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Now that we understand the basics of investing, let's look at what to invest in and how to do it.
Note: many investments are inaccessible to most people. For example, if you want to invest in a hot new tech startup... you probably can't, unless you're an accredited investor and have all the right connections in Silicon Valley. In this class, we will focus our attention on investment vehicles that are broadly accessible to almost anyone, anywhere in the world.
The generally most accessible investment vehicles are the following:
- Stocks/equities/shares (different names for the same thing)
- ETFs (exchange traded funds), index funds
- Commodities, forex, options, futures...
- Bonds, savings accounts
- Real estate
Investments I Don't Recommend
Out of these, here are the ones I don't recommend:
- Commodities, forex, futures, options: these I don't recommend because of the difficulty level. You can make money here, but it's a very tough game.
- Bonds, savings accounts: not recommended because the returns are so low that they basically aren't worth it.
- 99% of crypto projects/coins: crypto is an amazing opportunity, but the vast majority of projects are trash and won't be around even a few years from now.
- Penny stocks: same reason as above - penny stocks theoretically have more potential upside than stocks of larger, more established companies, but it's not worth the added risk.
A brokerage account is what gives you easy access to investing in stocks, ETFs, and index funds. Here's what I recommend:
Step 1: Choose the Right Broker
There are many brokers to choose from - and the available options are different in each country. So instead of making a specific recommendation, here's what I'd look out for:
What to AVOID
In case you're wondering: yes, I'm calling out Robinhood with those last few points. Robinhood is the original "disruptive" broker app and they have quickly racked up a long list of offenses against their users. Avoid them - and the many copycat offers that have appeared - like the plague.
What to Look For
Step 2: Signup for a Free Tradingview Account
Tradingview is an excellent one-stop-shop for all the charts you could ever want. It lets you check the price development of pretty much any tradable asset.
And you you use it completely for free: sign up for an account here (scroll down to pick the "try free basic" option)
I recommend that you have a play with this and explore some of the historic price movements of different assets you're interested in.
Step 3: Dip Your Toes In
Once you've signed up & gone through verification with a broker, you can now buy and sell stocks...
...and you'll probably lose money!
In the next lesson, we look at why that is and how to avoid that. It's good to be cautious when it comes to investing. But you can also be too cautious.
When you're new to this, it can all seem foreign and complicated and that can keep you out. I recommend that you get familiar with this world by putting a small amount (some amount you don't mind losing completely) and making a purchase. But some stock of a company you like and see what happens!
Allow yourself to become an active participant in this world and do it playfully, with a very small sum. The best way to learn is as an active participant. As you learn more and you get used to it, you'll be able to make decisions about how, where and how much more money you want to add.