How New Investors Can Benefit From Stocks and Bonds, According to Robert Kiyosaki
Written by
Kristopher Kane
Edited by
Jenna Klaverweiden
Commitment to Our Readers
GOBankingRates' editorial team is committed to bringing you unbiased reviews and information. We use data-driven methodologies to evaluate financial products and services - our reviews and ratings are not influenced by advertisers. You can read more about our editorial guidelines and our products and services review methodology.
20 Years
Helping You Live Richer
Reviewed
by Experts
Trusted by
Millions of Readers
Robert Kiyosaki knows about investing. Famous for writing the “Rich Dad Poor Dad” blog, Kiyosaki regularly offers advice and education about financial literacy and the importance of making good investment choices. A recently updated post on his website outlines some compelling reasons new investors should consider investing in paper assets, such as stocks and bonds.
Keep reading for a look at the thinking behind paper assets and why they’re a practical choice for novice investors.
What Are Paper Assets?
Paper assets — like stocks, bonds, options and cryptocurrencies — are mentioned several times in the blog post. These assets are typically traded digitally but are called paper assets in reference to the contracts or financial agreements that represent ownership or interest. Historically, this kind of proof was in the form of paper certificates.
Paper assets differ from tangible assets, like real estate or gold. They can be sold much more quickly than tangible assets, which makes them a good fit for most investors.
What Makes Paper Assets Good for New Investors?
According to the blog post, there are a few reasons paper assets specifically can be good for new investors, including their liquidity, growth potential and accessibility.
Liquidity: Quick Access to Your Cash
Liquidity is one of the primary advantages of this kind of investment. Paper assets are highly liquid, meaning they can be quickly converted into cash should the need arise. Other forms of investment may take weeks or even longer to sell, and urgency may force having to sell at a loss.
Investments in stocks or bonds allow you to sell all or parts of your portfolio for fast access to funds, often within just a few days.
Growth Potential: Building Long-Term Wealth
Another benefit of paper assets is the ability to “buy on the dip.” Downturns, when an asset’s value may temporarily go below established historical supports, often present great investment opportunities.
Buying stock or bonds during market dips can lead to significant returns when markets inevitably recover and grow. Being able to “buy low, sell high” can be a substantial part of building personal wealth.
Accessibility: Ease of Use
Disruptive technologies have a way of democratizing access to various resources, and this is especially true with investing. Thanks to digital platforms and exchanges, novice investors can start investing in paper assets with as little as $100, according to the blog post.
Another advantage of these online platforms is the large variety of educational resources and investment tools they provide. These can help you learn the basics about investing relatively quickly and allow you to take advantage of features like automated investing.
Why Paper Assets Could Be Right for You
Stocks and bonds are a practical and accessible way for new investors to enter the market, according to the blog post, and the thinking behind this reasoning is sound.
One of the greatest benefits for market novices is the financial security of being able to convert paper asset investments into cash quickly and easily.
Be Sure To Diversify
The blog post also noted the importance of diversification, and it’s a good note to end on. It’s an important strategy for mitigating investment risk no matter where you are on your investment journey, but it’s especially important for beginners.
Investing in a mix of stocks and bonds from various industries or sectors spreads your risk. Poor performance in one area is more likely to be offset by gains in another, which increases the chances that your portfolio will show growth no matter what market developments occur.
More From GOBankingRates
