How should you start investing? A very valid question and in this video we will go over everything you need to know!

First things first: we are talking about investing, not trading. Trading is buying and selling stocks within hours, days or maybe a few weeks. Investing is doing proper research, finding a company, index tracker, etc. you believe has a lot of potential for the long term and then buy and hold.

1. Backup fund
You have probably heard this a million times, but since we are investing (holding for a long time) we don't want to get into the situation where we have to sell off our investments, because we are running out of cash. So make sure you have about 3-6 months worth of all your expenses saved for a rainy day. Within 6 months you should be able to get your cashflow back up and running to ensure you don't need to sell your investments.

2. Never invest into something you don't understand
A lot of people will tell you to buy stock X or this crypto. And sure - they may be right - but don't just buy something because other people tell you to. Do proper research, understand where the upward potential comes from and if you agree.

3. Learn as much as you possible can about investing
Listen to podcasts, watch video's like these or read books on investing. The more you understand how this all works and how certain investment instruments work, the better the chances of getting a good return.

4. Choose a broker
A broker is a is a bank / company that allows you to buy / sell stocks and trackers etc. In general we want the cost to be as low as possible (the lower the cost, the higher the return), but be careful of why certain brokers charge nearly 0 fees. Are they loaning out your money to others?
Remember, we want to hold our investments for a long time, so I would rather pay $1 more and know my money is guarenteed and safe for the long run, then taking risk and saving out a few bucks. Do your research here as every country has different brokers.

5. Start investing in something simple
I believe just starting out it is best to start with something simple like Index funds. Index funds track a index (the S&P 500 for example), so you don't have to pick an individual stock, but just buy the average of all stocks in the market.
This way you will get used to buying and you see what happens when the market goes up, market goes down, when you get dividends, etc. Getting to know how this works and how it makes you feel is very important as investing is a lot about controlling your emotions.

6. Cut out emotions
Investing is all about making rational decisions not based on emotions. When you see your return drop like crazy like last March you may want to sell out of emotion. But you have to think first and ask yourself why is this happening and what will happen long term?
For me last March and April were amazing moments to add a lot to my portfolio, which resulted in a 20%+ return at the end of the year. I am not saying this is easy (seeing your portfolio being -20% is not easy), but you have to remove the emotion as much as possible.

7. Decide on your risk profile
What type of invester are you? Are you someone who doesn't mind taking high risk (with potential high rewards), or would you rather invest quite defensive and know that your portfolio will have a steady growth over time?
Once you have decided this for yourself you can decide how you want to be investing, how do you want to split your investment between index funds, individual stocks, crypto? Those questions can only be answered when you know what kind of risk you want to take.

8. Decide on your split
Based on your risk profile you can decide how you want to split your investmet. I am quite conservative, so I split my portfolio 1/3 cash, 1/3 stocks or trackers and 1/3 real estate, but that may be completely different for you.

9. Use Dollar averaging
Dollar averaging means you will buy at a fixed point every month (or every so many weeks). This way you will not have to time the market, but can simply get the average price of the entire year. Trust me, missing the three best days of the year will make a major impact on your return, so I would rather just buy at a fixed day every single month to get that average price.

10. Dividend
Dividend is an amazing thing, but you have to be aware why certain companies pay 6-8% in dividends. They do this, because they really need your money (why else would they pay this much?). There is nothing wrong with that, but it does mean there is a higher risk involved with these stocks compared to companies paying a 1-2% dividend per year. Again do your research into the company first, then see what fits your risk profile and then decide.

11. Compounding
Compounding is the best thing in the world :) It basocally means reinvesting your returns of the stock market (like dividends) into more stocks. This way you will start to make more and more every single year and it is the way to set yourself up for the long run.