Investing is one of those skills, what you can always improve no matter how much you already know. Learning to invest also can have a very big return on investment. So, how long does it really take to learn investing?
You can learn the basics of investing and how it works easily in just a few hours. You can get started with investing with just that basic knowledge.
There are so many different aspects of investing that it is really hard to say exactly, how long it takes to learn how to invest, but you can get started knowing just the basics.
It is a common rule that to master something, you have to spend 10 000 hours learning and doing that. I think the same applies to investing.
How long does it take to learn the basics of investing and how to learn the basics of investing?
Like I mentioned before, the basics of investing can be learned in just a few hours. The basics of investing in my mind include knowing how stocks are supposed to bring in returns, and how businesses work and why they sell their shares.
William Ackman, the founder, and CEO of Pershing Square Capital Management, is on a video on YouTube, explaining how finance and investing work in under an hour. The video is 44 minutes long and it contains more information than one year of college in some metrics. Link to the YouTube video is here.
I would say that after watching the video and understanding how investing works, you have already achieved a lot of knowledge about investing. That is a good starting point to start learning more about investing.
Achieve deeper knowledge in the field of investing
After you have learned the basics of investing, you can start to learn on a more advanced level on how different things work. Don’t get me wrong, there is still a lot of basic principles of investing to be learned.
The good thing about investing is that you can focus on what you like. If you wish to be the best stock picker in the world, you can start learning about the valuation of businesses.
If you want to stick with index funds, you can on a more macro level, learn how economics work and that way gain a deeper understanding of the markets.
Research past market events, crashes, and bull runs, what caused them and how did the outcome happen. Internet is full of data on past market performance. Use it to your advantage.
There is also a lot of misinformation and opinions disguised as the truths. There are a lot of different factors that can cause big movements in the markets, don’t believe everything you see online.
One way to gain deeper knowledge of markets and investing is to read some of the classic investing books. A few investing book recommendations below. I have listed them in order I would suggest you read them.
- The Richest Man in Babylon
- Rich Dad Poor Dad
- The Intelligent Investor
There are a lot more, but reading those would be a good starting point. If you feel like you don’t want to read a whole book that takes hours, I have good news for you. There are websites and YouTube channels that make summaries of the books. I have linked them below as well. (Not sponsored).
Book summaries you can read in just 5 to 10 minutes: https://fourminutebooks.com/book-summaries/
Book summaries in video form, very easily explained: https://www.youtube.com/c/TheSwedishInvestor
Learn about different instruments
After you have some deeper knowledge about the markets, you could start learning about different instruments. Usage of leverage for example and shorting. Those things can be done with tons of different instruments, but they also come with increased risks.
Taxes on different instruments are different in different countries as well. If you wish to start using some instrument, other than straight stocks, take a look at how taxes work on that instrument in your country. That can save you a lot of money in taxes when you know how they work.
Learn about different markets
If investing in index funds and ETFs is your thing, you could start researching different markets. That might mean different continents and countries and their stock indexes, or a certain industry such as gaming or renewable energy.
There are a lot of different choices you can dive deeper into. Pick something that you have an interest in and start from there. It is much easier to learn about something you are interested in.
Learn about different companies
If stock picking feels like your thing, you could learn to read balance sheets and reports of the companies. Learn what the different key figures such as P/E and EBIT mean and start from there.
Look for average key figures in the industry and that way you can start comparing different stocks. This was the way I started my investing journey, since then, I have moved more towards index funds, since learning about individual companies takes a lot more time than the more passive form of investing in index funds.
So, in conclusion, you can learn the basics of investing in just a few hours. However, mastering the art of investing takes a long time, like mastering anything else.
The good thing about investing is that you never run out of things to learn. New things come up every day that can affect markets and you can become better at analyzing that information.
More investing-related posts can be found here.
Hopefully this was helpful to you, have a nice day.
This is not investing or financial advice. Always do your research before risking your hard-earned money. Past returns of the market are not a guarantee of future returns.