How to Get Started Investing in the Stock Market

How to Get Started Investing in the Stock Market
What steps do you take when you want to start investing
into the stock market? With so much information available
and so many investment options to choose from, what do you
do first?

Step 1:

You need to evaluate your current income and expenses to
determine the available discretionary income you have at
the end of the month. Discretionary income is income that
is not allocated towards household expenditures or to any
other scheduled payment. (i.e. loans, credit cards)

Step 2:

Now that you have decided what amount you can invest on a
monthly basis, you need to consider what goals you are
going to invest towards. Most people don't just invest for
the sake of investing; they have a list of targeted goals
that they are trying to achieve. Do you want to build up a
cash reserve? Do you want a new car? Do you want to buy a
home? Do you want to buy a 2nd home or a piece of
investment real estate? Do you want to save for your
children's education? Do you want to save towards becoming
financially independent? When working towards achieving a
goal, the goal needs to be defined as with a time frame and
an amount.

For example: Buying a new car is not a goal. Buying an
$27,000 new car by June 2009, is a goal as it includes a
time frame and an amount.

Step 3:

The time frames for each of your goals will determine the
type of investment choices that you should consider. Short
term goals should be invested in more conservative
investments, while those with 10+ years can afford to be
invested into more aggressive investments. Choose your
desired investment allocation based on these targets and
time frames.

Step 4:

Set up an automated payment plan from your paycheck or
directly from your bank account on a monthly basis. This
system will allow you to pay yourself first and to begin
moving in the right direction for your overall goal of
wealth building. Talk to your present employer, an
investment institution and your current bank about
available investment options and automatic savings plans
that you can enroll in. You often can start an automated
payment plan for as little as $100 per month. While this
will not be enough to secure your retirement, it is an
affordable option to start building your wealth.

Step 5:

Begin investing and set up regular monitoring points every
3 months so that you can check the progress of your
investments, and to make any necessary portfolio changes.
Add more to your monthly payment plan whenever possible and
if you receive any bonuses, consider directing all, or a
portion of those dollars towards building your personal
wealth.

To start investing in the stock market is a simple process.
Make the decision to start, evaluate your goals and
options, and take action.

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