When it comes to investing, many people first think about putting money into the stock market and they immediately feel overwhelmed! But it doesn't have to be that complex. Here are a few simple steps to get started.
1. The first step I would encourage everyone to do before you start trying to invest is to pick up a copy of James O'Donnell's short but clear book, "The Shortest Investment Book Ever." Now doesn't that just sound incredible! It honestly is one of the most helpful books I have read on the topic and is perfect for the beginner investor.
2. Decide on your financial goals. Do you want the money immediately? (If so, investing is probably not for you. It's not a get-rich-quick arena) Do you want to save for college? Or do you want to invest for retirement? Set clear financial goals and allow your investment strategy to follow. An example would be: I want to save $50,000 for my son's college by August of 2030.
3. Meet with a professional. Sometimes people in the financial industry get a bad wrap because of a few bad apples. But if you don't understand investing, then I would highly encourage you to find an advisor that you can trust and ask them for their advice. Ask around for who other people use (or don't use) and then set-up a meeting with 3-4 options and interview them. Ask what their strategies are, their fee structure, and their minimum investment.
4. Start Slow... Before you begin investing into something make sure that you understand it. If you are investing in a 401(k), do you know how to explain a 401(k) to your grandma? Do you know what they money is going to inside of that 401(k)? Do you know what the fees are? Take your time and start slow. A simple strategy to help you start slow, but invest consistently is called "Dollar -cost averaging." This is where you choose a set amount per month and invest it in a particular fund or stock and do it consistently. This can be as simple as $10 or $100 per month. Again, make sure you know what you are putting the money towards.
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