Investment checklist

Blog March 2024

For beginners

A simple way to start investing the healthy way. Here is a beginner’s guide to investing before you start your investment journey.

Start investing today!

Oftentimes, beginner investors just start investing from day 1. While that might yield some good returns, never start investing with a high-flying stock.

There are certain lessons you need to be prepared for before you learn how to be a good investor. Here are a few tips on investment for beginners.

Clear bad debts

Bad debts are unnecessary expenses that are not ‘needs’ but ‘wants’ that pose financial struggles like buying a new flat-screen TV when you already have a perfectly working one. Or it could be an unhealthy loan that charges more than you would typically make by investing.

It doesn’t make sense to invest in 10% return vehicles if you have a loan of 12%, you are literally leaving money on the table. Pay them off the earliest, particularly credit cards as they charge the highest interest in the shortest amount of time.

Setup a rainy-day fund

Anything can happen – good and bad. You can’t completely control what happens, but you can be prepared for the worst. Be it, layoffs, natural disasters or another pandemic like the COVID-19, be financially ready with a rainy-day fund.

The rainy-day fund needs to last at least 3 months and should accommodate all your family members’ basic needs. Store the fund in a risk-free medium, say a savings account.

Learn investing basics

You are all set to step into investing, but you are not ready to invest yet. You must know the word ‘investment’ from every direction first. Start from the basics of investing, asset classes, and skill yourself up to do fundamental analysis, technical analysis, and risk management on most if not all of the asset classes.

I would advise going above and beyond on one or two investment niches of your liking/understanding to establish it as an active part of your portfolio.

Analyze your financial situation

Sit down and work with the numbers. Take into account your regular expenses, maintenance, cash inflow, projected expenses and arrive at a monthly number on expenses and savings.

This will help you find your investment capability and risk capabilities which are essential to finding an investment strategy.

Identify your investment needs

Most beginner investors do the mistake of going with the trend and fail at reaping the best benefits of investing. While going with the trend can make good returns sometimes, you might not get the expected yield at the right time.

So, identify the needs of investment like university tuition fee in 5 years, retirement in 30 years. This will help you find the right investment medium and strategy.

Find an investment strategy

Now with all our findings of investment capacity, risk capability, area of knowledge, investment needs, and timeline, come up with an investment strategy that fits you the best.

You don’t have to choose a predetermined investment strategy. No one size fits all, come with a mix of investment strategies that work best for you. Risk factors can be balanced across the portfolio by diversifying the investment across the asset classes.

Choose your investment

Find the best investment types, asset classes, and medium of investing for your investment to go. Then start with the analysis of the asset and evaluate all the possibilities. This could be exhaustive and tedious work, find help from the experts.

Build a watchlist

When you have chosen your investments and are ready with the money, it is time to invest. But not right away. Long-term investments like real estate and pension funds can be started immediately. But fluctuating assets like stocks can wait if you are expecting a dip in the coming months.

Keep track of the latest events, news and be ready to drop in the money whenever favorable.

Invest

Finally! It’s time to invest. Start investing in assets of your choice and keep a track of their performance periodically. Stay on the wiser side about the fees/commissions you pay on your investments. Find the least expensive exchange/vendor to invest in as a fee difference of 1% can make a huge difference in long-term investments. However, its very important to evaluate real estate investment opportunities before making a decision.

Invest regularly

We are not done yet! Investing can be interesting before you start. But will look dull and underwhelming as a beginner as you don’t see many returns right away. The best investment is the longest one managed efficiently.

Commit yourself to invest regularly for the best results. For example, regularly investing in a 10% Interest scheme for 30 years will be 7x the principle.

Invest in Real Estate the Easy Way!

Investing time along with the money is not everyone’s jam. Some don’t have the time, interest, or both to spend. They can invest in actively managed funds like mutual funds, and real estate investment funds.

We at GCG real estate have an interesting offer on real estate investing where we make up to 100% ROI by doing price arbitrage within 24 hours.

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FAQ

Any questions

What is affordable housing?

Affordable housing refers to housing units designed to be accessible to low- and moderate-income families, typically costing no more than 30% of their gross income.

The definition of “affordable” typically varies depending on location and income levels but generally encompasses rent or purchase prices that don’t exceed a certain percentage of a household’s income.

What is Section 8 housing in the US?

Section 8 is a federal rental assistance program in the US run by the Department of Housing and Urban Development (HUD) that helps low-income families and individuals afford decent and safe housing in the private market. 

The program provides eligible households housing choice vouchers that cover a portion of the rent directly to the landlord, with the tenant paying the remaining amount. Property owners who participate in Section 8 agree to rent units to qualified individuals and families at a rate approved by the program.

How can I invest in Section 8 housing?

There are several ways to invest in Section 8 housing:

  1. Direct ownership: You can purchase a property approved for Section 8 and rent it to a qualified tenant using a voucher and receive rent subsidized by the government.
  2. Real estate investment trusts (REITs): REITs pool investor funds to purchase and manage income-producing real estate, including affordable housing.
  3. Limited partnerships: Limited Liability Companies (LLCs) offer another option for investors to pool resources and invest in affordable housing projects.
What is the difference between multi-family and single-family properties?

Single-family property: This refers to a standalone house or unit designed for and rented to one household.

Multi-family property: This refers to a property containing multiple dwelling units, such as a duplex, apartment building, or condominium complex. Multi-family properties offer the potential for higher rental income but typically require different management strategies and considerations compared to single-family homes.

What is the difference between buying and flipping houses?

Buying and holding: This involves purchasing a property to keep it as a long-term investment, generating rental income and potentially appreciating in value over time.

Flipping: This involves buying a property, renovating it to increase its value, and then selling it quickly for a profit. This is a more hands-on strategy with higher risks and rewards compared to buying and holding.

How much do I need to start investing in affordable housing real estate?

The minimum investment required varies depending on the chosen method. Direct ownership typically requires a higher initial investment for the property purchase, and renovation up to Section 8 standards, while other options like REITs might have lower minimum investment amounts.

Do I need to be a US citizen to invest and own the property?

No, US citizenship is not a mandatory requirement for investing in affordable housing in the US. However, specific restrictions or regulations might apply depending on the investment method and your residency status.

It’s crucial to consult with a professional to understand the legal and tax implications for non-citizens.

Do I need to pay US tax as an overseas investor?

This depends on the type of investment, your residency status, and any applicable tax treaties between your home country and the US.

Consulting with a tax professional specializing in international investments is highly recommended.