Ever felt like knowing how to invest money is part of a secret club you can’t crack? You know, that mysterious world where everyone seems to have it figured out, while you’re left scratching your head?
If you’ve ever thought, “Gosh, I’d love to invest, but it’s so confusing… and where’s the fun in it?”—I hear you, loud and clear.
Let’s face it, most of us feel overwhelmed by the sheer number of investment options out there. It’s like standing at the edge of a vast ocean, desperate for a life jacket, but not quite sure which one’s the right fit.
Who could blame you for feeling that way? We’re bombarded with impenetrable jargon, contradictory advice, and images of suited-up white, old men that make us question if we even belong in this game.
But here’s the thing: investing doesn’t have to be an intimidating chore.
In fact, it can be downright enjoyable—and I promise to show you how. Together, we’ll strip away the confusion, find the fun in investing, and set you on the path to financial success.
Are you ready to dive in and conquer the investment world with a smile on your face? Let’s begin!
#1. Learn the thirteen basic rules of how to invest money
- Rule 1: Don’t be blinded by the maths and graphs: investing is as much an art and a gamble as science.
- Rule 2: Leave your certainty at the threshold when investing: you may win or you may lose, but it will be interesting.
- Rule 3: Don’t borrow to invest.
- Rule 4: Don’t invest money you’d need soon; or money you’d miss if things go wrong.
- Rule 5: Keep it simple and use a digital wealth manager like the Nutmeg investment platform, or similar, if you don’t want your investments to dominate your life.
- Rule 6: Start a self-directed portfolio only if you are ready to learn, dedicated to persist and disciplined enough to manage it.
- Rule 7: Buy shares only in robust companies.
- Rule 8: In the stock market, you still make money when you buy, not when you sell (buy when shares are undervalued).
- Rule 9: Use common sense when buying shares; look beyond accounting.
- Rule 10: Use information sources you trust.
- Rule 11: Every challenge can be turned into an opportunity.
- Rule 12: Stocks and shares are not the only possible investments.
- Rule 13: No, your house is not an investment.
#2. This is where you can invest your money
Remember Rule 12 of investing?
When we think of investing, we usually think about stocks and shares. However, this is by far not your only investing option.
Here are some other possibilities (albeit, some of them are not as sexy as discussing shares and drawing graphs of prices).
Let me also remind you that every time you spend money on something that could potentially make you more money, you’ve made an investment (I did warn you, my reader, that I’ve made it my mission to keep this simple).
Starting from this definition, here are some ‘traditional’ investing possibilities that are open to you:
- Bonds. Simply put, bonds are the way of governments (and others) to borrow money from us.
- Stocks and shares. This is the way to buy a (small) part of a company.
- Options, futures etc. Sorry, not even going to go there – these are fairly speculative and you need to really know what you are doing to get anywhere. Even then…
- Art, wine, jewellery. In principle, investing in the ‘finer things in life’ is fun. In practice, it needs a lot of specialised knowledge because every time you buy a piece of art you are betting that its value will increase. Only people who understand art have the eye.
- Mutual funds. These are investment strategies that allow you to pull your funds together with other investors and purchase a basket of stocks, shares, bonds and other investment instruments.
- Exchange Traded Funds (ETFs). A basket investment instrument.
I have to tell you, friend, that of all these I only recently started a stocks and shares portfolio; and it is a big experiment the progress of which I’d share with you.
Why not dabble with the rest?
Because, I believe that ‘traditional’ investments share the following problems:
- High entry costs: there are different costs involved in traditional investing, but the main would be knowledge and capital.
- Volatility and unpredictability: I don’t need to tell you much about this one. Only in the last five years, the stock market crashed twice and the property market once.
- Returns depend on cycle: If you were in your thirties when the stock market crashed last you’d be fine; but if you needed to draw your pension then, you are truly and royally screwed.
This is why I favour a bit less ‘traditional’ forms of investing. These include:
- Our Nutmeg investment. Although my account is not doing much at the moment it is still over what I put in; John’s Nutmeg ISA account is still approximately 6% in profit. (He’s promised to analyse why this happened, and we’d let you know.)
- Buying Internet businesses. Yep, I did this one, and when the time if right, I’ll probably do a bit more of it.
- Investing directly in local businesses: I’ve already told you about this in other posts. But I’m not sure you’ve heard the latest: we are the proud co-owners of a car maintenance garage. And I have very high hopes for this one.
- Investing in self: I know this one sounds a bit naff. Still, I count this as a very important investment, including attending courses, buying books and using the time to learn.
And before you ask, an investing genius, I’m not. Some of my investments work out, and some fail rather spectacularly. For example, my shares in Tesla are doing great (and I did buy them at the end of February which was just in time); my shares in SolarCity are dragging my whole portfolio down.
But you know what?
When my investments work I’m pleased because my money has made me a bit of money. When they fail I’m truly happy because this is my chance to learn; so, my money will make me a lot of money.
You just have to remember that investing is no rocket science and the main thing, as with life, is to be open-minded and ready to learn.
#3. Expand your knowledge about investing and helpful resources
Investing may be a unique mixture of science, art and gambling but when making a decision you still need to know a lot.
