You asked and they answered! The experts share their responses to your investing and making money questions.
Making money and investing it, is there anything else to personal finance? Ok, so maybe it’s a little too simplified but I love talking about making money and investing.
And I’m not alone. Investing and making money questions are some of the most popular on this blog and many others. Being so important, I wanted to see what other bloggers were saying about investing and making money to give you as many solutions as possible.
I reached out to some of the best personal finance bloggers I met at the FinCon financial bloggers conference last month to get their responses to your most common money questions. While many of the questions are similar, the responses are completely unique and a great way to get different perspectives on these key concepts in personal finance.
Don’t stop with your questions about investing and making money. Check out last week’s post where we surveyed the Top 10 Questions about Debt.
Most Common Money Questions: Investing
I’ve spent nearly a decade in investment analysis, mostly with large institutional firms investing pension assets and venture capital firms. I have a passion for talking about putting your money to work but the most common question I get is also the most important, “How do I get started investing?”
Check out these three answers to getting started and two more common investing questions.
John Schmoll Jr, Frugal Rules
The most common question I receive from readers is how to start investing. They're usually either overwhelmed, have little to start with or simply don't know what to do.
My most common response is directing them to look at their goals and to allow that to begin to dictate how and where they should invest. I explain that too often investors allow things to hold them back and the key is to start and keep it as simple as possible. Essentially, it's beginning that discipline of a long-term approach that's going to serve them best in the long run.
John is right on with the key being just to start and keep it as simple as possible. There are a million different reasons to put off investing but the longer you wait, the more money you miss out on from making money on your money. In fact, check out the affect when you start has on your investments in the graphic below. Don’t put it off any longer, start investing now.
Still not sure how to get started? Check out How to Start Investing and Why It Can’t Wait!
Matt Becker, Mom and Dad Money
I get asked all the time how to start investing. It's a big scary topic that intimidates a lot of people, and honestly I think many people just assume they're not ready for it. So the first thing I do is stress the importance of simply getting started.
For the first decade or so your savings rate matters MUCH more than your rate of return, so you really don't even need to worry about all the big scary decisions around how to actually invest. Just get started, saving as much as you can, and learn the rest along the way.
Most people don’t know this about investing and building wealth. At market rates of return, generally around 7%, your deposits into an investment account are actually a much larger portion of your wealth for nearly 20 years. The key to building wealth then isn’t so much about getting a high return but about consistently putting money into the account.
Paula Pant, Afford Anything
I'm interested in building passive income but I don't know how to start.
Passive income is the money you make from the seeds you plant today. So you need to start working on or investing in some of the investments that offer regular income. These are investments or work like:
- Rental properties
- Books, music or other works that pay royalties
- Peer-to-peer lending
In the beginning, you’re likely to see very little income from a lot of passive income investments and even more likely to spend a lot of time putting them together. Over time, the amount of work involved will decrease and the amount of money will increase.
I love passive income investing and have built a portfolio around real estate, stocks and bonds that are finally starting to spin off a good amount of monthly cash. It hasn’t been without a lot of mistakes and a ton of work. I put my experience into a book, The Passive Income Myth, so you wouldn’t make the same mistakes. In it, I detail my experience creating a passive income in real estate, blogging, stocks and bonds.
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Barbara Friedberg, Barbara Friedberg Personal Finance
I get two money questions about mutual funds quite often. How to choose Mutual Funds? There are so many to choose from and I don't know where to begin?
The simplest approach is to choose a few low fee diversified index funds. In fact you can be properly diversified with as few as 2-3 mutual funds. Vanguard has many low cost mutual funds such as the Vanguard Total Stock Market Index Fund Investor Shares (VTSMX) and Vanguard Total Bond Market Index Fund Investor Shares(VBMFX).
