How to Get Started Quickly with Investing

Add up all the regular monthly payments that you’ve got to deal with each month, like debts, utility bills, rent, and more, and it seems as though there’s no money left for anything else. However, once you’ve managed to pay off your personal loans and master your budgeting for the rest of those extra expenses, you might find that you can finally start to put a little cash aside for your future.

When you’ve got money left over at the end of each month, the best thing you can do is put that cash to work. Don’t just leave it in your bank account, make an investment, and watch your money grow. Of course, that’s easier said than done. If you’re new to investing, you’re likely to have a lot of questions. Fortunately, these tips will help you to get started on the right track.

1.    Start Early

First things first, it’s important to start investing as early as you can. Investing when you’re young is one of the best ways to get big returns on your money. That’s because investments benefit from something called compound interest. In other words, the returns you get on your investments start earning their own cash over time.

The benefits that come with compound interest are one of the reasons why many people consider taking out credit/finance and using other forms of borrowing so that they can get in on the ground floor of a new cash-building opportunity. The more money you can put into your future now, the better off you’ll be.

2.    Decide how Much You Want to Invest

There’s no specific price tag on investing. You’ll need to decide how much you can reasonably afford to put aside each month. Sometimes, it’s helpful to evaluate how much money you’re going to need to reach a specific goal. For instance, you might want to start saving for retirement with your investments. If that’s the case, then the general rule of thumb offered by most financial professionals is to try and get around 10% or 15% of your income each year into a retirement fund. Your employer match will count towards that goal.

Once you’ve decided how much you want to invest in your future, try to stick to your goal as much as possible.

3.    Open Your Investment Account

Now, you’re going to need to open an investment account – if you don’t have a 401K account set aside, then you’re going to need to open a separate Roth IRA or traditional IRA instead. If you’re investing in another goal (something other than retirement), you can avoid retirement accounts and choose a taxable brokerage account for your investments instead.

The good thing about a taxable brokerage account is that you can remove money from it at any time that you choose, which is great if you might need to access your money. Remember, you don’t necessarily need a lot of money to open an investment account, you can start as small as you like!

4.    Understand Your Options

Another point to keep in mind when it comes to starting investing is that there are plenty of different ways to watch your money grow. For instance, one common option is to get involved with stocks. Stocks are shares of ownership of a company, otherwise known as equities. A bond is also a common option for investing. A bond is a loan to an entity that will agree to pay you back over a set number of years, all while you’re gaining interest.

Mutual funds are slightly more complex options for investment. They mix multiple earning opportunities together and give investors a chance to skip the work involved with picking separate bonds and stocks. Instead, you can just purchase a diverse collection of securities all at once. There’s also the option to explore exchange-traded funds. Like mutual funds, ETFs hold many investments at the same time. However, ETFs trade through the day like a stock.

5.    Create Your Investment Strategy

Your investment strategy will depend heavily on your savings goals, how much money you’re going to need to reach those goals, and your time horizon for the future. If your savings goal is more than 20 years away – such as an upcoming retirement, almost all of your cash may be in stocks. However, picking specific stocks can be a complex and time-consuming process.

If you’re saving for a short-term goal and you need the money within five years or less, then you might need to think about keeping your money safe in an alternate account, Speaking to a specialist will help you to choose the right strategy.