How To Learn About Investing

Introduction

Investing can be an intimidating topic. Between the depth of the topic and the sheer amount of educational content available, even getting started can feel like a big ordeal.

But once you get over that initial hump, it can be surprisingly simple to learn about investing. Especially if you’ve found a method that lines up with your learning style, schedule and other factors.

Why Learn About Investing?

There are a few reasons you’d want to know a bit about investing. For starters, investing is a common way to build long-term wealth, so having some familiarity with how it works can potentially help you reach your financial goals or boost your bottom line in the long run.

Beyond that, some knowledge can help you avoid early mistakes that could waste your time or money, since you’d be starting on the right foot. For example, knowing which kinds of investments best match your financial goals and timeline.

And this isn’t specific to investing, but learning before engaging with something can help you make informed, confident decisions. So if an investment opportunity comes up, you can better identify whether it’s right for you or not. You probably won’t feel pressured, experience FOMO or have second thoughts about your decision if it came from a place of knowledge.

As they say: Knowledge is power.

How Investing Works

Most of the time, investing means buying an asset with the intent of that asset increasing in value or generating some income. Investing can earn more money than putting your funds in a savings account, but it is riskier.

Some of the ways people invest include purchasing real estate to rent out, putting money into the most profitable parts of a business, or buying stocks and bonds.

And just like investments come in different forms, the possible returns can take different forms as well. For example:

• Assets can grow in value, like a stock that goes up in trading price or a house that’s been fixed up to sell.

• Assets can pay dividends or interest. Some stocks entitle shareholders to dividend payments from the company, while bonds are repaid to purchases with interest.

• Assets can generate income. A rental property or a business can be an ongoing source of income.

Investing can also benefit from compound returns, where your investment produces earnings, which can be reinvested and generate earnings as well.

But remember, investing comes with more risk than savings. Assets can go up or down in value, as can their income-earning potential. It’s entirely possible for an asset’s value to fluctuate significantly, even over a short amount of time.

So if the value of investments can be volatile, why invest in the first place? Because even with day-to-day fluctuations, an asset’s overall value can still go up in the long run.

Part of investing involves weighing risk versus reward. That’s why it’s is often treated as a long-term endeavor and a common piece of advice is to diversify your investments.

Ways To Learn About Investing

If you’re committed to learning more about investing, you have several options that could match your learning style, schedule, budget and more.

In-person investment training options

If you do your best learning in person, you may have quite a few options near you.

• Workshops and seminars hosted by a local bank, credit union, or investment firm branch

• Seminars and courses at your local community college or university’s continuing education department

• Workshops at your local library

These in-person options might be free or paid. For example, a bank or investment firm may have beginner classes open to the public, but reserve advanced topics for customers.

Free online courses and resources

There’s a lot of free investment information available online, but it’s important to be aware of potentially misleading or outright wrong information.

As a beginner, stick to trustworthy sites from known institutions and note that many of these providers offer both free and paid content. 

• Knowledge bases on major investment firm websites

• Trusted, investment-focused educational websites, like Investopedia or Home | Investor.gov ’s Introduction to Investing.

• General education websites with free content like Coursera, Udemy and Khan Academy

• Finance news sites like Yahoo Finance, Investor’s Business Daily and The Motley Fool

Live online investment training

Online resources often come in the form of pre-recorded videos, presentations or text readings, but live courses are common as well. This combines the convenience of online learning with the hands-on benefits of in-person learning.

Online brokerages and some of the free providers above also offer webcasts or virtual workshop options, which may be free or paid.

On-demand investing classes

Many of the options above have paid, on-demand content libraries beyond their free content, like Investor’s Business Daily and education sites like Coursera or Udemy.

Local universities, and sites like edX from Harvard and MIT, might also offer investing classes on-demand.

The paid content on these sites can sometimes be more advanced, so they may be a good next step after you’ve gotten your bearings initially.

What To Consider Before Choosing a Learning Method

You have so many options for learning about investing, which is great — but it could also be overwhelming. You’ll want to consider a few things before choosing a learning method.

First off, what’s your time commitment like? How much time do you have and what is your availability? If there’s a great in-person course in your area, but it comes with a long commute, online might be better.

What’s your familiarity with finances? If you’re a total beginner, would you benefit from some other courses or reading first? If you’re an intermediate investor, what is your specific goal?

What’s your learning style? Think about how readings, lectures, video, audio and collaboration each make you feel.

And finally, are you looking to stick with free options or are you willing to pay? There are a lot of free resources, but deeper dives can cost money. This is an investment in itself — and a good one, if you develop some profitable skills out of it.

How To Start Learning Today

There are actually a few ways to start learning about investing before you attend your first class or watch your first video. And the nice thing is that many of these also work as a good way to supplement your learning as you go, too.

First, make sure you’ve covered some of the basics of finance. Dive into some more Keys to Credit articles or visit the local library to read up and establish a solid foundation first.

Then, start following the financial news. This regularly exposes you to many of the concepts you’ll be learning about. You don’t have to grasp it all immediately, but over time you’ll start to understand and make better connections.

One interactive option is to open a demo account (offered by some brokerages) or download a “paper trading” app. This is basically virtual trading — you aren’t spending any real money, but you can see what the real results of your financial moves would look like.

Overall, you want to build up your knowledge over time, so you can be a well-rounded, confident investor.

Bottom Line

Learning about something new can be intimidating, especially when it’s a potentially complex topic like investing.

On the one hand, the number of learning options available can be overwhelming at first. But that also means that you’re more likely to find an approach that works for you.

Then, it’s just a matter of time and effort before this once-intimidating topic becomes a familiar concept.