How do Beginners Learn Investing?

Are you just getting started learning about investing? If so, you may wonder what to expect from your studies. While no two programs provide the same content, there are several core skills and tools most learners can expect to encounter as they build an educational foundation in finance and investing. Beginner-level coursework typically provides an overview of basic investing practices, including how to work with stocks and bonds, financial statements, mutual funds, and valuation. These concepts will provide a foundation on which other financial competencies can be built. Read on to learn more about the first steps you’re likely to encounter when studying investing, as well as the tools and training options available for beginners.

Getting Started with Investing

If you’re new to investing, you may wonder what skills would be useful to have before you embark on coursework. Learning to invest can be a challenging, albeit rewarding, process for most learners. Acquiring some basic skills can make it much easier to learn investing principles. An understanding of basic financial literacy terms and practices is a common prerequisite. Additionally, experience with setting goals and knowledge of financial concepts like rations are other beneficial skills that can make it much easier for individuals to learn investing.

Basic Financial Literacy

Learning how to invest isn’t a stand-alone skill; individuals must have basic financial literacy as a foundation. The five basic principles of financial literacy are earning, spending, saving and investing, borrowing, and protecting. Financial literacy includes being able to understand and utilize financial skills like budgeting, investing, and financial management. Those who are financially literate are better equipped to articulate and strive toward key financial goals, such as saving for college, preparing for retirement, tracking personal spending patterns, managing debt, and allotting the necessary funds to run a business. Most individuals can attain financial literacy through listening to podcasts, reading books or tutorials, watching short YouTube videos, speaking with a financial professional, or taking a beginner-level finance course.

Goal-Setting

One of the core competencies necessary to succeed in investing is an understanding of how to set attainable financial goals. These goals can be for personal finance, such as how to save for university study or how to prepare for early retirement. They can also be professional in nature, including how to help your organization establish a budget or invest in new technological initiatives. While it may seem easy to say that anyone can set goals, doing so in the financial arena can be more difficult, since it also requires knowledge of the steps necessary to help achieve these goals. 

A helpful practice for those studying investing is to break up their goal-setting into three categories: short-term, medium, and long-term goals. Achieving the goals in each category will require a unique approach and different steps. It also requires a solid understanding of how much risk is tolerable to achieve that specific goal. 

Financial Concepts & Ratios

Those who succeed in investing must have a working knowledge of many financial concepts and ratios. Even basic investment strategies, such as opening an IRA account, require knowledge about interest and its impacts over various time periods. No matter what form of investment you’re interested in, knowledge of financial concepts and ratios is essential because it can help you determine if a deal is a good one to undertake. Some common financial ratios that can be useful to learn before studying investing are profit margins, liquidy ratios, and interest coverage ratios.

The First Steps when Learning Investing

Once you’ve decided to learn investing, you may wonder where to start with your studies. Most programs provide learners with a basic overview of investing at the start of a beginner-friendly class to provide them with a foundation on which later concepts and skills can be built. Since investment can take many different forms, investing classes typically teach students the various types of investments they can make, such as bonds, stocks, and mutual funds. Participants also receive instruction about how various financial markets work, valuation principles, and what drives the movement of stock prices. Introductory-level coursework may also provide training on how to understand and create financial statements. Some programs use real-world examples based on publicly traded companies for students to use as a base.

Coursework that focuses on financial analytics may also provide learners with training in Microsoft Excel or other software that they can use for finance-related spreadsheet tasks. These courses typically offer instruction on how to work with formulas, functions, and formatting, as well as how to create charts, PivotTables, or financial models. 

Free Investing Tools for Beginners

If you’re just getting started with investing and don’t want to invest a substantial sum in your training, the good news is that free online resources, investing simulators, and on-demand classes are available.

Free Online Resources

One training option available to those who are just getting started with investing is free online resources like videos, tutorials, and blogs. These resources are a good option for those looking for an overview of the field of investing or who are interested in learning basic financial concepts and terminology. Many types of free online content are available, including written tutorials, short and long videos, and blogs. Learners can choose from hundreds of YouTube videos that cover introductory-level investing topics, such as compound interest and annual returns. Some videos require only a few minutes to watch, whereas others are longer and provide a more detailed overview of investing. Noble Desktop, an educational provider located in New York City, has a free Stock Market Investing Fundamentals webinar that takes an hour to watch and includes content on stocks, bonds, valuation principles, and the Capital Gains tax. This video is a great resource for anyone interested in learning about the principles that control and move the stock market. 

