Investing can seem like a very risky, complex and fast-moving process. With endless combinations of investment vehicles to choose from, it can be difficult to take your first step as an investor—especially with the knowledge that all investments carry the risk of losing some or all of your money. So why bother? Well, there are many compelling reasons to make investing a part of your overall financial plan. Investing can help preserve your wealth by overcoming the effects of inflation, help you save for long-term goals (such as retirement or your children’s education) and it can even generate income. So how can you get past all the negatives associated with investing and make it work for you? A helpful first step is to realize that, as a young investor, you have time on your side. Watch below as Mr. Greenbacks sits down with Jen to discuss the best ways for to start investing.
Unless you can predict the future, investing is a risky business. Know your goals, your needs and your tolerance for risk before you put your money at stake. These three tips can help get you started on better understanding the best and smartest ways to invest your money.
1. Understand the risks of different types of investments
Stocks and bonds are the two main vehicles that you are likely to invest in. If trading individual stocks and bonds feels too risky to you, investing in mutual funds is another option to consider.
2. Establish your goal timeline
The time horizons of your goals will have in impact on where you put your money. With a shorter time span, a more conservative investment vehicle is typically in order. With a longer horizon, your investment has time to weather more risk.
3. Start early in life, start small and keep going
When you are starting to invest, it is best to start small and take risks only with money that you are prepared to lose-- you'll have to main choices for actually investing your money; through an advisor or the DIY route.
Learn more about the best way to invest your money today by clicking the handout above.
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