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I’ve been in the personal finance space for years but still, investing in the stock market wasn’t something that I jumped at. Instead, I hesitated for far too long.
I wasn’t sure where to start, what to invest in, or even how to go about it. Now that all seems so silly.
The truth is, it is ridiculously easy to get started, you don’t need to be an “expert”, and you can start investing with as little as ten dollars!
Here are some investing for beginners ideas to get you started. (Even if you have no clue what you’re doing!)
Choose a “Robo-Advisor”
I see a lot of headlines in news stories about the pros and cons of choosing a robo advisor over an in-real-life financial advisor. But the truth is, it doesn’t matter which one you pick. Anything is better than nothing!
Plus, if you don’t have a lot of money to start with, don’t want to pay large fees to financial advisors, and haven’t a clue what you’re doing, going with an online platform can be really great.
I personally love Betterment as my “robo-advisor.” Getting started is simple, there are no minimum contributions, and you can have a retirement or personal investing account up and running in minutes.
Here’s how it works:
Create an account with Betterment
Fill In Your Personal Info
Choose Between a Traditional IRA, Roth IRA, or other type of general savings account
Take a risk assessment
Deposit some money (you choose the amount)
Betterment will invest your money into a diversified portfolio of index funds based on the results of your risk assessment (which you can manually change, by the way)
I started buying individual stocks at the beginning of 2014 and have took a pretty substantial loss based on my choices. My Betterment account, also started in 2014, has a positive return and is crushing my picks.
Going forward I’m going to keep my retirement accounts with a robo-advisor and let them choose the investments for me.
Start Small
Investing is not an all or nothing type of thing. If you’re just getting started you have the option to take it slow.
You could buy one individual stock just to get your feet wet or explore different types of small investment ideas. Do what you need to until you feel comfortable.
The last thing you want to do is invest every single dollar you have in something you know nothing about!
Realize That Investing Goes Beyond the Stock Market
Let’s move beyond the idea that investing means you have to buy into stocks. That’s not true. There are plenty of self-made multi-millionaires who have never put a dime in the stock market.
While I do have some money deposited into my IRA each month the stock market isn’t really my thing. I’d instead to prefer to have a little more control over my investments. I can keep my control by investing in real estate, my business, or myself.
I personally want to be diversified which is why I have money put into an investment account each month but my next goal is to invest in real estate.
All the investment experts tell you to “Invest in What You Know” So keep in mind, that there are many things you can invest in without your money ever touching the stock market.
Take the Confusion Out of Investing
Don’t get tripped up on investing lingo or fancy day trading strategies – you don’t need either to get started investing. Instead keep it simple, start small, and explore investing options that are best suited to your preferences.
Alexa Mason
Alexa Mason is a freelance writer and wanna be internet entrepreneur. She is also a newly single mom to two beautiful little girls. She chronicles her journey as a single mom trying to make it big at www.singlemomsincome.com.
A stock portfolio focused on dividends can generate $1,000 per month or more in perpetual passive income, Mircea Iosif wrote on Medium. “For example, at a 4% dividend yield, you would need a portfolio worth $300,000.
A stock portfolio focused on dividends can generate $1,000 per month or more in perpetual passive income, Mircea Iosif wrote on Medium. “For example, at a 4% dividend yield, you would need a portfolio worth $300,000.
Investing your $100 can be pivotal in generating passive income, preparing for financial uncertainties, and achieving long-term goals. The magic of compound interest implies that even modest sums can snowball over time.
1. High-yield savings account (HYSA) If you want higher returns on your money but are nervous about investing, consider opening a high-yield savings account.
If you are just getting your feet wet, choose basic investing courses designed to teach you about the market, how it works, and what the different types of investments can do for you and your portfolio. Beginner courses should cover the basics of investing, including stocks, bonds, mutual funds, and retirement funds.
How much should you be investing? Some experts recommend at least 15% of your income. Setting clear investment goals can help you determine if you're investing the right amount.
Investing $100 per month, with an average return rate of 10%, will yield $200,000 after 30 years. Due to compound interest, your investment will yield $535,000 after 40 years. These numbers can grow exponentially with an extra $100. If you make a monthly investment of $200, your 30-year yield will be close to $400,000.
Investing in stocks, bonds, crypto, and real estate
Investing has the potential to build wealth much faster than a savings account alone. The average rate of return on the U.S. stock market is 10%. Assuming you saw similar results in your portfolio, you'd see your money double every six or seven years.
As a general rule of thumb, you want to aim to invest a total of 10% to 15% of your income each year for retirement. That probably sounds unrealistic now, but you can start small and work your way up to it over time.
Investing can help you build wealth over the long-term and it's also possible to see relatively quick returns with day trading. Luckily, many investment apps exist to fit investors with their needs and expertise level. Day trading involves buying investments at one price and selling them at a higher price.
As long as you commit to investing $200 per month or whatever you can afford, you'll put yourself into a much better financial position by the time you retire.
Imagine you wish to amass $3000 monthly from your investments, amounting to $36,000 annually. If you park your funds in a savings account offering a 2% annual interest rate, you'd need to inject roughly $1.8 million into the account.
You'd be surprised just how far $500 can go when it's invested in the right way. Not only is it enough to start growing wealth in a meaningful way, but investing even a small amount can help you build positive investing habits that will help you to reach your future financial goals.
If it's your first time investing, you may want to invest $1,000 in an exchange-traded fund (ETF). A beginner-friendly alternative to traditional mutual funds, ETFs contain a mix of stocks, bonds, and other securities, giving you access to a broad range of asset classes within a single fund.
Introduction: My name is Rev. Leonie Wyman, I am a colorful, tasty, splendid, fair, witty, gorgeous, splendid person who loves writing and wants to share my knowledge and understanding with you.
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