Introduction to Simplifying Finance: Getting Started Understanding Investing

If you’re anything like me, you’ve been interested in investing at some point but always ask yourself “where do I start?” This was a major problem for me when I first became interested in the idea of multiplying the money I earn at work through investing. In fact, I didn’t even know what a portfolio was. Does this sound like you? If it does, don’t worry, just keep reading this finance blog for beginners and you’ll learn!

I’m not a CFA or a CPA. In fact, I’m not even studying finance in school. Instead, I’ve been able to teach myself the principles of investing and use the resources provided by others to enhance my knowledge. I’m confident that I will be able to help people like myself by sharing this knowledge and providing DIY finance advice to the average person.

So, one summer I decided to commit myself to learning about finance so I would be able to invest my own money. At first, I had no idea where to start. I read an investing in Canadian stocks for dummies book and it helped(?).

But what really helped me was my persistence. I trudged through the dry finance books that everybody (including myself) recommends and tried to make sense of what I was reading. Attending university at the same time also helped, as I was used to nonsensical, overly-complicated, academic writing.

I also started listening to some great podcasts like the Money Tree Investing Podcast, the Value Investing Bootcamp Podcast by Nick Kraakman, and The Investor’s Podcast by Preston Pysh and Stig Broderson. If you do a lot of travelling by transit or you are an auditory learner, try swapping out your playlist for some of these podcasts, they help a ton!

Once I finally learned enough about investing that I was comfortable putting my own money away, I heard the same things over and over again from the people I talked to. “Aren’t you a little young for that?”,  “I’m going to wait to do that when I’m older and know more about it.”, “I wouldn’t even know where to start.”, “Be careful, investing is a gamble/I prefer to save my money and not risk it.”

These comments really made me think. Why do you have to wait to invest your money, isn’t it better to start now? If everything was easy to understand and available in one place, would more people be comfortable building their wealth?

After hearing these comments dozens of times, we created this website with the purpose of giving people like you a starting point. In addition, we hope to compile enough information to act as the reference point for any questions you might have.

Our goal for this website is to do all of this while putting it in the simplest terms possible, making it easy to understand. There seems to be a major complex in areas of study such as finance where writers think they need to write incredibly complicated sentences. Instead of this, we are going to provide as clear and as detailed information as possible. Since we are the geeks who enjoy reading this stuff, let us do the hard work and compile a huge resource of information that you need to know. Hopefully, you will be able to understand your money and investments without the need for a financial advisor with our help.

If you have some financial knowledge but don’t know where to expand on this knowledge; or if you want to know where you can begin taking things into your own hands, visit our resources page. If you would like to know more about who we are you can visit our about page here.

This is our first post  and we just wanted to provide a brief introduction as to why we created this site and what it’s for. In addition, this is the first post of a three part series explaining what a portfolio, a stock, and a bond are respectively.

The Portfolio

The very first and most basic thing you can understand about investing is what an investment portfolio is. When I first heard this term, I was struck with images of businessmen in suits carrying briefcases filled with important documents. If this sounds familiar then rest assured, it is a lot less intimidating than that.

An investment portfolio is defined by Investopedia as “a grouping of financial assets such as stocks, bonds and cash equivalents, as well as their mutual, exchange-traded and closed-fund counterparts. Portfolios are held directly by investors and/or managed by financial professionals.” Yikes.

To put that in simple terms, a portfolio is simply an umbrella term for all of the money you have designated to be a part of your investments. There are many different types of investments that can make up your portfolio. Some examples of these investments are stocks, bonds, ETFs, GICs (CDs in the USA), mutual funds, cash, and REITs. We will cover the rest of these investments at some point, so don’t worry about remembering that now.

Most investors recommend that you maintain a diverse portfolio. This is a short way of saying that your portfolio should be made up of many different kinds of investments to protect yourself against risk. Suggestions for diversifying your portfolio vary and are often percent based. How you determine the makeup of your portfolio is called asset allocation. As each investment is considered an asset, how you organize your money is your asset allocation. Also, there are certain types of investment accounts that are much better for your portfolio. We will explore this more in the future.

This post was meant to be an extremely basic introduction to the concept of a portfolio. The next post will focus on defining a stock and then we will get into the world of bonds after that. If you have any questions, comments, or concerns please leave a comment and I will get back to you. Also, join our insider’s list below to receive a cheat sheet I use every day when valuing stocks!

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    11 months ago

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