Ready to Start Investing? These Tips Can Help
Know what you’re saving for
Is your financial goal to fund your retirement in 30 years, buy your first home in the next three years or something else?
Knowing what you’re saving for will help you figure out how long you have to save (your investment time horizon) and how much you’ll need to save each month to get there.
Consider your monthly budget. Think about what you would be willing to cut back on. It’s fine to start small; for example, cutting out a $5-a-day coffee habit could help you save $100 a month.
Be sure to monitor your progress. If you’ve faced unexpected expenses or life events, you may need to adjust your goals or your time horizon. For example, you may be able to save for a down payment on your first home over five years instead of three.
Determine how comfortable you are with risk
There are many different investment options on the market and each comes with its own level of risk. Typically, the higher the potential return of an investment, the higher the level of risk.
Are you comfortable with losing money on your investments from time to time, knowing that you could gain it back (and then some) over the longer term? Or do you lose sleep over the thought of your capital going down in value?
Work with a financial advisor
This article just scratches the surface of starting out as a new investor. There are many investment options available to you and other factors to consider, like diversification, liquidity, trading costs, account types and investment fees.
A financial advisor can work with you to choose investments that align with your financial goals, time horizon and risk tolerance. An advisor can also help you maintain a regular savings discipline so you can grow your money steadily over the long term.