1. Identify your budget
Go through your bank statements and identify what you make, and where your money goes each month. From there, identify where you can or should cut back as well as what you have to invest, The goal is to live on 50% or less of your income, no matter how little you think you make. This may mean that you need to move into a smaller house for a few years or drive an older car, but identify where you can cut back and make the changes.
2. Pay off debts
Identify what you can make on investments you are interested in and pay down debts that charge more interest than you can make. For example, if your car interest rate is at 2% but you can make 8%, invest the extra money instead of paying off your car. On the otherhand, if your credit card charges 15% and you can make 8%, pay off the credit card first as quickly as possible with all extra available cash..
3. Identify your risk tolerance
Typically your risk tolerance correlates with your age, but that is not always the case.. The older you are, the lower your risk tolerance becomes as you have less time to make up for losses. Higher risk investments include:private equity, stocks, and other investments not tied directly to assets where you really can lose everything. Lower risk investments are tied to asset management where you are investing in growth of value of the asset.
4. Find an investment and educate yourself
When starting out, it is important to find a source of education to learn (classes, mentor, associations, etc). Every professional athlete has several coaches, and so should you. Hiring a mentor or coach will shorten the learning curve and help avoid common mistakes to increase your return faster.. The more you learn, the better you will get at your chosen investment.
5. Adapt as needed
Markets change. It is important to understand the changes in the market and adapt accordingly. No one can predict market changes 100%, but the more you learn, the better you can adapt, fail fast, and panic sooner.