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How To Start A Successful Investment Portfolio



For someone outside the world of finance and investment, it is likely that the players on the money markets will come across like liquid cash giants. 

Understanding and getting started in market investing, and building up a viable portfolio is reasonably accessible for the average person.

Whenever considering investing a portion of savings or excess cash into the stock market, it is important to establish some ground rules first. 

The most important of these is that it costs more to borrow money than to save it. 

So clear the decks on all outstanding debts

It cannot genuinely be called a profit if there are still any lingering debts that will be expecting an inflated payback.

  • Having emphasized the need for any first and small time investor to be in the black, it is necessary to calculate how much of one’s salary should be freed up for market speculation. There are two types of thought on this from the experts in the field.
  • Take the first step, even if it is a small one, to investing in the markets as soon as one can. The reason being that the faster one dips one’s feet in the waters of the financial world, the sooner one will become accustomed.
  • Never invest in the markets, no matter how tempting the environment might be, until one is in the position to safely lose the amount invested without undue strain and stress if such an occasion arrived.

Finding the right investment strategy for your portfolio formation is a personal choice.

There are several ways for the average investor to take the first steps into the market.

The route which they take will usually be defined by the amount of money they have available for investment purposes.

Some basic understanding of the market is vital to the beginner. 

Once a degree of expertise is reached and the amount to invest chosen, there are different investment portfolio options to review. 

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Here is an overview of some of the basics:

  • ETFs – As seen in the graph below, an Exchange-Traded Fund tracks a commodity bond, grouped asset, or index, as a marketable security. These are a slightly higher risk but desirable when you want to reduce high fees or frequent taxable events.
  • Another small fee choice is a DRIP or Dividend Reinvestment Plan. This is when one can invest in shares of a company’s stocks, and the dividends are reinvested to reduce fees.
  • Index funds are a form of a mutual fund but broaden the performance and exposure without culminating in more fees. Unlike a DRIP service, the profits made are freed up as cash.
  • If the goal is something more flexible, one can tie up profit in a Certificate of Deposit to ultimately expose one’s portfolio. This is smaller in growth but less risky in the long term.
  • Treasury bills can also suit this investment method.
  • Non-professional investors can form a crowd funding concern or club. The borrowed amount is loaned from non-accredited investors and the profits in interest are shared.  5% to 8% is the average annual return but can increase if borrowers are more high-risk and pay more interest.

Although most private investor amounts are not enough to buy an investment property, if the amount is around the $5000 mark, it can be added to a real estate holding’s company in two ways:

  • The REIT or Real Estate Investment Trust. This allows the small investor to benefit from the performance of the property in the form of annual dividend payouts.  There are higher fees paid when the REIT is non-traded.
  • Another investment option is crowdfunding in the real estate sector. After much deliberation from the SEC on the JOBS Act regarding Title III, this platform is now able to use both non-accredited investors and accredited investors.  An entry level amount is set at US$5000.

Taking these first steps is the easiest way to understand the investment market to ensure a successful portfolio when you decide to enter the market.

Too much caution is not always necessary. 

Taking into consideration fees and returns are important when gauging the profitability of the outlay.

The market is for anyone who wants to optimize excess cash after learning basic investment practices. 


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