By Katie Gomez

Investing tends to conjure images of older men in suits analyzing financial statements or complex charts, driving people into the more exciting and risky avenues of making money (i.e., stock trading.) While dismissing investing as tedious is easy, there are ways to spice it up in a way that works for you. What if investing could be completely customized to match your interests, lifestyle, goals, and generation? What if it could align with your personality and open new pathways to a successful financial future? With creativity, you can make investing work for you regardless of your age, experience level, or even financial standing. 

That said, investing is a perfect place to start for those interested in dabbling in the market. Investing is usually seen as a more long-term focused financial responsibility, setting yourself up for the future. Conversely, stock trading is often painted as this chaotic, exciting rollercoaster with big wins and immediate gratification. Therefore, it makes sense why younger people are more drawn to stock trading. However, the seemingly dull act of investing is the backbone behind trading. 

Building knowledge of long-term investing strengthens the confidence, patience, and experience needed to succeed in stock trading. This article will highlight strategies to begin your investing journey in a customized way that aligns with your individuality and how to use it as a stepping stone to becoming a retail, swing, or even day trader. 

Dipping your toe in the investing pool 

Younger individuals have an unknown advantage as investors; even if they do not have much money or know what to do with it, their age is a superpower, blessed with the power of time. The key to starting is starting early to take advantage of compounding interest. This can look like as little as setting aside a few dollars per week you can put on your path toward long-term wealth. The cup of coffee method is an easy and efficient example of this; set up your bank to take out $5 (the cost of a typical coffee) from your checking account daily to put it into your investing account (or savings account if you have not opened an account or have a portfolio yet). 

The cost of contributing a few coffees per month to an investment account could add up to over 10, 20, or 30 years to build significant wealth. Retrospectively, it makes sense, but our minds have become so short-term focused that it’s becoming more difficult for our generation to justify actions that do not provide immediate gratification. That said, it often helps to find the short-term benefits of investing to keep our minds active and stimulated.

The youngest generation lives in the moment, embraces the unconventional, and remains adamant about paving a new path. However, without focusing on their financial future, they might find themselves without a safety net to catch them should that path lead to a cliff. 

Investing has an exciting potential to help newer, younger traders find their footing in the stock market and gain the confidence and experience needed to execute trades successfully. It enhances their pathway with freedom and opportunity well into the future by harnessing the power of their youthful, creative mind. The following will explore easy, tailored ideas for young investors to build wealth your way, regardless of how much or how little money you possess today. 

How investing sets you up with the fundamentals for being a successful trader  

Investing is the core of the stock market and one of the most accessible and compressive strategies for a lucrative future. However, it does not have to be your endgame regarding your relationship with the market. If you are interested in being a trader, investing will provide you with the building blocks necessary to execute intelligent, successful trades. A few of the significant trading fundamentals you can expect to gain from investing are listed below: 

1. It develops your financial literacy: As a new investor, you’ll research companies, study market trends, and learn investment terminology. This experience of absorbing information gives you a solid base of knowledge to draw on later as an active trader. The more you understand, the better trader you’ll be. 

2. Builds your capital base: Earning returns on investments means growing your capital. The larger your capital base later on, the more trading flexibility you’ll have to trade higher volumes and diversify without being hampered by limited funds. You can set yourself up with a sturdy foundation to build on throughout your investing journey. 

3. It teaches long-term perspective: The consistent effort will help re-wire your brain’s dopamine receptors to crave long-term gratification more than short-term and chase actions that help you achieve the former. Investing over several years for compound growth teaches patience and keeping emotion out of decisions. These are invaluable skills for thriving as a trader in volatile markets while avoiding panic selling and short-term thinking.

4. Allows practice without high risk: Consider investing as a practice arena for learning tricks and skills necessary for stock trading. Investing small amounts as a beginner lets you try different strategies and gain experience without taking on excessive risk without the added pressure and emotional attachment. You’ll find it easier to build confidence and skills over time.

5. Shape your risk tolerance:  As an investor, you’ll encounter market swings, losses, and gains. This helps you understand your ability to take on risk so you can tailor trading strategies later to your comfort level. After investing for a decent amount of time, you’ll realize your risk tolerance requires maintenance and may require an alteration against expectations you might have had before diving in. 

In conclusion, investing is not as dull as its reputation makes it out to be. Contrary to popular belief, investing and trading are not separate entities; one cannot exist without the other, although the latter tends to carry a more glamorous reputation. Overall, investing equips you with foundational knowledge while letting you grow your money measuredly. These skills and capital can then be applied to active stock trading in the future, setting you up for tremendous success by learning the ropes first. 

The equation to beating the stock market is a challenging code to crack, but the more time you spend investing, the more familiar you become with the market, making it easier to manipulate in your favor. So please don’t sleep on investing because whether it is used in conjunction with trading or practiced on its own, it is the key to a healthy and lucrative financial future.