The stock market has been a crazy place for a lot of people these days! That 401K is more like a 201K, or maybe even a 101K now, and people are afraid to lose more money. For a new investor this can especially be a scary thing! If you’re new to investing, you may be asking “how does the stock market work”. In fact, a lot of people that have been investing in the stock market wonder this also!
The reality is very few of us really understand the stock market. So many people saving in a 401K or IRA pick their funds kind of like playing Pin the Tail on the Donkey or Darts. Or maybe get their investing advice from a co-worker, friend or family member who doesn’t know much more than they do. All pretty random. You know this kind of person, don’t you? We all do.
Many times wanting to learn how to start investing in the stock market, is like putting the cart before the horse. Just like anything we want to do, we need to start with the basics, the fundamentals. It might seem boring, but without that, we will struggle or fail. There’s a process.
Let’s use cooking as an example:
1. Decide what you want to fix
2. Find a recipe
3. Make a list of ingredients
4. Go to the store for items needed for the recipe
5. Get the tools together to start the recipe – bowls, pans, measuring cups, etc.
6. Follow the steps of the recipe to mix the ingredients
7. Cook it for the recommended time
8. Serve the dish and eat
So what would happen if you skipped a step, or left out an ingredient? Maybe the dish would turn out ok one time, but that would be pretty random, wouldn’t it? It might have been a disaster. Try to make a cake and leave out the flour, sugar or eggs! Yuk!
Does this sound familiar? Personal finance works much the same way. Great news! There is a recipe for financial success.
1. Understand money
2. Respect money
3. Make money
4. Plan your money
5. Save money
6. Invest money
7. Grow money
8. Protect money
Skip a step and……well, it can be a disaster. Wouldn’t it be nice if there was a way to learn about investing, building wealth and creating financial independence? Well there is! Why not make it fun at the same time? You can! Playing a game can be a simulation of real life. It’s less painful and much easier to Play Your Way to Wealth! So have fun learning about money and investing, and begin to build the life of your dreams!
To your investing success!