I have been writing about how to achieve a debt free status for some time now and I wish you have already achieve your freedom day.
Now after re-establishing your finances I believe it is now time for you to jump into another phased of your financial life and that is from savings to investing.
I know you are already aware that the Philippines is taking the center stage as a new tiger economy and as called in the recent seminar being “A Bright Spot in Asia”. I also believed you are already intrigue about the latest craze of the town: Investing in the Philippine Stock Exchange. The year 2012 was indeed a stellar year for the Philippine Stock Exchange. In just a short period of time the PSEi rose from 4000 to 6000 and now in the first quarter of 2013 it is already at 6200 level. With that more and more Pinoy now are interested in stock investing.
For you who I believed is now at a stable financial status should also learn how to start investing in stocks. You are already aware that this blog is primarily for stock investing but I started the series about how to achieve debt-free status because how can you be investing if you don’t have free money to invest.
So now you are ready and you are wondering how to start stock investing?
I’ve listed down steps to do before you actually start investing in stocks(note that this steps are already discuss in this blog and will just be re-iterating for reinforcement purposes):
- Open an online stockbroker account
- Determined how much you will set aside for your stock investment
- Study the stocks you are interested to buy
- Ask questions if you don’t understand something about stock investment
- Practice stock investing using a simulated stock investing game
First Step: Open an online stockbroker account
Probably the first question that pops out is “why an online stockbroker account?” I have listed my reasons why should you choose online stock brokerage which you can read in full by clicking here but to cut the story short it is because it is cost efficient or in simple language “affordable” or “cheaper” and it is accessible.
You have to open an online stockbroker account so that you can easily access your account and transactions anytime, anywhere, and to some online stock broker you can place your order even if the stock market itself is still closed.
Second Step:Determined how much you will set aside for your stock investment
It is important to determine the amount of money you should invest in the market. Remember the golden rule that only free cash should be put in your stock investment. I have been telling this already that the money you put in stock should be something that you wont regret putting in case something went wrong. Thus in order to truly arrive at this you got to, on top of all the budgeted expenses and debt amortization you are paying, also set aside money for emergencies thus creating an emergency fund.
I know with all that you are already saying there will be no more left for stock investing. You are right but this is where determination comes in. You got to be decided and focus that such small money set aside will be useful in the future specially when the time comes that you are not able to work anymore.You got to have a figure in a piece of paper or in your mind so that every time you receive money you can decide how much of it is set aside for this specific purpose. I guess since you have already achieve debt-free status you can also achieve this.
Third Step:Study the stocks you are interested to buy
Of course you got to do your due diligence.
Again the best place to start is by checking the business section of the newspaper. If your office gets the daily newspaper make a quick browse of the business section to learn news about the stocks you are interested. Such news and info can also be accessed in your online stockbroker account(just to be safe do this during break, after-office hours, or at the comfort of your home).
If what you get in the newspaper is not enough then I guess you need to step up a little by reading materials about the stock you are interested like your brokers reports and in dept fundamental and technical analysis shared by our gurus in forums and Facebook groups(you can backread the one forum here or if you spend most of your time in Facebook check these group for more learning).
Fourth Step: Ask questions if you don’t understand something about stock investment
As part of the third step, it is important to have a correct idea of what you are studying of which it can only be made clear by asking. As a rule don’t be ashamed to ask questions if you really don’t understand. Post your questions in the forum or in a group and surely somebody out there will answer your questions.
If you are lucky enough join live seminars where the experts can truly answer your questions right away. Your online stockbroker might have live scheduled seminars which you can attend or you can scout around for affordable seminars and on-going guidance memberships like the Truly Rich Club by Bo Sanchez.
Last Step:Practice stock investing using a simulated stock investing game
Remember that once you place your buy or sell trades you are using real money that is why if you feel not that ready better practice with a simulated stock investing game like the PSE Stock trading game(click here to check this out).
As you play learn from it specially from your mistakes. Let it be a source of experience so that by the time you sure to start investing with real money you won’t have doubts or second thoughts when placing your buy or sell trades with your online stockbroker.