While it seems daunting at first, the beginning step investing is very simple. It doesn’t take a lot of money to begin. Simply beginning to set aside small amounts of money puts you on the road to financial freedom. There are too many excused we make to not start. Congratulations on the taking the first steps!
The first step in beginning investing is to determine your goal or goals. You can have multiple. Long-term goals and Short-term goals.
What is it that you want to achieve? Are you saving for a down payment on a house? Are you saving for retirement? Saving for children’s education? Or a grand European vacation.
Don’t feel like you’re facing an insurmountable hurdle. A modest amount of money builds over time. Want to be enjoying financial freedom by age 55, maybe even 45? Stick to your goal and don’t stop.
Here you can see the portfolio value of a modest investment over time. This assumed an 8% return. Some years you will see huge returns while others not so much. The key is to be consistent and stick to your plan.
Once you’ve determined your goals and amount you’ll set aside and investing on a monthly basis, you need to determine what type of account(s) you’ll need. There are many types of investment accounts available and you will likely want to have several for different purposes. We list the most common types for an individual investor. You should consult with a financial advisor if you have any questions or unique circumstances.
These are your standard investment accounts. There can be a single owner or joint account owners on the account.
Once you have your account, you’ll need to determine which investments to start with. It’s easy to get overwhelmed here. Everyone seems to have an opinion on what you should be investing in to start. Luckily there are some awesome free resources available to guide you to in starting a portfolio. You can always change your investment mix as time goes on but these will give you a great start.
Click here to get Wallet Wisely’s reviews of best online investment accounts for Beginners:
I’m always reminded of the song, “don’t stop believing”, but I would it to “Don’t Stop Investing” here. Investing takes patience and consistency. Time in the market is very important.
Compound returns are like magic
“Compounding has a snowball effect. It is just a tiny ball of snow at the very start, but it can turn into an avalanche over time.”
Naved Abdali Tweet