Investing is not something we've always been so familiar with. Even Warren Buffett started investing at the age of 11 (he started at a much younger age than most of us, maybe), he had his share of doubts and questions too. Even Robery Kiyosaki, the author of Rich Dad, Poor Dad even had many questions to both of his dads when he was wondering how could get rich. You see, even some of the most wealthy and the most financially successful people started with a bunch of questions. Newbies in investing and trading often have the most interesting questions.
But do you know that the questions you ask at the very first stage of your investment are the most critical and pivotal point of your investing path? These questions make up the most fundamental financial decisions as the first step often leads to the others as you progress towards your financial investing journey. Question like how much should you invest, what funds to invest in and where to invest are just some of the most vital questions that every person who wants to get started with investing.
Now that we understand the importance of asking questions, we also need to understand the importance of stop asking the wrong questions and start asking smart questions because these questions are the most essential pieces that will lead you to a much clearer path of investing. Asking silly questions may get you in trouble (or your portfolio) and simply wastes your and the person you ask's time.
I may not be a finance expert, I still consider myself a newbie actually. So it surprises me when people really take some time to ask me questions about investing. While I try my best to answer the most questions I could, I feel that some of them either aren't really necessary when you're investing. Below are just some of the newbie questions that I think may not be completely wrong but could be improved when you really want to make intelligent decisions.
1. How much would I gain every month if I invest?
While we understand that the interest that will be gained from the investment may be important since we're investing so we could earn more, I think the question should be more focused on your personal risk appetite. That way, you may learn how to better control your investments and trades. Also, when you're investing in the stock market, you can't really predict as to how much you will gain the next hour.
2. What stock should I buy?
You would say that it's an important question. Well yes it's an important question to ask yourself but not just anyone whom you try to consult - whether paid or not (especially if not paid). When I wanted to jump into the stock market investing bandwagon, I made friends with people who were long been trading so I could solicit tips and rumors. It worked fine for me as I've managed to find friends who were patient enough to share some of their stock picks with me.
However, in the long run, the system just wouldn't work. If you're a newbie, you need to establish your own investing strategy so you will have a better foundation and understanding of what you're doing and not just depend on someone else's. That way, your financial decisions would become more responsible and solid as you get a better understand of your accountability. It feels so much better when you know you've chose the right stock because you had the fundamental background of why you did and not just because a colleague encouraged you into it. You will become more confident and independent. And that's where learning comes.
When we start asking the right questions, we easily get across to the right answers and the financial journey becomes more fulfilling and more meaningful. Let's start asking smart questions today!