Q&A - How to start investing with limited capital?
Yesterday, someone posed this question to me - “How can I start my investing journey right now I have limited capital mainly from saving my job and borrowing from my parents but I want to pursue investing going forward but the thing is that my style of investing is majorly long term where I will not have anything to do most days apart from reading plus capital will be a major concern?”
The question here can be broken down into two parts:
- How to start investing with limited capital and
- What to do daily so that I can improve my skill as an investor?
Most people start with limited capital unless of course, they have an inheritance or family portfolio to start with. And in a way, I think it is better to start with a small portfolio because it ensures that the early mistakes don’t cost us a lot.
The main focus at the beginning of your investing journey should be as follows:
- to try and understand your own mindset - what kind of stocks and businesses you prefer
- how you react to adversities and triumph (that is when a stock you hold goes down drastically or goes up a lot)
- how much effort and time you are willing to put in and
- how much actual skill you have in the art and science of investing
You also need to focus on earning from your primary occupation and saving as much as possible. There are no shortcuts to this.
Please remember that investing can make one very rich. Thus it is not easy or else everyone around would be rich, but that is not the case, right? It requires a lot of skill, luck, perseverance and effort. You can only become successful if you truly enjoy the pursuit and the journey and not get fixated on the destination.
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