16/04/2020 0 Comments
Starting Your Investment Journey
Rent, utility bills, debt payments and groceries might seem like all you can afford when you’re just starting out. But don’t be discouraged once you’ve
mastered budgeting for those monthly expenses (and preferably set aside at least a little cash in an emergency fund), it’s time to start investing in 2020. When you’re young investing is one of the best ways to build solid returns on your money. That’s thanks to compound interest, which means your
investment returns start earning their own return.
If you're saving money for a goal and won't need the cash for at least five years or so, the money should be invested. Unfortunately, many people are afraid to invest, or don't do it because they don't know how to get started.
The good news is, investing can be easy, you just require some information to make wise investments. You just have to follow these five simple steps to get your money into the market.
-Choose a target asset allocation
-Open an investment account
-Pick investments appropriate for your goals
-Know how and when to monitor your investment choices
-Understand key investment terms
Before you start investing your money, understand that there are different types of asset classes available. An “asset class” is a group of similar types of investments such as real estate property or stocks. You can invest in one asset class or many. A mix of asset classes, or diversification, gives you a well-rounded portfolio that can weather ups and downs. Finally, you would then begin to add taxable investments to your brokerage
accounts or perhaps acquire real estate, and fund other opportunities. Diversifying your investments and keep investing, you're more likely to see a
better return on your money then if you didn't invest.
Done correctly over a long career, with the investments managed prudently, it would be almost a mathematical impossibility not to retire far more comfortably than the typical worker. It is simply the nature of compounding.
If you need help, you may consider doing what many investors do and working with a registered investment advisor, financial planner, or other professional. Finding the right one for you can be a bit of trial and error but it's an important relationship so you need to get it correct. Some financial advisors charge a flat fee for consultation, while others charge a percentage of the assets they are helping to manage.
When Is the Right Time to Start Investing? With stock prices falling, now is a good time to get a great an affordable deal in. And as history shows us, stock and property prices eventually go up after they crash.
Quick tip- For your investing goals,
consider your time horizon and the amount you need, then work backwards to
break that amount down into monthly or weekly investments.