Beginner’s Guide to Investing

A few months ago, while I was busy attempting to survive a workout without the promise of donuts afterward, I had been talking to my brother about investing. I asked him about what he was doing, who he was using for his retirement savings, and generally attempting to strike up conversation on our two different strategies when he suddenly asked me if I would be willing to invest for him. And while I was flattered that he would trust me with a good portion of his earnings, I was also caught off guard. In fact, I believe my immediate response was, “what?”.

You see, over the handful of years leading up to that conversation, I had spent hundreds of hours diving into any book, podcast, YouTube video, or broker tool that I could get my hands on in order to teach myself how to invest. Whether that was “The Intelligent Investor” (Amazon link), “Think & Grow Rich” (Amazon link),  or various instructional videos by famous YouTubers, no stone was left unturned. Any piece of information that I didn’t know could potentially hold vital knowledge to my success in the new endeavor. And I had assumed that anyone else out there who had parents like my brother and I, who weren’t very savvy with investments would have done the same.

So naturally, once my thoughts had collected themselves, I asked him if he’d be willing to sit down with me and I could teach him everything I had learned. My thinking was that it would provide a lot of quality time and I was eager to share what I had picked up. But that question was not well received. He became a little agitated and asked why I wasn’t willing to simply take his money and do it for him. After all, it was well understood that I’d shown a history of success with our own investments and that our track record had come from many hours with my face planted inside a book. And my brother was not surprisingly unhappy about the idea of having to do that himself or even spend a fraction of that time learning about it when he could simply lean on me and avoid it all together.


His response made for a very good argument. Why learn something that could take a good chunk of time when you could simply allocate that task to someone who has already done it? It wasn’t anything different than the way big businesses that I had learned to examine under a microscope operated. Each one, if they had the ability to do so, created departments that specialized in different areas to ensure that they made the most accurate decisions when questions pertained to their area of expertise. Or, if that was too expensive, they simply sublet that work to an outside company.

But for some reason it didn’t sit quite right with me. I quickly turned him down with the excuse that I didn’t want to be responsible if he lost money. And I wasn’t lying when I said it. Time had taught me that even with all the information I had picked up over the previous years of experience, there were still investments that just didn’t quite pan out. And that sometimes left me staring at the ceiling in the middle of the night unable to sleep. The thought of having that experience amplified by the knowledge that I’d not only lost money for myself but also for a family member that I cared about petrified me.

The conversation ended but my thoughts on it didn’t. Weeks went by and during that time I found myself in seemingly the same conversation with one of my close friends. Then a few more weeks went by and I found myself in the same conversation with another one and another after that. In each of those discussions, the topic would always appear to shift away from them learning how to do it themselves to simply hiring someone to do it for them or announcing they’d learn about to it later. Regardless of my prodding into the subject, the excuses continued to flow.

But why? I couldn’t understand the apprehension and it bothered me to no end. Why didn’t people want to learn how to invest for themselves? Was it the time commitment? Was it the fear of losing money? Or was it simply that they didn’t know where to start or how long it would take to actually start seeing results?

Today, I want to touch on the last of those questions – where you would start and how long it could take to see results. And I’m happy to tell you that the answer is much less loaded than you’d think. Let’s jump in:



Investing is simple. At its core, it’s simply the act of taking money, time, or whatever you have and placing it somewhere that you hope it will grow. On Wall Street, it’s no different. You take your money, you find a company that you see growing in the future, and you buy their stock with the hopes that it will become more valuable in the future. If it does well, the price goes up and you can cash out with a monetary gain. If it does poorly, you can either hold out and hope it comes back up or you can cash out for a loss and try better next time.

It doesn’t have to be more complicated than that. But it can be if you’d like it to be.


When you’re trying to figure out where to start, it’s best to keep it as simple as possible. The road ahead can be a bumpy ride. You could quickly make bad moves and land yourself in a Nicolas Sparks level tragedy. Slow and steady wins the race when it comes to learning how to do something right.

The first step that I recommend everyone take is to make a test portfolio. This will be a collection of companies that you feel right now, without any prior investing knowledge, might be worth investing in. To do this, you can simply visit any of the major stock tracking sides: Yahoo Finance, Google Finance, MorningStar, or others and look up the prices of each stock. Write them down on a spreadsheet or piece of paper and pretend that you just bought into those companies. You’ll want to make sure to note the current price, the company name, ticker, number of shares you’d probably purchase, and the date that you “purchased” that stock.

