Five investment tips for beginner investors

Here are five tips to start your investing journey.

Tip 1: Become more financially literate

Unlike years ago, you now have dozens of easily accessible tools and resources that make learning about investing simple, affordable and convenient. For example, you can sign up for a short course with a financial education provider like Worth, who offer practical personal finance courses online. (In fact, Discovery Bank clients can sign up for one of Worth's online Money Coaching^TM courses through the Discovery Bank app at a fraction of the usual price.)

Growing in knowledge in this area can help you become more discerning about your options and give you the confidence to capitalise on good investment opportunities when you spot them. So it's a good idea to spend some time improving your basic financial literacy.

Tip 2: Find a financial adviser who meets your needs

A big part of becoming financially savvy is understanding the value of professional advice. A certified financial adviser or planner is trained to help you navigate your finances holistically and achieve your financial goals over time, through a long term relationship of trust and growth.

This tip is so important that we've devoted a whole article to it. Read about why paying for sound financial advice can be one of the best investments you ever make.

Tip 3: Start saving now for the day you want to retire

When you're younger, you have the potential to benefit from many years of compound interest. Watch this video to learn why compounding over time is so powerful, and why starting to save for retirement as soon as possible is worth it.

The simplest way to start is to contribute to an employer sponsored retirement plan. Perhaps speak to your human resources representative at work to find what retirement benefits (if any) your employer offers, and how you can best take advantage of them.

You can also start a retirement annuity in your own capacity to help secure your financial future. Discovery Invest has a variety of retirement saving options that can help you maximise your savings for the day you're ready to retire.

Tip 4: Invest towards specific goals, and invest more over time

We know that we generally ought to save and invest more, but this can seem like a vague and distant aim. Try taking the time to write out what you hope to accomplish by investing.

Short term financial goals are things like, "I want to invest R400 a month towards an overseas holiday or a deposit on a car in two years." Long term financial goals are things like, "I want to invest R1,000 every month to start my own business or help fund a house in 10 years." You'll be more motivated to achieve your goals when you know what you're working towards.

Another good idea is to increase your savings over time, as you start earning more. When you get promotions or bonuses at work, see how much of the extra funds you can funnel into your investments. This can help you accomplish your financial goals faster.

Tip 5: Realise that financial health is holistic, so look after yourself

No matter how young and fit you may be, an unexpected health event can happen to anyone. Lifestyle habits that you have today could lead to chronic health conditions that start to eat up your life savings. In fact, you can generally expect that the older you get, the more of your budget you may need to allocate to healthcare expenses.

Suitable medical insurance and life cover can help protect against accidents and tragedy, but it's wise to live responsibly so you're less likely to need them. Consider being more active, eating healthily and not smoking or drinking excessively help protect yourself from 'lifestyle diseases'.

Starting to invest when you are young is one of the biggest favours you can do for your future self. If you want to start but are unsure how, why not contact a financial adviser for advice and get a realistic, comprehensive plan that you can follow? With professional advice and smart money choices, you can lay a strong foundation to build the financial future you dream of.