Personal investing is a way for the savvy investor to achieve maximum profit by investing directly in the market without the aid of a broker or financial advisor. While not for everyone, those willing to take a few risks and make the time to do the research will find that personal investment opens up a plethora of financial opportunities.
Reasons to Begin Personal Investment
There are number of reasons to become a personal investor, including:
- maximum profit – The “financial experts” offer their services for large commissions and service fees—as much as $15-30 per transaction for even the services of a “discount” financial expert. If you’re smart and diligent enough to do your own research, you can pay as little as $8 per transaction or even less, depending on just how independent an investor you become.
- financial freedom – Maximum profit means that you hold the key to your financial future—and with the right plan, that could translate into true financial freedom. If your profits soar, you could be able to afford to quit your full-time job and devote more of your time to personal investment, continuing to build on your financial success.
There are two primary means through which you can start personal investment:
- direct investing – If you feel comfortable with your ability to navigate the financial markets, look into company direct investment plans, which allow you to buy shares of a company stock directly from a company without paying any brokerage commissions. (Some small service fees may be charged.) Direct investment is the most affordable way to invest, as there are no commissions to pay, but it’s also the most risky—unless you know what you’re doing.
- online investing – A more efficient way for the beginner to start personal investing is through online services. There are a number of online brokers that charge a minimal fee for use of their sites, while offering you total control of your stock, bonds, mutual funds, and options investments and trading. Online investing may cost more than direct investing, but in exchange you gain easy 24-7 access to all of your accounts as well as investment tips and guidance.
Personal investing may have many advantages, but it also involves much more risk than traditional investing by relying on the skills of a financial advisor. Here are a few guidelines to get your plan off to a sound start:
- get educated – There is simply no way around getting—and staying—informed about the financial market if you’re going to start personal investing. Take classes or read up on the best investment strategies of the day. Keep up with financial news constantly. Learn from your mistakes. Try “fantasy stock investments” to practice your knowledge before you invest a lot of your hard-earned cash.
- take it slow – Despite the potential for incredible financial opportunities, not everyone who becomes a personal investor becomes rich overnight or everyone would be doing it. Be patient. Don’t take crazy risks that could put you in a precarious financial situation.
Smart personal investors don’t put all of their eggs in one basket. Don’t put everything in the stock market, as the market can crash before you have time to pull your money out. Invest some of your finances in CDs, retirement accounts, and bonds so that you never find yourself losing everything on a single bad day of the market.