If your goal is getting income from online investing, starting this new activity can be very daunting. But if you understand the risks and have some funds to allocate specifically for this, you can invest money online safely and possibly get a decent income.
When it comes to investing, people pursue different goals: financial stability, independence, or prospects of a better future. After all, everyone dreams of becoming Warren Buffett, who makes $188 a second!
What is investing?
Before diving deeper into the world of online investing, let’s first cover what the term actually means.
Investing is a process of buying and selling assets (investment instruments) to receive income or any other benefits (like knowledge or connections).
The higher the return on investment, the higher the investment risks!
These days, most investing activities take place online. This allows people to manage their investments from home or at their favorite coffee place. Doesn’t that sound exciting?
Who can invest money online?
One of the biggest problems beginner investors face is the lack of knowledge about starting the process, let alone managing a portfolio. Another important consideration is that investing requires some capital that you can afford to lose. Lastly, people without sufficient experience don’t fully understand the risks.
So, before you learn how to invest money online and earn, make sure you have the following:
- A reliable connection to the internet
- Fundamental knowledge about economics
- Enough capital for investing
- Enough resources to lose some of your funds (due to inherent risks that most investors have to deal with)
- Mental and emotional stability
- Reasonable decision making
Main steps to start investing money online
Investing is not a game of chance, and it’s something you should take very seriously. Below will be general instructions that you should follow as a beginner online investor. But keep in mind that these steps may vary depending on the platform and type of investing.
This is a simple but extremely important plan for anyone interested in how to invest money online and get a profit (potentially):
- Get your finances in order.
- Set a long-term goal.
- Choose a strategy.
- Choose assets you want to invest in.
- Get access to your chosen markets.
- Keep a record of all your investments.
Top 5 ways to invest online
Online investing comes in many different forms, some of which will be described in this section. The list includes the most popular ones currently.
Cryptocurrency is a virtual currency that doesn’t rely on banks to verify transactions. At this point, you have probably heard about it.
A lot of people choose crypto as online investments because it’s pretty straightforward, although it may not seem so at first. A few tips:
- Think carefully about your investment plan.
- Choose the right investing strategy (e.g., buying and selling cryptos on exchanges).
- Stay away from new and unknown cryptocurrencies; stick to well-known, reputable ones.
- Follow the basic safety rules for online investing.
- Websites and Domains
Beginners have the option to put their money into websites and domains, which often turns out to be quite lucrative. It can grow from generating a couple of bucks to a full-on extra income source.
There are many options to choose from because the number of websites grows each day. However, not every site will be suitable for this. If you’re interested, research more about the criteria for choosing sites and domains, especially from the perspective of making money from them.
- Precious Metals (Most Commonly, Gold)
Gold is considered a reliable commodity to invest in. It has been a popular choice among investors and their safe haven for many years.
This kind of investment is often offered by online payment systems. Before making the purchase, ensure you choose a reliable platform that has a solid track record in selling precious metals.
Here are some of the options to buy and sell gold:
- Purchasing gold in bars or coins through an online or local dealer, collector, or pawnshop
- Trading gold futures to speculate on the price
- Purchasing an exchange-traded fund (ETF) that tracks the commodity
- Investing in stocks of gold mining companies
- Buying gold mining EFTs to get exposure to the biggest gold miners in the market
This type of online investing can be extremely profitable. But when you invest in a company with a new idea, it can also be extremely risky.
Here are some important considerations about investing in startups:
- A startup might need money at each stage.
- Investors can be involved in the development process.
- These investments can be quite different in terms of capital requirements.
- Investors can become co-owners.
- Shares on Stock Exchanges
Many companies list their shares on the stock exchange for other people to buy. Essentially, you buy a stock certificate — a document that confirms the right to own a part of the company. If you want to invest money online, it’s probably the most beginner-friendly option, although it still requires plenty of knowledge, time, and effort.
There are two main ways to get profit from stocks:
- Buying low and selling high
- Buying a stock and holding it to receive quarterly dividends from the company
A few downsides to be aware of:
- Long-term commitment
- Foreign stocks can be inaccessible
- Requires a thorough understanding of the stock market
Mistakes beginner investors make
Almost every beginner online investor is bound to make a couple of mistakes. Here are some of these mistakes you should try to avoid:
- No financial cushion
- Starting without a goal or purpose
- Missing good opportunities
- Ignoring commissions
- Misunderstanding risks
- Making only short-term investments
Any investing venture starts with getting as much information about it as possible. Hopefully, this article explained the basics, and now you know how to invest money online safely.