When you are just getting started the investment world can be intimidating. With all of the finance lingo and countless amounts of options to invest in, it’s easy to get overwhelmed. None the less don’t let this deter you from getting into it. These are the three things you need to know when you start investing:
1. Learn the basics first
You don’t need to enroll in an investing 101 course, but learning the basic will help you feel a little less foreign in this new world. The first step to knowing where to invest your money is knowing how and where you can invest. From the basics of stocks and bonds to understanding the difference between mutual funds and index funds.
A great source for investment terms is Investopedia this site has a free education section specifically for learning about investing. The investment dictionary is a great reference for whenever a new word or concept comes up in your research. When you understand the basics, you will save yourself a lot of time and money in the trail and error process. You will be able to make informed decisions and develop a better portfolio.
2. Put personal finance first
In order to invest, you need to have money to invest with. Maybe you are already established with some savings, which in that you are in a great spot to start investing. If not then it’s important to first set your personal finance goals before you start to invest.
Being in a stable financial position allows you to make safe and longer-term investments. Making sure you have emergency savings established is highly recommended before you start to invest. This can be anywhere from 3-6 months of expenses. For some, it might take longer than others, but on the bright side, it gives you extra time to familiarize yourself with investing.
3. Investing made easy
After you’ve studied up on investments and have stashed away a comfortable amount, it’s time to start investing. When you are just getting started it can be scary to invest on your own, and brokers can be expensive. Thanks to technology, we now have alternatives that are readily available and easy to use: Investment apps.
Investment apps have taken the investment industry by storm. Taking the intimidation factor out of investing by making it as easy as answering a few questions and linking your bank account. Appealing to both beginners and veterans alike apps like Robinhood, Acorns, and M1 Finance allow you to have control over your investments whenever and wherever you and your smartphone are. With stock information broken down into understandable graphs to live updates and the latest news, you can take a DIY approach to investing, or for a less hands-on approach take advantage of the features that act as a personal broker.