Andrew, Listen Money Matters
Should I buy a house? Yes, but not to live in! Buying rental property is the best method to generate passive income
Andrew hits on the old debate of whether your home is also an investment. While there are some great benefits to owning a home, you won’t see a high return after spending on maintenance, taxes and insurance. Rentals can be a great investment because you’ll be able to write off all your expenses and depreciation against any income.
Most Common Money Questions: Making Money
I love the making money questions I get from readers, not because as a way to make a little extra cash but as a way to share the secret to real financial freedom. Your side-hustle might start off as a way to make money but can quickly grow into a full-time job doing what you enjoy.
Check out some of the money question responses below for how to turn your hobby into a paying gig.
Holly Hanna, The Work at Home Woman
One of the most frequent queries I receive is … “I want to work from home. I've searched online, but all I seem to find is scams. Please guide me to finding a legitimate work at home job.”
I'll then ask them a few questions about their talents, training, and hobbies. You see, when you're looking for a work at home gig you need to be clear in your intent; meaning you need to slow down and take inventory before you begin your search. What are your passions, skills, and prior experience? Do you need health insurance? How many hours can you work? When you cast your net too wide, you fail to find the right job for you, because your search is not targeted.
Michelle Schroeder, Making Sense of Cents
The money questions I get most are about how to make money on the side on a busy schedule.
I believe that pretty much everyone can fit some sort of side-hustle into their life. Yes, it may be hard, but if you really want it then side hustling can be worth it. I recommend that a person wake up earlier, use time strategically, eliminate distractions, and more in order to be able to fit side hustles in.
It’s just as tough getting your side-hustle started as starting anything new. Somehow you’ve got to find an extra five or ten hours a week in a schedule that was already packed and you’re probably not going to make much your first year to motivate you to keep hustling.
But you’ve got to believe me when I say it can be the most rewarding challenge of your life. Turning your passion into something you get paid for is a great feeling and is the only way to be truly great at what you do. I’m actually finishing this post up on a Saturday morning before my wife and son wake up, not because I’m under a deadline to get it done but because I love writing and talking about money.
Nick Loper, Side Hustle Nation
The two questions I get the most are around ideas and time — ie. I don't have any business ideas and I don't have enough time! Because of that, I focus a lot of the content of Side Hustle Nation around productivity and idea generation. The truth is we're all dealt the same 24 hours in a day.
Barbara Friedberg, Barbara Friedberg Personal Finance
Personal finance expert Barbara Friedberg also helped out with one of her most frequent making money questions.
Readers often want to know, “What are Creative Ways to Make Money?” There are a myriad of ways to make money. My favorite is freelancing. Take a skill that you're good at and sell it to others. It could be teaching computers or teaching swimming. You're bound to have some sort of specialized skill to market on Craigslist. Or you can always sell your stuff!
Joseph Hogue, PeerFinance101
I get the ‘where to begin’ question a lot in making money as well. You’ve got to start with what you do for fun, what you do as a hobby. Doing something you enjoy means the extra time you spend doing it as a side-hustle won’t seem like just another job. I did a five-part series on ways to make extra cash, exploring four popular strategies and a collection of other ideas.
You might not earn much starting out or be able to charge the same rates that the professionals make but you’ll be surprised how quickly that changes. Do anything for a while and you’ll create a skill. Do something you truly enjoy and you’ll become a real professional.
Looking for ways to build your side-hustle skills? Check out courses on Udemy, the only video course site. Score a new skill! Get any course for $19!
Did we answer a few of your investing and making money questions? One of the opportunities in these roundup posts is that it helps you find some great resources through some of the best minds in personal finance. Share your investing question below and I’ll check it out with some of the experts.
About the Author
Joseph Hogue is a financial expert and investment analyst. After serving in the Marine Corps, he started his career investing in real estate before becoming an investment analyst for some of the largest private investors. He's appeared on Bloomberg and on CNBC as an investment expert and has published ten books in personal finance. Now he helps investors reach their financial goals and invest in the stock market with some of the same advice he used when working for the rich.