Investing on your own behalf can be an effective way to grow your wealth, but it does take some skill. Diving into investing without adequate preparation and study can result in disappointing results and significant losses.
Mathematics from your school days won’t get you terribly far with investing. There are quite a few different types of investing, and some of the theory or principles behind it get quite complex. You’ll need to keep track of and calculate fees, initial investment purchases, any dividends or sales, and, when investing across borders in other currencies, the exchange rate.
If you’re investing in direct stocks or real goods, such as a whole real estate purchase, then your initial investing experience will be a bit simpler. However, compound interest and any mortgage or loans, letting income, renovation or maintenance investment, and ancillary costs such as insurance do complicate matters in the case of real estate. Other types of investing, such as commodity funds or managed futures, get increasingly complicated. There are also the tax implications. You will need to pay taxes on gains, but when you’re buying and selling stocks or making multiple investments over the course of the year, potentially through multiple sources, tallying the results correctly for tax purposes can be a challenge in its own right.
It’s important to prepare for success. Any investment must start with an initial sum for investment. It is possible to work your way up from relatively limited sums, but most investments do have a minimum buy-in. Particularly when you’re new to investing, it’s important not to invest more than you can afford.
You also need to assess your comfort level and capacity for risk. Investments vary by the level of risk (and potential reward or duration). You should start with lower-risk investments while you’re still learning, and be cautious about the sums that you invest.
While working your way up slowly and learning as you go is one approach, a more formal education in finance and a greater technical understanding of investing is invaluable in both increasing the success of your investing, and speeding up the timeline to moving from beginner to confident investor.
Depending on your level of commitment to investing as a path for your future, and your current schedule and demands on your time, there are a variety of educational options. For the busy student or midstream career professional, remote study and short courses, seminars or study intensives are a good way to gain skills without overloading your schedule. For the more committed and ambitious student, a full finance programme will build valuable skills that could contribute to success in investing, as well as competencies that could be useful in other areas of your career and life. LSBF offers students flexible courses and programmes that focus on relevant, practical and professional financial skills.
Fast-track your investment success by strategically acquiring professional-grade skills in financial theory and investment practice. You can slowly work your way up from smaller, simpler investments to more lucrative investing, gaining skills and experience as you go, or you can prepare to achieve success more quickly by dedicating time to formal studies in finance.