This is the sixth in a series of eight articles expanding on the steps of the article:
8 Steps to Build Wealth
Step 6: Learn About Investing
With the basics solidly grounded in steps 1 through 5, step 6 is meant to push someone from a path of adequacy to a path of excellence. Most responsible people follow the first five steps in their lifetime, and their reward is that they achieve financial flexibility and abundance throughout their lifetime and get pretty good chances of retiring comfortably, contributing to causes they are passionate about, and providing those they care about with good opportunities.
But by not learning to invest on their own, they’re not really in the wealth-building mindset. Most wealthy people don’t become wealthy without understanding what builds their wealth in the first place. Instead, they take a sharp approach towards learning and growing. The first five steps may seem like a low risk path, and in some ways it’s true, but on the other hand, by not becoming educated in finance and investing, one opens their self up to lose money due to things they don’t understand.
These days, most people are specialists. Most people don’t know how to obtain their own food, don’t understand much about the technology that allows them to live like they do, and don’t understand much about the finances that are supposed to be there to secure their future. Now, I’m not saying one needs to know all of this, but it helps to try to grasp a lot of what affects us and resist the urge to become over-specialized, especially in the area of finances. It’s not a good thing to hand over your life savings to others to manage without having a solid understanding of where your money is, why it’s there, what it’s doing for you, and what the risks are.
I personally think it’s a good idea to use a retirement account when available, but to also invest on my own in individual stocks with other money alongside my retirement account. I like to know what companies my money is in, and why it’s there. I also like the passive and fairly dependable income stream that dividends provide.
So how can one start learning about investing? Well, by visiting this site of course! I provide this website to share information about investing and to provide dividend stock investment ideas/summaries. Here is the primary site resource for investors:
Of course, not everything you need to know is here, and this is a work in progress. In addition to this site, there are a variety of other sites out there that provide good information when it comes to learning how to invest. Search the internet for investing basics and pay some attention to financial news (but take it with a grain of salt), and over time, your knowledge base will grow. Check out some of my links around my site to other financial sites, because a lot of them are excellent resources.
There are also several books out there that teach one to learn how to invest. My most recommended book is:
The Ultimate Dividend Playbook
Really what it comes down to is that you have to want to learn and you have to go through with it. Information about investing is easy to find all over the internet, but it takes some time to read through a lot of it, filter the good information from the poor information, and organize it into frameworks to understand the larger picture.