What the F*ck Is Investing?: Investing for beginners

By Alastair Dorsett

Do you want to be in a position where you are financially independent, able to support yourself and your family without relying solely on the income from your job? 

 

This is a common aim for a lot of people but most who do manage to achieve this don't achieve it until later in life when they are too old to fully enjoy it. Some people never achieve financial independence and end up relying on their work for the rest of their lives.

 

The way to achieve this is simple. Spend less than you earn and invest the difference.

 

This book will show you how. It will give you some really easy, practical methods of reducing your outgoings that you probably haven't thought of. It will show you how you can go about safely investing the money you save to bring you closer to your financial independence.

 

The stock market is often called the greatest opportunity machine in the world. There are millions already making passive income by investing in the stock market. However, for beginners with small amounts of money or no money, it can be difficult to know where to start.

 

This is where this book comes in. It is written specifically for beginners with easy to understand explanations and diagrams.

 

You will learn:

• The seven types of income 
• The power of compounding 
• How to cut through investing jargon 
• How to value investments and companies 
• Goal setting, financial planning and risk 
• How to read financial statements 
• Investment strategies
• Asset allocation 
• Types of investor 
• Types of investment 
• How to free up money to invest 
• How to avoid costly money mistakes
• How to make a trade
• How to choose a broker 

It's entirely possible for anyone to become financially independent with a little bit of knowledge and discipline. Take your first step to building that knowledge by reading What the f*ck is investing?

• Language: English
• Publisher: Alastair Dorsett
• Release date: Jun 1, 2021
• ISBN: 9798201538125

Book preview

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Disclaimer

The information contained in this book is not intended as, and shall not be understood or construed as, financial advice. I am not an attorney, accountant or financial advisor, nor am I holding myself out to be. The information presented in this book is not a substitute for financial advice from a professional who is aware of the facts and circumstances of your individual situation.

I have done my best to ensure that the information provided in this book is accurate and valuable. Regardless of anything to the contrary, nothing in this book should be understood as a recommendation that you should not consult a financial professional to address your particular circumstances. I expressly recommend you seek advice from a professional before making any investment decisions.

What the f*ck is investing?

Copyright © 2021 by Alastair Dorsett

All rights reserved. No parts of this book may be reproduced without written permission except in the form of brief quotations for critical articles and reviews. For more information go to www.wtfinvesting.com/contact

Table

of Contents

Introduction

Chapter 1:

Get your house in order

Chapter 2:

The seven types of income

Chapter 3:

Investing basics

What is an investor?

The power of compounding

Types of investment

Chapter 4:

Valuing investments

How to value a company

What’s in a financial statement?

What terms do I need to know?

Valuation methods

Comparable method

Discounted cash flow (DCF) analysis

Considering the strategic position of company

Key points to remember

Chapter 5:

Investment strategies

Value investing

Dividend investing

Growth investing

Goals, Risk tolerance, time horizon

Asset allocation

Chapter 6:

Put it all into practise

Tax efficient accounts

Standard investing accounts

Contract for difference (CFD) accounts

Practise money account

Providers

Making the trade

Closing remarks

About the author

"Someone is sitting

in the shade today

because someone

planted a tree

a long time ago"

Warren Buffet

Introduction

What would you do if you were to win the lottery tomorrow?

Would you get up, get dressed and drive to work? Would you clock in and carry on working? Or would you call your boss and say you won’t be in today… or ever again?

Who wouldn’t want the option of giving up the rat race and doing something they really enjoy?

Unfortunately winning the lottery is almost impossible and so it probably isn’t going to ever allow you to do that!

If you dream of quitting your job and doing something more fulfilling, you are not alone. We are taught that we should get an education, get a career and then work for forty years. We do this just to build enough of a pension to retire. You spend your best years working in a job you probably hate so you can quit it when you are too old to do anything else.

The problem with relying on a job to become financially independent is this; in your job you get paid based on how many hours you work. Your capacity to make money from your job is directly linked to the number of hours you can work. The number of hours you can work is fixed. You cannot create more time and so relying solely on your job limits your ability to make money.

Fortunately, there are things you can do now to achieve your own financial independence much earlier than you might expect.

All it takes is a change in your thinking. You need to remove that link in your brain between your time and your money.

The way to do this is through investing.

Your capacity to earn money from investing is unlimited. Most importantly, investing allows you to earn money passively without having to actively work for it. You really can earn money while you sleep!

Whilst it is easy to say Just invest your money, you might not have disposable income to invest. Even if you do, you might not know how to invest it. The world of investing is geared against individual investors; it is made to look more complicated than it actually is.

In the following pages, you will learn everything you need to get started in the world of investing. You will find easy to implement tools and strategies that will help you manage your money better and improve your decision making. This will ultimately help you carve your path to financial independence.

The first step to financial independence is in your hands right now.

Think of it this way; what if you were allowed to make just ten investment decisions in your whole life?

You would more than likely become very wealthy.

Why?

Because you would read every single book and resource about investing that you could. Investing a couple of hours in a book would be absolutely insignificant in comparison to the money you can gain by being more informed, making better decisions and not losing money.

Chapter 1:

Get your house in order

Learning and implementing good financial habits in your life is the first thing you need to do if you want to reach your financial goals. There is little point in investing your money if you are paying interest on debts at the same time. Equally, you will never be able to invest money if you spend every penny you earn. Most people think they need to earn more money to become wealthy. Whilst that certainly helps, being more disciplined with the money you do earn can actually be just as powerful. It is one of the few things you can do that is in your direct control. You can’t easily control whether you get a pay rise but you can certainly control what you do with the cash you already earn.

Small steps achieve big goals

When trying to achieve a goal that might look complicated or time consuming, a good strategy to employ is to simply take small, regular steps towards that goal. Trying to do too much at once can often lead to becoming frustrated or burned out. Nothing worth achieving happens quickly and gathering knowledge is no different. If you want to get in shape, going to the gym once for an hour will not get you there. Similarly if you want to be a successful investor, researching investments for one hour will not make you successful.

The best way to succeed in either goal is to make a habit of regularly working on the goal. If you want to get in shape, working out three or four times a week over months or years will move you towards that target. The more workouts you do over more time, the better shape you will be in. The same is true for your financial success. If you spend small amounts of time researching, learning and planning regularly, you are much more likely to find good opportunities and make good decisions.

The desire to get rich quick clouds judgement and this leads to making poor decisions and losing money. If the average investor put the same effort and thought into picking an investment as they did for a house or a car, the average investor would achieve much higher returns.

Another problem is that most people simply aren’t taught how to manage their own money. It is something most of us are not taught in school. Take the following steps to