Over the next few days (or weeks/month), return to the financial website of your choice to track what happens to the price of stocks you chose. Take the price that it currently trades at (the new listed price) and subtract your original purchase price from it to see if you made a profit or if you would be taking a loss. Once you’ve done that, add up all of the profits and losses of your test portfolio and see how you did overall.

By doing this, you effectively get to test the market on the investments you would have chosen. However, you don’t have to feel the aches and pains of losses that a new investor might experience if he or she was actually financially invested in the outcome. And sometimes, those can be some big hits. In fact, during our first year of investing, I made a mountain of mistakes. Between chasing penny stocks (cheap stocks that almost never recover in price), placing money into businesses that I didn’t understand, and listening to poor sources online, the losses came quick.

This can all be avoided by having a test portfolio and it requires zero prior knowledge on how to evaluate a company. Simply choose companies you’d like, or ones you think might become more valuable, and start tracking.


Seeing your wins and losses is great. But what comes after you’ve seen your results? The next step is to look at any trends in the stocks that you picked. Pay specific attention to the stocks that you lost money on and try to find out what went wrong to cause the drop in price. Did they come under fire with bad media? Did they have a poor earnings release? What happened? Can you figure it out?

Seeing how your losses occurred, in my opinion, is the most important step for any investor.  If you can find ways to make sure you seldom pick a losing stock, the chances of your overall portfolio seeing a positive gain are much higher. That’s why it’s one of the cardinal rules that billionaire Warren Buffett follows: never lose money.

But how will you know why the stock dropped if you’ve never learned how to invest before? That’s where your investment education comes into play. Those financial websites I told you about earlier (Yahoo Finance, Google Finance, etc) are also great sources for information on companies. They’ll list social news on stocks, historical pricing, earnings dates, dividend dates and much more. Search those sites up and down and if you can’t find the reason why in those sites, branch out further with a quick Google search.

After you’ve done that, you’ll probably find yourself more than just a little confused. Between the wealth of information available, the analyst recommendations, and bogus news, you might not know who to believe or what matters. This leads me to my next point.


Every investor has their own style for choosing stocks and those styles typically evolve from how they translate available information. Some investors find that trading stocks only around an earnings release is the way to make money because they can trust (for the most part) the financial sheets that are released by the companies they’re interested in. Others find that the financials don’t matter as much as social signals such as buying a stock when that company has some bad press about a product line that ultimately has little/no effect on future profits. Regardless of which direction you go, as long as it leads where the profits are, you’re probably doing something right.


When it boils down to it, however, it’ll be up to you to pay attention to fluctuations in prices to track your style’s performance. Each time a swing occurs in one of your stocks, try to find out what caused the change and how you could use that to your advantage in the future. Learn to read how the media affects stock prices, how to read financial statements when they’re released, and what each metric released means. In time, what you pick up will translate into your own way of picking stocks.

Then it’s all about finding better ways to find more knowledge to better your performance even further.


An investor is nothing without a flow of knowledge. Whether that be in psychological factors and how they influence stock prices or how company metrics propel profits, every successful investor must dedicate themselves to growth by absorbing as much information as possible. That means spending more time with books, videos, connecting with successful investors you know, and other avenues that could serve as a source of learning.

Some of my favorite sources of investment education have been from:

But those are just a handful that I found most helpful. There are mountains of good (and free!) resources out there where you can further your investment knowledge.


Investing is not rocket science. Virtually anyone can figure out how to do it and anyone can learn how to do it better. It can be as simple as you want or as difficult as you want. The most important factors are managing your losses and developing your own style of stock picking around a winning set of criteria that you’ve developed through prior testing.

It should, however, always be remembered that the market can be one heck of a demon. One day it can produce amazing results that generate unbelievable gains. Other days it can make you swear you’ll never invest again. Understand that like any skill, the more experience you gain, the greater your chances of success. But no amount of skill or prior track record can eliminate the potential for losses in the future. That being said, never invest what you couldn’t stand to lose.

Let me repeat that. Never invest what you couldn’t stand to lose. As soon as you hit the purchase button to commit real money to a stock, you need to accept that the entirety of that money could be gone in as much time as it takes you to blink. Additionally, and almost as important as the previous bit of information, never place all your money in one basket. Diversification is the bread and butter of every winning investor. Whether that’s across multiple sectors, companies, types of investments, or in cash, just make sure it’s not all in one place.

And with that, we’ve reached the end of this soapbox investment talk. If you’ve enjoyed this read, consider sharing this article with your friends and family. We’d really appreciate it.

Until next time,


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