If you’ve never invested before or you don’t have much experience, don’t count yourself out. There are many ways that you can get started with little risk and still make money. With some research and a little money, you can make a big difference in your future investments.
Why You Should Start Investing
The internet has made it easy for investors to get started with little money upfront. If you aren’t confident in what you are doing, you can invest a little money to familiarize yourself before you make a larger financial commitment. Whether you are conservative or aggressive with your investment risk, let your money work for you. Even investing a little can make a big increase, but you must be willing to accept some decrease as the market fluctuates. There is no guarantee on an increase, but if you do your research, you are more apt to earn, rather than lose.
Where to Invest
There are many options on where you can invest. While you can invest on your own, it’s often recommended that you use a financial advisor or an investment firm, especially as a new investor. Your financial advisor does the research for you and can point you in the right direction of which funds to invest in. A firm that uses outsourced trading solutions can help ensure that your investment is always watched over carefully.
There are many websites and apps now that give you the power to invest on your own. Whether it be Acorn, Robinhood, or Schwab, if you are willing to do the research, they provide a platform for investing in the market.
IRA Contributions
If your employer offers a retirement plan, take advantage of it. Employers will often contribute a percentage of your salary or match a certain percentage of what you contribute. If you aren’t sure you can budget in contributing to the plan, start small. A little bit can go a long way. Anything your employer contributes is free money for you, so take advantage of this opportunity. Any money you contribute to an IRA (non Roth) is a tax write off, so check with the IRS to see what the maximum amount you can contribute.
Research
Before you invest in a fund or a company, do your research. If you are investing in a company, see how long it has been established for. What industry is it in? How does the future of this company fit for its industry? Look into the leadership of the company along with the company earnings. If you are investing in mutual funds, look into the manager of those funds. What is the outlook of the fund and its sub-holdings? There are many resources online to help you understand investing. Utilize what you can and educate yourself on where you are putting your money.
Don’t Touch Your Investment
Once you invest in the market, don’t touch your money. You may want to reallocate what you are invested in, but don’t pull your money out. This is especially true if it is a retirement account because there are tax consequences if you remove money too soon. Some plans also charge an additional penalty if you take money out too soon. After you invest, don’t make it an option to pull the money out. Your money will grow. The market has ups and downs, but if you stay invested, your money will work for you.
The stock market is a big enterprise that can seem overwhelming, but don’t let it intimidate you. If you start small, do your research, and utilize your resources, you can make your money work for you! Start small and watch your investments grow.