Is it possible to achieve simplified investing?

 

Learning how to invest can be difficult. There is a lot of information to learn about, a lot of different concepts, vocabulary, and markets to learn about. However, is it possible to achieve simplified investing? Absolutely. The question then becomes “how do you simplify investing?” and “how do you invest in a simple way?” How can you learn investing in the simplest way possible?

When people first begin to learn about investing, it is likely that you are overwhelmed with the wrong information. You are given enough information to be dangerous, as they say. You learn how to open a brokerage account and how to buy, but after that it goes downhill. Most new investors will be swamped with stock picking tips, technical analysis, and dreams about becoming rich. This type of information will not make anyone a great investor.

 

What Information Should A New Investor Ignore?

 

If you want to develop a simple investing mindset and learn how to simplify the investing process, you should be aware of the trouble areas. You need to know where many new investors get snagged so that you can avoid the metaphorical quick sand. So, what areas should a new investor ignore while learning about investing? Here’s some common areas.

 

Suggestions, hottest picks, list of best investments etc

 

It is extremely easy for a new investor to get stuck in the idea of looking for the best investment, investment vehicle, or the best of anything. There are thousands of videos available that can easily consume hours upon hours of study time and offer no real value. The videos discuss things like the top stocks to buy, or the top 5 cryptos better than Bitcoin. It’s not that these videos, blogs, books, or social media posts are bad, but they distract from real learning.

Avoid spending time watching these videos when you first start learning. You would be better spending this time watching real educational material rather than watching this type of content. This does not mean that this content is bad. You may decide to use videos like this as part of your analysis before buying. However, these videos will not teach you how to sell. If you do not understand investing, you will lose money. So, focus your energy on learning how investing works rather than focusing your energy on stock picks. I promise you this one tip is the most effective way to learn investing in a simple way.

 

Bouncing Between Styles and Investment Vehicles

 

If you want to simplify the investing process and the investing learning process, you first need to know what you want to do. You need to have a strong idea about your goals before you begin. Do you want to actively trade? Do you want to be a long term investor? Which investment market interests you? There are no right answers to these questions and there is not a single best investing style or market. The best place to invest is the place that you’re most excited about. This is how you will remain consistent and succeed. If you would like to learn more about picking an investment vehicle or style, read our article What is the Best Investment Vehicle.

Too many people, when they first begin learning how to invest, go way too broad. They learn a little about foreign exchange, then they learn a little about commodities, then they learn a little about the stock market, and so on. This becomes extremely confusing. What works for one investment vehicle and style does not work for another. For example, It would be silly to apply day trading strategies to jewelry. Imagine walking into a jewelry store, buying a piece of jewelry and paying the premium on it, then immediately walking back in to sell it back. You would lose money! Yet, this is how most people learn investing. Simplified investing is targeted investing. Know what type of investing you want to learn and focus on that.

 

Unhelpful Knowledge

 

This error is one of the most difficult. It is difficult to know what is helpful and what is not helpful when you’re first starting out. It is not uncommon to spend time learning about something to find out that it has very little value. In a way, you can think of this as paying your dues, or becoming a knowledgeable / well-rounded investor. However, spending time on non-helpful content can be a big time waster. It is best to avoid this if possible.

How can you avoid this? There’s no perfect way to avoid learning things you’ll never use. However, there are some things you can do to decrease the amount of wasted time. I would suggest 2 guidelines to help you protect your time while learning how to invest.

1. Study from trusted sources. Would you rather study from the very best or someone barely making it? A trusted source will be more likely to focus on material that actually matters and makes a difference.
2. Use study resources that have a study plan attached. This means that the step by step process of learning was decided as part of the product and you’re not learning random things. For example, a book is written in a logical order taking you step by step through the learning process. A course is designed to teach you step by step. You begin with basic information and move to advanced concepts. This structure is a very helpful tool to protect you from wasting time. In contrast, if you’re jumping from video to video, or blog post to blog post, you’re likely working without a structure. This will increase your potential for learning irrelevant information.

 

Simplified Investing Conclusion

 

Do you want to learn investing in a simple way? It comes down to having and developing a simple investing mindset. A simple investing mindset will allow you to focus on what is absolutely essential for learning the skill of investing. Focus on the skills, techniques, and concepts required to invest. Narrow down your focus on the style and investment vehicle you want to learn. Also, find a structure to follow. These will help you save time.

As a side note, if you want to become a great investing student, follow the structure of the book or course you’re reading, but use non-structure content such as articles and videos to supplement the topic you’re learning about. For example, let’s say you just finished reading a chapter in a book about investment history. You can dig into this topic in more detail outside of the book. This is how you become an expert. You do more than what is expected.

Simplified investing really is possible, just remember to keep the process simple. Don’t over-complicate the learning process. This reminds me of a popular phrase known by the acronym KISS, “Keep it Super Simple”. This phrase applies perfectly. The simpler you keep it, the better you’ll be. Simplified investing comes down to keeping it simple.

 

Resources

 

Get Connected

• • If you have enjoyed this article, you can get alerted to new articles and exclusive information by joining our email list. You can access this through the pop up on our home page. (You’ll also get a bunch of free stuff.)
  • If you would like to keep learning, check out more of our articles!