3 Tips on Starting Small with Investments
Building a strong financial foundation for future investments
This week, I posted the following image on Facebook:
My first investment was a small one. It was a two-bedroom house in Portland, Oregon. At the time, it was a scary idea to purchase that property. It felt like I was giving up a lot to make that investment. In reality it was just a few thousand dollars.
That's the irony of the advice to start small when it comes to investing: when you're first starting out, nothing feels small, even when it is.
So, here's some advice on how to start small smart.
Take a deep breath
So the first thing you should do when you're getting ready to make your first or early investments is simply to take a deep breath and relax. Do your best to put aside how you're feeling and instead look at the facts. What is the real risk if the investment fails? Chances are, very little. Maybe you'll lose a little money and come out with some hard-earned lessons.
But what's the risk if you don't? You'll never grow, learn, or get closer to financial freedom. Which is worse?
Build your confidence
Another thing that can add to investing anxiety is to not feel confident in what you're investing. Do take the time to study and understand your chosen asset class. I knew I wanted to invest in real estate, so even though I was nervous about making my first investment in Portland, I wasn't worried about my ability to size up and find a deal. That helped a lot.
Think big even when investing small
I often tell people to start small with their first investment. However, let me be clear that this doesn't mean you should think small. Quite the opposite-you should think big when it comes to where you want to go and what you plan to achieve.
Once you've got your big audacious goal, break it down into smaller steps. Start with the smallest step. Keep moving forward, first with little steps, small investments, and then progress to bigger steps. As your experience and confidence grow with each success-and yes, even with the setbacks-you will get closer and closer to that big goal.
When I was buying the house in Portland, I knew that it was a first step in a much larger journey. I had grand dreams, but they started with 800 square feet. Today, I own thousands of apartments in Portland and beyond. It started with a small investment and a big dream.
So start small. But always THINK BIG!