How to Begin Investing Your Money: A Complete Guide

Believe it or not, more than 55 percent of Americans don’t invest at all. The reason why varies from person to person.

Many believe they don’t have enough money to get started. However, for a lot of would-be investors, the reason they’re not actively trying to grow their wealth is that they’re not sure where to start.

Learning how to begin investing your money takes time, but it’s not as overwhelming as you might think. Here’s what you need to do to get started so you can start seeing regular returns and improve your financial future.

Invest in Yourself First

Before you can start investing in stocks, bonds, and high yield investments, you need to invest in yourself. Take a long, hard look at where your finances stand.

Do you have a retirement account that you contribute to regularly? Are you actively building up your savings so you can afford to try new things? If so, you’re ready to start figuring out how to invest money to grow your income.

However, if you haven’t opened a retirement account and don’t have much money set aside to cover emergencies, you’ll want to get those things in order first. Saving for retirement and building up your savings is an investment in yourself and your future.

Remember, investing comes with risk. The last thing you want to do is tie your money up in investments that won’t give you the returns you need.

By saving money and planning for retirement now, you’ll have an added cushion to make those periods of risk more bearable.

Start as Soon as You Can

Once you have some savings in place, you’re ready to get started with your investment journey. Believe it or not, you don’t have to invest hundreds of dollars at first. You can get started with just a few bucks.

The sooner you start investing your money, the better. When you’re younger, you’re better able to rebuild your savings if investments don’t pan out the way you want them to. You’ll also be able to make more money the sooner you get started.

Consider What You’re Passionate About

You don’t have to invest in the most successful stocks or index funds. You’re free to make your own choices and when you’re first starting out, it’s best to choose companies you’re passionate about. This helps you maintain enthusiasm while also letting you support industries you love.

Think about the types of companies you love to support. For example, if you’re passionate about new tech and gadgets, look for new companies in that sector. New businesses are going public all the time and that means your opportunities to support brands you love will never end.

You’ll be able to follow your passions as long as you’re investing.

Establish Clear Goals

One of the biggest lessons you’ll learn when you figure out how to start investing is to make clear goals every step of the way. Think about what you want your investments to do for your financial situation.

Are you looking to boost your annual income with high returns? Do you want to grow your wealth more slowly so you can live comfortably in retirement?

Think about what you want to accomplish with your investment strategy. This will dictate the types of investments you make and the amount of risk you’re willing to take.

Decide Between DIY and Managed Investments

When you’re first learning how to invest in stocks, bonds, and other investment types, you’ll need to decide between handling it on your own or working with an experienced professional. There are benefits to both options.

If you choose to handle investments on your own, you’ll be able to save yourself some of the more expensive fees associated with investing. However, you will have to research each investment you make in detail to make sure it’s in your best interest.

If you go with an experienced professional, you’ll end up paying for their services. That said, you may be able to avoid potential losses by relying on their knowledge and expertise.

Think about how comfortable you are with the stock market and investing in general. If you think you’re able to research funds and stocks on your own and make good decisions for your investments, go it alone! However, if you’re worried about making mistakes, work with a professional.

You can always switch to self-managed investments in the future.

Don’t Neglect Your Savings

One of the best investment tips you can follow is to not neglect your savings even when you’re actively investing your money. You still need to contribute to your retirement account and add money to a savings account at the same time.

Remember, withdrawing money from your investments takes time. You always need to have money on-hand to cover unexpected costs when they pop up.

You don’t have to contribute a ton. Just set aside money from every paycheck so you can keep building those funds without having to think about it.

Be Willing to Diversify Your Portfolio

Investing in a single type of investment, business, or industry is the easiest way to fail. When you do, your money gets tied up in a single stream. If that stream dries up or the industry/company starts to see a slow period or fails entirely, your investments will suffer.

The last thing you want to do is lose money on your investments. Luckily, you can hedge against that loss by diversifying your portfolio.

Invest in different companies, industries, and investment types and you’ll be in good shape.

Now You Know How to Begin Investing

Figuring out how to begin investing doesn’t have to be difficult. Keep these tips in mind and you’ll be on the right track from the very beginning.

Just remember to review your investments’ performance every quarter and follow the trends in the market. This way, you’ll be able to make changes as needed to keep your portfolio growing rather than falling flat.

Looking for more tips to help you take control of your financial future? Check out our latest posts.

Jeff Campbell

Jeff Campbell is a father, martial artist, budget-master, Disney-addict, musician, and recovering foodie having spent over 2 decades as a leader for Whole Foods Market. Click to learn more about me

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