No matter what your age, it’s never too late to start investing for your future. Your investment needs and investment strategies might be different depending on your age, but investing in general is a good financial move. The purpose of this article is to provide some investment wisdom for people of any age.
1 Ask Questions
It’s okay to ask questions about what you do not understand. Even experts didn’t start out as experts. They had to learn from ground zero just like everyone else. If you have funds through an investment firm, ask them questions because they want to help you – when you make money, they make money. Other sources of education are libraries, the internet, and friends or colleagues. So, go ahead and educate yourself. Just be careful to verify advice that you are given as some well-meaning friends or colleagues may be giving misguided advice.
2 Diversify
You’ve probably heard the expression, “Don’t put all of your eggs into one basket.” When it comes to investing in stocks and mutual funds, this is good advice. If you only invest in one company and that company goes bankrupt, you could lose your entire investment. It is best to invest in at least a couple of different options so that if one isn’t going well, you have others that probably are.
Also, when choosing which funds to invest in, you may want to pick some of high risk for a greater return, but also some of medium risk and some of low risk. How much you divide into each could depend on your age.
If you are relatively young, a larger chunk in a higher risk category would make greater gains, and if you lose some, you have more years ahead of you to make it up. However, if you are above the age of fifty or so, most experts suggest that you take a lower risk approach so you don’t lose a chunk of your investments if the market takes a turn for the worse. It depends on how much risk you are willing to take at any age. Look at the growth rates over the long term to make a final decision.
Of course, you could take diversification in a different direction. Maybe you would rather invest in real estate or other alternative investments. You could go it alone or invest with a friend in real estate you can flip or rent. Over a period of time real estate values tend to go up, but to be sure, do some research in your area before investing your hard earned dollars in a money pit.
3 It Isn’t a “Get Rich Quick Plan”
Overall, as you track your investments, you should see them increase. If that is not the case, you might want to consider moving some funds around. That being said, you also don’t usually want to move funds around on a daily or even a weekly basis. Some stocks have downturns and then recover quite nicely. In order to see them grow you need to leave them alone and let them grow.
4 Retirement Plans
If you have the opportunity to invest in a retirement plan through your employment, you should take advantage of it. This money is usually pre-tax, which can save you some money on your income taxes. Many employers these days also offer the added benefit of matching your contributions up to a certain percentage. This is free money that you should definitely take advantage of.
5 Don’t Throw Money Away
Putting your money into a savings account isn’t an investment because it isn’t increasing, unless it’s an interest bearing account. However, even the rate of return on a high-yield savings account is lower than the rate of inflation, so you are actually still losing money over the long term.
6 Find Out What the Fees Are
When you move money from one fund to another, there are sometimes transaction fees to be paid. This is another reason not to move money around on a frequent basis. Also, if you are working with an investment company, ask what their fees are. You don’t want to be surprised by finding a large chunk of your investment missing due to deductions for fees.
If you haven’t yet started investing for your future, get a move on. You’re losing money every second you delay getting started.
About The Author
Kayla is a personal finance blogger in her mid-20s who loves to write about money topics of all kinds.
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