FF Challenge – Day 22: Start Investing

Welcome to Day 22 of the Financial Freedom Challenge! Yesterday we worked on our first Deposit Schedule. Now that we automatically save part of our Income we can move on to the next fundamental step towards Financial Freedom. I’m talking about investing (part of) our savings.

I understand that many of many may be scared about this huge step. When I started to invest I felt exactly like that. But now you have much more financial knowledge than I had at the time so you have an incredible advantage.

So let’s take courage and start our adventure in the world of investments! 🙂

FF Challenge - Day 22: Start Investing

What’s today’s task?

Do I really need to repeat it again? Ok, but for the last time. Today we start setting up our first investments. If you’re a reader of my Passive Income Reports or you’ve checked my Investment Portfolio you already know what I’m investing in.

Just to make a recap for my new readers:

Today I don’t want to focus on my Investment Portfolio. Your portfolio does not have to be similar to mine. Today’s goal is to understand which are the financial instruments we can invest in and their main pros and cons. After this first overview, you need to reflect about your financial goals, time horizon, risk tolerance, and capital. You will need to build your Investment Portfolio based on these parameters.

The point is that there is no portfolio that fits everyone. We are all different so we need different Investment Portfolios. I don’t know you so in this article I can just give you the basic knowledge necessary to build an Investment Portfolio.

Moreover, you need to know (in case you don’t) that the Investment Portfolio is an always-in-progress entity. Every now and then we’ll add or remove investments, increase the weight of a certain investment and so on.

Let’s see the most famous investment instruments!

Stock Market

Well, the stock market is the most famous in absolute. We’re talking about buying (and selling) stocks. By doing this we can earn in 2 ways. We earn if the stocks we own increase their value or by receiving dividends from the stocks we own.

For instance, in 2018 I bought some CocaCola stocks and I kept them for several months. In the meantime, I received some dividends and then I sold these stocks at a higher price compared to the one I paid for them.

I must warn about the danger correlated with buying single stocks. Buying single stocks could be very dangerous and is recommended only to those who have studied this subject and have experience in the field. If you’re a beginner, skip to the next financial instrument.

  • Experience needed: High
  • Risk: 8 out of 10 (it depends on your knowledge and experience)
  • What you need: Broker
  • Annual return: historically 10%
  • Costs/fees: they depend on the fees charged by your broker (always check them!)
  • Time Horizon: Short/Medium/Long


ETFs are an awesome financial instrument. Above all, they’re suitable for newcomers in the investing world. But what is an ETF?

ETF stands for Exchange-Traded Fund and is an investment fund that holds assets like stocks, bonds or commodities. It means that by investing in an ETF you’re actually investing in a huge mix of different firms/commodities/bonds. By doing so you reduce your risk exposure.

As you probably know I’m not yet investing in ETFs but I’m planning to start doing it within the end of the year. Subscribe to the blog if you want to receive directly on your email my future updates about this topic.

If you want to deepen your knowledge on ETFs read my article about how to identify a good ETF for you.

  • Experience needed: Medium
  • Risk: 2/3 out of 10
  • What you need: Broker
  • Annual return: it follows (more or less reliably) the stock market’s return
  • Costs/fees: very low
  • Time Horizon: Medium/Long

Real Estate Market

This is a very interesting market but it requires great skill if we want to invest in first person. Or you can decide to invest through a Real Estate crowdfunding platform that allows you to finance Real Estate investment portions. I’m talking about platforms like EstateGuru and Envestio. By doing so you finance many projects so you reduce your exposure to every single project (diversification is fundamental).

Read more about the platforms that I use on the dedicated page if you like.

  • Experience needed: Low/Medium/High
  • Risk: 6/7 out of 10
  • What you need: Broker/Real Estate crowdfunding platform
  • Annual return: it depends, on the platforms cited above up to 15% per year
  • Costs/fees: Not predictable
  • Time Horizon: Medium/Long

P2P Lending

P2P Lending is a fairly new industry compared to the previous ones. It consists of lending money to other people in exchange for interest on our capital (up to 12-13%).

Read more about the platforms that I use on the dedicated page if you like.

  • Experience needed: Low/Medium
  • Risk: Medium
  • What you need: P2P Lending platform
  • Annual return: up to 13% per year
  • Costs/fees: absent
  • Time Horizon: Medium/Long

These are the most used investment instruments at the moment. Obviously, there exist countless more financial instruments. I suggest you do your researches.

Now that you know in what you can invest, it’s time to invest! Create a mix of the financial instruments cited above and build your Investment Portfolio.

If something is not clear feel free to leave a comment or write me an email (domenicocervo@financeshot.com). I’ll try to help you!

A brief summary of today’s task of the Financial Freedom Challenge

  1. Read all the descriptions of the financial instruments written above
  2. Choose the instruments that suit your financial profile (time horizon, risk tolerance..)
  3. Build your Investment Portfolio by mixing them
  4. Start investing your savings in this Investment Portfolio
  5. Increase your Investment Portfolio month by month

If you need any advice about how to build an effective Investment Portfolio contact me at domenicocervo@financeshot.com and I’ll try to give you some suggesitons 🙂

Books suggestions:

Final recommendations

This was Day 22 of the Financial Freedom Challenge. One of the most important. Read carefully this step and put it in practice. If you do it starting from today your life completely change for the better, trust me! If you have any questions about this challenge, write a comment and I’ll be glad to answer you 🙂

Besides share in the comments your opinion about this step. Are you already investing? If yes, which instruments are you using?

Come back tomorrow for Day 23. I’ll be here for you! Remember to follow us on Facebook and Instagram! Share this challenge on your social media: this will keep you motivated during the path, trust me 🙂 If you want direct contact with me (answers, discussions, doubts, advice…) and the other participants, join our Telegram groups (ENG Group, ITA Group).

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