Investment Newbies: Top Tips You Need For Getting Started

Are you just getting started out and you’d like to start your investment journey? You’re not alone. Rent, debt payments, groceries, and utility bills can feel like that’s all you can afford in a cost of living crisis. But if you’re just starting out, you need to remember that your paycheck can go a lot further if you are smart about how you spend.

Once you’ve wrangled your budget for those monthly expenses that are a must, you need to be able to set some money aside for cash in an emergency fund and then use some of that money to invest where you can. The tricky part is often figuring out how to invest and how much to do. If you’re a newbie to the world of investing, you’re going to have a lot of questions, and the biggest one is usually how much money you need to get started. Having your own investment dashboard can help, but you have to be able to build one up. Below we’ve put together some steps that you need to be able to start investing for the first time this year.

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Start early. It’s always smart to invest when you’re young, but somebody has to teach you how to do it so that you know to begin when you’re young. It’s one of the best ways to see a solid return on your money as you get older, and that’s thanks to compound earnings. Compounding allows your balance to snowball over time, and that snowball just gets bigger. In short, it’s very possible to get started with a little bit of money, so investing with smaller dollar amounts is possible now more than it ever has been, and that’s because of no or low investment premiums. If you’re stressed about whether you’re putting enough money aside, think about what amount will feel manageable given your financial situation.
Consider how much to invest. How much you’re going to invest is going to depend more on how much you can afford than anything else, but you should always get some advice from a financial advisor. A common investment goal is retirement because the years are short, but they sure do fly past. You want to aim to invest a total of 15% of your income each year for your retirement, and ideally you’ll be on top of what your pension contributions are. That might sound unrealistic to you, but you can start small and work your way up to it over time. If you have a retirement account and it offers matching dollars, that’s your first investment milestone done easily. Contribute at least enough to that account to own the full match where you can. Some months you may not be able to do it, but that’s free money and you don’t want to miss out on it because that’s going to contribute towards your future. If you have other investment goals such as home purchase, travel or education, think about your timeline and the amount that you’ll need and then work backwards to break it down into a monthly or a weekly investment in your savings.but just make sure that you have a high yield savings account.
Open an investment account. If you’re investing for your retirement and you don’t have access to an employer sponsored retirement account like a 401K, you can invest in an individual retirement account or an IRA. If you’re looking for a different investment goal, such as a property, you might want to avoid retirement accounts because these are designed to be used for that retirement and you have restrictions on when you can withdraw the money. Instead, think about taxable brokerage account options and high yield savings account options so that you can move money into them and keep that money safe.
Choose an investment strategy that feels workable for you. The investment strategy that you use really does depend on your saving goals, so speak to your financial advisor about this. You need to know how much money you need to fill them and reach your time horizon. If your savings goal takes you 20 years, then almost all of your money can be in stocks, but then choosing those specific stocks. It’s time consuming and complex, so that’s where advice can come in. If you’re saving for a shorter term goal and you want that money within the next 5 years, those risk associated stocks means that you’re better off to keep your money safe in online savings accounts or cash management accounts. You can even use a low risk investment portfolio.