Millennial and Clueless? Here’s a Starter Guide to Investment
Wednesday, September 11, 2019, 6:00 AM | Leave Comment
Life is full of exciting opportunities, ways to spend your money and time that will provide you with memorable experiences to last a lifetime.
With all the adventures available to you, you’ve probably never given the first thought to investing. Maybe it’s time to think about it.
These four tips on getting started in investment can put you on a path to financial security that will make all the other adventures possible for years to come.
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Start Early
The most important thing in investing is to get started as soon as possible. That doesn’t mean you should wring your hands over not starting sooner, it just means that the best time to start is as soon as possible. The power of compounding interest will do more for you when you give it more time, so make an effort to invest at least a small amount as soon as you possibly can.
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Keep It Diversified
Every so often, a company suffers a financial meltdown, costing its investors millions. It’s a situation scary enough to keep any investor away, even when the downturn is milder. There is no way to predict all of these events, but you can reduce your risk by only placing a small percentage of your money in any given investment. Mutual funds can do this for you, so use the right financial advisor platform to formulate your investment strategy.
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Forget the “Big New Thing”
Many people are reluctant to diversify because they want to maximize their gains if a stock takes off suddenly. And yes, somebody who was all-in with Facebook in the mid-2000’s certainly hit it big. But there are far more stories that end the other way, so your best option is to keep the speculative investments to a minimum, or at least to plan your strategy based on realistic expectations from them.
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Leave It Alone
The worst thing you can do with investments is to take money out too soon. First off, many investments are made before taxes, meaning you’ll take an IRS hit by withdrawing. Taking money out can also cause you to miss gains that could be just around the corner. Finally, cashing out undermines your long-term prospects for a solid financial future in retirement.
The things we enjoy in life take money, so it’s important to plan for financial security even while you’re young and retirement seems an eternity away. With good investments, you can have enough cash on hand to enjoy life later one without depriving yourself of some fun now.
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