According to Merriam-Webster, investing involves committing money in order to earn a financial return. This means that you invest money to make money and grow the money you initially committed. The idea is that you save now in order to reap the rewards of an increased amount of money in the future.
There are several things you can invest in: stocks, retirement, children’s education, real estate, etc. Although investing can be risky, there’s also a possibility that your investment can grow and provide a notable payout.
Here are a few tips to consider when want to start investing:
- When considering investing, evaluate the current state of your finances. Are you in debt? Do you have an emergency fund just in case an unexpected expense arises? It is always best to get debt under control and have an emergency fund or “just in case” fund before investing, as investing is a nice-to-have addition to your finances rather than a requirement. Prioritize resolving debt first.
- Get a grip on “your why.” Are you planning to retire at a certain age? Are you planning ahead for your child’s college fund? Determine a target investment goal so you have something to work towards.
- Understand the risks involved. Read the fine print. With every investment, there are terms and regulations. Consider consulting an attorney or financial expert for additional questions.
- Start where you are, and that may mean starting small. You do not need a lot of money to invest. Do what makes the most sense for your finances and your future plans.
- Research. Research. Research. There are so many ways you can invest in your future.
- Stay the course and have patience. The return on investment doesn’t happen overnight. There are many factors that impact your return – time, political/governmental climate, state of the economy, chosen market, etc.
By arming yourself with knowledge, you can maximize your chances of success in investing and build wealth over time. There’s no rush. We just want you to be aware of the tools and resources so you can be a part of the conversations and plan for a successful future.
Photo Credit: Nataliya Vaitkevich