for this purpose. But most banks have their own brokerage department. It can open investment accounts for clients with a license.
Opening a brokerage account in 2020 takes no more than 15 minutes for most brokers. By the way, this can be done sitting at home on the couch. The standard procedure for opening an investment account is to download the app, upload a photo of your passport, and open the account. After opening a brokerage account, you need to top it up. In addition, almost all brokerage companies can deposit funds using a plastic bank card.
I recommend that you specify the commission for deposits, as it can range from 0% to 2% of the deposit amount. After successfully adding funds to your brock account, you can start creating a portfolio. The goal of any investment portfolio is to generate passive income. The capitalization of your fortune will also increase in parallel.
Which stocks and bonds to buy in the portfolio?
This is the most important and responsible moment. The future state of the investment airbag depends on the quality of the selected paper. However, do not rush to buy only high-profile brands in the portfolio. One of the key tasks is to find promising companies that are currently undervalued on the exchange.
At this stage, you should also evaluate your own investment risk profile. Some brokerage companies offer this service for free. So you can understand the tendency to a more aggressive investment style or conservative attitude. Only then can you start buying securities.
When buying a particular security, you need to conduct a preliminary fundamental analysis. The most important thing is that the company regularly pays dividends and pays coupons on bonds. It is not necessary to study balance sheets and other waste paper.
To set up bank accounts for receiving dividends
In order to ensure that the passive income from the invested money is felt most clearly. Therefore, I recommend that you transfer income on shares and bonds to a bank account. All brokerage houses offer this feature. Of course, some will say that the interest can be reinvested. But we have a different task. We want to regularly receive passive income. This is why it is so important to “see” the money coming from investments.
Where to invest a little money? To large and medium-sized companies that pay their shareholders money. When choosing a company, you need to understand whether you want to buy this company? Don’t just speculatively trade these stocks. Exactly, buy for the long term. After you have indicated receiving income to your bank account, relax.