Free Online Investing Simulators

Those who want to experiment with investing before they do so with their own money can do so by using a free online investing simulator. Simulators provide a safe and risk-free way for aspiring Investors to learn different investing techniques without having to invest a penny of their own money. Some online simulators even use real market values to mimic the stock market. The more practice learners have with online simulators, the more prepared they’ll be to make sound investments when they use their own money.

On-Demand Investing Courses

In addition to offering for-pay courses, many top educators around the globe, like Udemy, Coursera, and Skillshare, also provide free on-demand investing classes. This type of training is a good option for those who have busy schedules and would find it difficult or impossible to attend live training sessions at regularly scheduled intervals. Because all on-demand content is pre-recorded and placed online, students get to determine their own learning pace. They can pause lessons, rewind them, or rewatch them in their entirety to ensure the concepts being presented have a chance to sink in. This flexibility also ensures that students can complete their investing training around work or professional commitments, as their schedule permits.

Coursera offers Fundamentals of Investing, a free course that includes four modules that cover introductory-level investing concepts like passive vs. active investing strategies and diversification. Udemy provides free on-demand courses that focus on providing novice investors with the strategies needed to help them make sound investments. They also have coursework on more specialized types of investing, including how to work with cryptocurrency. Informational content is also available for free from the Securities and Exchange Commission’s investor education and advocacy branch, investor.org. This page includes an overview of core financial concepts like savings and investment risk and return, and diversification. Because so many educators place free investing content online, learners can select the training materials that are most useful to them without wasting time on any irrelevant content.

Live Investing Training for Beginners

Free online resources like YouTube videos and on-demand coursework can provide a good starting point when learning investing, but these materials are no match for live instruction. While free resources provide a low-stakes way to get started learning basic investing concepts, these resources alone typically aren’t sufficient to provide professionals with the sort of financial training they need for their careers. Live online classes, such as bootcamps or certificate programs, are typically a much more pragmatic learning approach for those interested in learning investing practices and concepts to use for their own financial planning or for work-related tasks. In live courses, students complete coursework in real-time, either through Zoom or a similar teleconferencing platform or at a designated training facility. The instructor is available to share their real-world investing expertise. Students can ask questions as they arise and receive in-the-moment clarification and support. Those attending class remotely can even opt to share their screen with the instructor (with permission) for additional guidance. In addition to the support students receive from the instructor, those who opt for live training also benefit from learning alongside other students, which can provide an additional sense of support and community.

Even though live investing training is usually the most expensive training option, the additional financial commitment is worth it for most learners for several reasons. Live courses occur at scheduled intervals, and students progress through lessons at a pace that’s determined by the instructor and the curriculum. This means that those enrolled meet a predetermined learning goal before they move on to a new investing skill or concept. This structure not only helps students motivate themselves to complete lessons, but do so at a pace that’s often much faster than through self-teaching materials. Live training also helps students prioritize their studies over other commitments since classes take place at regular intervals, and an instructor is present to control the learning pace. The weeks or months students spend in class are all in service of acquiring the training students need to succeed professionally in finance-related jobs or to make sound financial decisions with their personal finances.

Another reason live investing coursework is a good option for beginners is that these classes often provide learners with more than in-class training. Those who enroll in certificate programs often receive additional support, included with tuition, that is intended to help them prepare for a career in finance. Some courses offer professional development incentives, including job interview prep sessions, resume feedback, LinkedIn profile reviews, 1-on-1 mentoring, or access to networking events. Self-teaching resources don’t provide these incentives for learners.

The Next Step

Once you’ve learned investing basics through free online resources or live coursework, you may wonder how you can take your training to the next level. Many top providers offer intermediate and advanced-level classes for those who want to build on their foundational knowledge of finance and investing. Some of these programs focus on a specific type of financial training. For example, students who are interested in accounting and corporate finance can take a course that covers financial modeling techniques, like how to work with Excel to create financial models. Advanced-level classes are also offered on topics like angel investing, in which students learn how to manage risks and make strategic investments.

Some learners may also opt to enroll in a program that progresses from introductory-level instruction into more advanced concepts over several weeks or months. Noble Desktop’s Financial Analyst Training Program provides learners with several weeks of live training in core financial skills to prepare for a career in corporate finance. Those enrolled receive hands-on training in how to create a valuation model for a public company, as well as the Excel knowledge needed to create financial models. This beginner-friendly program helps students progress from basic to advanced-level training to prepare for a career in a top financial firm.