Even when you are keeping it simple by investing with Nutmeg (or Betterment which is its US cousin) you need to do your homework. But this is easy: just visit their websites and read all that is on them. Oh, and you can Google them and see what else is knocking about.
Investing in local businesses needs local knowledge. You may hear about opportunities in the local bar, or from your friends. What you need to know here is what the features of a promising business are and how to know it from a failing one. You may also start learning about turning failing businesses around; which means that you either have to understand the business or ‘get in’ with someone who does and whom you trust. (I know nothing about cars; it takes me a year to work out where to put the fuel. This is why, the garage is 50:50 venture with someone who knows everything about cars.)
The situation is very different when you start investing in stocks and shares. It took me quite a bit of reading and looking around to come up with the four key, in my opinion, resources:
- Investopedia: This site does exactly what it ‘says on the tin’ – it educates the word about finances. At it spans educational levels as well so you can use it even as a beginner.
- The Motley Fool: I love The Motley Fool and the readable investing articles it publishes. One definite advantage of this site, as compared to others, is the way in which their stock picking advice is organised: you can select the ‘package’ that is best suited to you and your needs. I, for instance, have joined the Rule Breakers (best stay true to my nature, I thought).
- This is Money: another favourite of mine. It goes much broader than investing and has this messy, disorganised feel about it (which I really like). Their analysis is usually spot on and their knowledge of all things money is undisputed.
- Modest Money Stock Wizard: my friends at Modest Money not only publish interesting and well-informed articles on investing and analysis of specific stocks but have also developed a potentially very useful tool. I’m still playing with it and learning what it can do but why don’t you join me? You can surely find the stock you are interested in, and a wealth of information about it, very fast; and in four different markets.
#4. Select an investing platform
You should do this when your mind is set on giving the stock market a go.
Sound trivial, but I’d guess that not knowing what to do is stopping a lot of people (if I were a bit braver, I’d say ‘a lot of women’).
I selected the investment platform I use – TD Direct Investing – by using this resource to compare what’s on offer.
Please make sure that you look at several platforms and select the one you feel comfortable with (I selected TD Direct Investing because of its relatively low fees and being able to trade US stocks and UK and European).
#5. Make investment fun and stress-free
Gamification is a great place to start. There are apps and tools that turn investing into a game with challenges, rewards, and progress tracking. Think of it as levelling up your financial future.
Set personal investment challenges and milestones, too. Maybe it’s reaching a certain net worth or successfully investing in a new asset class. Celebrate your small victories – they’re all steps toward achieving your financial goals.
Connecting with other investors can also make the journey more enjoyable. Share your experiences, support each other, and learn together. It’s like having a workout buddy but for your finances.
Lastly, practice mindfulness and stress-relief techniques to manage investing anxiety. Meditate, practice deep breathing, or take up yoga. Find what works for you, and remember, investing should be an enjoyable, fulfilling journey, not a stress-inducing nightmare.
How to Invest Money and Make it Fun: Embrace the Fear and Excitement
Hey, I get it. Diving into the world of investing can feel like jumping off a high dive for the first time.
You’re standing at the edge, heart racing, wondering if you’re ready to take the leap.
But guess what? You’ve got this! And you are not alone – you have supporters, companions and confidants.
Think about all that we’ve covered in this article. We’ve stripped away the confusion, learned the basics, and even discovered ways to make investing enjoyable.
With all that under your belt, you’re ready to crack the investing club wide open.
Remember, it’s okay to start small and take baby steps. Gradually build your confidence, and before you know it, you’ll make savvy financial decisions like a pro. The key is staying focused on your goals, learning, and embracing the uncertainty.
So, what are you waiting for? Trust yourself, have faith in your abilities, and enjoy the ride.
Now, conquer the investment world, one confident step at a time!
photo credit: un petit écureuil via photopin (license)
5 thoughts on “How to Invest Money, Strip Away Confusion and Make it Fun”
Great article! And you’re right about “never borrow to invest” although I have to say that one has been tempting to me – especially when you can get a second mortgage for 3-4% and invest that money at a potential 7-9% return. The risk is probably not worth it, but it can be tempting. 🙂
@Rob: Thanks for stopping by, Rob. I wouldn’t; take a second mortgage that is. It is not my ‘loss aversion’ speaking but I really don’t think that the returns are a sure thing. So, I’d agree with you that temptation is there but the the risk not worth it. (What I’d do is increase how much I make and use the increase to invest. In fact, this is what I’m doing – a specific income stream goes in the stocks and shares portfolio.)
My investing experience is still zero at the moment, since we don’t have such solid opportunities in my country (I don’t really trust our Stock Exchange yet). But I do try to learn as much as possible, so this article is clearly helping me understand this more and maybe get the courage to try investing as well.
I have invested a bit in stock and shares. Some have performed really well while others are lagging behind.
The biggest mistake I made some years back was borrowing morning to invest in a so called ‘Golden Opportunity’. It was one of the biggest mistakes I’ve ever made in my life, only because I was ignorant. Knowledge is key! Taking the time to read and learn without it you may lose your money.
I totally agree with your points!!! I have invested in binary option trading & have earned profits. It’s not that I have not faced loss, but it all depends on the asset in which you are investing.