Investing as a beginner can be kind of intimidating. You may feel like a fish out of water because you don’t know a lot about it. But I will let you in on a little secret. You don’t need to know everything about investing.
1. Educate Yourself
When the thing that is keeping you from investing is lack of knowledge, you can fix that problem fairly easily. Do some research about it. There are plenty of resources available to help you quench your thirst for knowledge about investing. Magazines, books, and internet articles are just a few of the ways you can learn about investing. You could also ask someone you work closely with. Or, ask a friend or relative what they know about investing. It may take you a little bit of time to learn about investing, but you can go at your own pace. Remember, you still don’t have to know everything, you just have to know enough to help you get started.
2. Know Your Goals
Do you know why you want to start investing? Is it to save for your future retirement? Could it be you want to invest for the future education of your children or grandchildren? Knowing why you want to invest can help you decide how you want to invest as well as how much to invest and the amount of risk you are willing to take.
3. Consider Options
As a beginning investor, there are many different ways you could invest to help you achieve your goals such as real estate, mutual funds, stocks, and bonds as well as several others. Here are a few options to think about:
Ask your employer if they offer a 401K plan. If they do, find out more and then sign up for it. They will deposit a small portion of each paycheck into an investment account. In addition, they may match part of your contributions and increase the amount going toward your retirement savings. You can move money around in different funds to maximize your returns and make the most of your investment dollars. However, it’s usually a good idea to diversify by putting some of your money into lower and medium risk investments as well as high risk investments. This way, if there are losses in one area, you still have some money invested in other funds that are not experiencing losses allowing your investments to continue toward growth.
One other way to invest and keep it simple is to use a robo-advisor to do the work for you. They are easy to use and there are several different options you could choose from. Most have low minimum deposit amounts as well as low fees for their services. In addition, they automate investing for you so you don’t have to do the work yourself, which is a great feature for the beginning investor. Most robo-advisors have apps you can install on your phone enabling you to check your investment whenever you want.
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Don’t let a lack of knowledge about investing prevent you from getting started. As you can see, you don’t need to know everything about investing in order to save toward your goals. Rather than put it off any longer, go ahead and get started right away. The only thing you will likely regret is not starting sooner.