One of the most common financial misconceptions is that investing is a complicated task that requires lots of time and extensive knowledge. Investing is one of the best possible tools to use for reaching your long-term financial goals and it comes in a wide variety of different forms. Often times the largest barrier to entry for investing is feeling like you do not have the skills to start investing. We are here to tell you that not only do you have the skills to invest, but you can begin investing today regardless of your current financial situation. Whether you are a seasoned investor, or you are looking to start investing for the first time, following these tips will help you build confidence in your investing abilities.
1 | Start Sooner Than Later
Start investing your money sooner than later (as your finances will allow). This is the number one tip that you will hear from any experienced investor. Starting sooner gives your money more time to compound and grow in your investment. By starting investing sooner, you can maximize your money-making significantly higher returns in the same exact investments.
To see the difference investing sooner can make, try using this investment calculator.
There is no set amount of money that you have to invest. Starting investing with smaller investments to get in the habit and learn more can be a great way to start. While larger investments will gain you more money in the long run, investing with what you can afford now can set you up for future financial success.
2 | Set Achievable Investing Goals
One of the most important components of sustainable investing (both short-term and long-term) is having a set of investment goals. These investing goals should be applicapble to your specific situation because the same goals won’t work for everyone. When you are setting your investing goals, these are some of the things that you should be thinking about.
Your Age, Income, and Career Outlook
These three factors will largely determine your investing abilities so they are a great place to start.
Setting Specific Goals
Your goals should be clear and easy to understand.
Making Your Goals Measurable
Having measurable goals allows you to track your progress along the way.
Making Your Goals Achievable
Setting goals within reach is important to being successful in reaching your goals.
Making Your Goals Relevant
Your investing goals should be relevant to your overall financial goals.
Setting a Timeframe
Setting a timeframe helps you stay on track with your goals
Setting goals is always an important component of success regardless of the task. Another important part of setting goals is revisiting your goals regularly. As your life changes, so will your goals and you may find that some are no longer relevant. Revisiting your goals regularly ensures that they stay aligned with your overall life goals and help keep you on the path to success.
3 | Don’t Stop Saving
While we fully recommend investing money, it is always a good idea to save some money in bank accounts for things such as emergencies or planned purchases. While the main reason that most people invest is that they can earn higher returns than leaving money in a savings account, it means that your money is more susceptible to the market and harder to gain quick access to. We recommend that people make investments but keep the money for emergencies and planned purchases in a traditional savings account. While you may not earn the same returns, the security of having 3-6 months of expenses saved will give you peace of mind.
4 | Choose Your Investment Horizon
Your investment horizon is the amount of time that you plan to keep your investments in your profile. The most common investment horizon people set is for when they plan to retire. For example, if you are 35 and plan on retiring at 65, you would set an investment horizon of 30 years using this method.
With a longer investment horizon, it allows you to make riskier investments that can net you higher returns. The longer period allows you to take more risks with your investments, and ride out any fluctuations in the market that may occur. This is why tip number 1 (start investing sooner than later) is so important to smart investing!
5 | Get Help From The Experts
Getting help from expert investing advisors can be a really great way to get all of the specialized help that you need to reach your investment goals. An investment advisor can help you with setting your goals, choosing the right investments, and giving you all types of investment advice to make smart financial decisions. It is their job to help you maximize your investments and reach your goals.
Start Investing Today!
The bottom line is that no matter what, the best time for you to start investing or setting goals to begin investing is now! There is nothing wrong with starting out with smaller investments and working your way up to larger goals over time. Following these tips will help you to become a more confident investor and start earning more money.
Latitude 32 Credit Union is dedicated to helping everyone reach their financial goals. Our team of expert staff is trained to handle a wide variety of needs for different situations. Becoming a member of our credit union is more than joining a financial institution. You are adding an entire financial support team to help you with all your current and future financial needs! Contact us today to learn more.
Latitude 32® Credit Union
1845 Sam Rittenberg Blvd.
Charleston, SC 29407
(843) 556-4809