The Beginners Guide To Safe Successful Investing
Not investing is costing you not only money, but the very life you want to live. Let's fix that by understanding what investing is in the first place.
What is Investing?
I often get asked the question of what investing actually is.
Investing is the process of committing money to an asset, like stocks, bonds, real estate, or businesses, with the expectation of generating income or profit over time. It involves evaluating risk and potential return, aiming to grow wealth and achieve financial goals.
Click here to watch the video and learn everything you need to know about investing - The beginners guide.
So, let’s dive into what investing is and what it is NOT.
Investing is not gambling…
Yes, Investing is completely different from saving. Click here to read more about the difference between the two.
Investing is when you take some of your hard-earned money and put it to work by acquiring an asset. When you invest in an asset, you buy and control a high-quality asset that can work for you.
When I say it works for you, this asset grows in value and generates income. It lets you know that you will be able to stop working and live the lifestyle you want. It will let you know that no matter what happens in life you've got this to lean on and rest on.
Never having investments is the biggest and most riskiest thing you can have.
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If you want to learn how to get your investments set up in a safe and secure way, I have a free Investing workshop for you where you will learn how to implement a proven investing strategy, the exact strategy that formed the base of my financial freedom and a strategy that I still use to this day!
Click here to access the free training!
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What is an Asset?
We hear the word being thrown around but do we truly understand the meaning of what an asset actually is?
An asset is something that grows in value AND generates income. It’s important to know that not everything is an asset. For instance, the house you live in, is NOT an asset. Assets must grow in value and generate income.
Let’s dive a bit deeper into these 2 aspects:
Yes, it needs to grow in value in a proven way that you can bank on, and it can generate income.
- For example with stocks and shares - this is where you own a share in another business (We'll get to how to do that successfully and safely) and benefit from the growth and the value of that business that's called capital growth.
Then you ALSO generate income from those stocks and shares in the form of dividends paid out - so this is an asset because it grows in value in the form of capital growth and it generates income.
- For example with property - Your property grows in value and you can generate income from the rent that it earns.
**Capital Growth + Income = Total Return on Investment (ROI)
So now you know why you need to be investing and what an asset is, We need to really understand the benefits of investing.
What are the benefits of Investing?
First and foremost, investing makes sure that you keep the buying power of your money.
When you take some of your money, and you buy assets that generate income and grow in value, These assets grow at a rate greater than inflation.
This is what's so dangerous in saving. If you just have money sitting in a bank account or under your bed, you are literally getting poorer each and every day.
So, investing first and foremost is keeping up with and beating inflation, which is absolutely vital, but it's beyond that. Assets can grow in value and then generate income, they literally create your future wealth, which you can then feed off.
So, with saving, it's like having a tin of peaches in your pantry. Once you've finished eating the peaches…it's gone. Forever.
Investing is planting that peach tree. It grows and you get to feed and eat those peaches year after year after year.
So, there's sustainability of your long-term financial well-being. This is why you need to be investing because assets create your freedom.
No assets, no freedom.
No assets, you can never stop working.
And that is the biggest benefit of all is having that peace of mind that you know you can do that.
Now you may be thinking “Ann I don’t know where to invest or how to invest”. I have free training for you that teaches you exactly how to build up your assets safely and securely. This free training will help you get your core base of your investing set up.
Click here to access the FREE training How to become a safe and successful investor
In this training I share with you the exact strategy that formed the base of my financial freedom 18 years ago, a strategy that I still use to this day!
Now to form the base of your investments - most financial advisors will just put people into two asset classes, which is why most people stay poor despite thinking they're doing the right thing.
"So Ann what are they?"
The first and most powerful asset class that you must be invested in to form your base is called equity, stocks and shares. This is where you own shares in other businesses. It's a super easy asset class to invest in with small amounts of money, and it is absolutely foundational to your wealth.
Types of Assets available to invest in:
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Stocks and Shares: Owning a share in a business allows you to benefit from the business’s growth and receive income through dividends. This combination of capital growth and income is known as the total return on investment.
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Real Estate: Investing in property can provide rental income and capital growth.
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Fixed Income Assets: These are loan instruments such as bonds and structured notes, which offer capital preservation and generate interest income.
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Commodities: Items like steel, metals, gold, and silver fall into this category. They can preserve wealth and sometimes grow in value.
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Cryptocurrency: A specialized, emerging asset class that should be approached cautiously due to the volatility.
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Collectibles: Items like art, wine, and vintage cars can grow in value but do not generate income.
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Cash: While not growing like other assets, cash provides liquidity and has its role in your wealth planning.
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Precious Metals: Gold and potentially Bitcoin as a hedge against chaos.
In another article I discuss your Investment Pyramid and explain to you how to structure these assets together to build a kick-ass portfolio.
In the free training I mentioned earlier I also go deeper into structuring your portfolio and showing you how to have a spread of investments to eliminate risk and maximise your returns.
Something that I get asked almost every time I discuss investing is, “Ann isn’t investing risky?”
So let's understand what we're referring to when we talk about investment risk.
Understanding Investment Risk
What is Investment Risk?
Now, certain asset classes like your equity, like your real estate, like your crypto and your commodities, where there is a capital value, where the value of your asset can grow, its value will go up and down. That's just what's called volatility.
Investment risk is just how volatile or what the range of movement in the capital value is of that asset.
So, this is super important because if we don't understand what a word is that's being used in the media then all the alarms go off and, “My God, the stock market's crashing or don’t touch that it’s a risky investment” and we can end up not doing what we need to be doing for our wealth because we just don't understand. At the end of the day, knowledge is the most powerful investment we have.
So, risk just means volatility. So, all of your asset classes where you have capital movements like equities, properties, cryptos, commodities, collectibles. In fact, most of your investments, their value will move up and down.
How to manage Investment risk?
Now research has shown that after a three-year period, from when you started investing, the range of movement from when you start will have dampened down just because of time.
All of these assets tend to do this and the stock market does this, but the trend is always upwards. Over time, the trend will be upward. So, it's just a matter of scale.
When we're investing, we are talking about buying assets and holding them. We're not looking at selling them. We ride that ride wave and any money you're going to be needing in the next three years, you don't have in capital volatile assets where there's any capital movement.
- So under three years: You hold your investments or money you're going to need in that period, in your fixed income kind of assets (e.g Fixed deposits)
- Beyond three years: You hold investments where there's capital value variations.
And that is as simple as the risk management and understanding what it's about.
So now that you understand what investing is, what assets are and how to manage your risk, How do you become a successful investor?
The Four P's to being a successful investor
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Purpose: Know why you are investing and how much you need. Your goal is to build assets that can pay for your lifestyle.
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Products: Start with index-tracking funds for equity investing.
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Platform: Use an online broker platform to buy and hold your assets.
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Process: Follow a proven, consistent process.
The KISS principle – Keep It Simple, Safe, and Sexy – is a straightforward approach to managing and growing your wealth.
You don't need a financial advisor. You don't need anybody else making money off you. This is a lot simpler than most people have led to believe.
The KISS strategy is the exact the process that I used to create my financial freedom all those years ago, that I still use to manage and grow my wealth and that thousands of people have used to create their peace of mind, their freedom, and get on and know that finally they know that their money is working hard for them, not somebody else.
You’ll discover all you need to know about index trackers, why they are so damn simple, sexy and great for you and how to invest in them and with them in this free training, How to be a Successful Investor.
>>> Go here to get this free training NOW<<<
Investing is the key to your financial freedom.
No assets, no freedom!
No assets - You can never stop working!
Huge wealthy Investing love,
Ann
