This is a topic I’d been wanting to cover for a while because it is one of the most frequently asked questions I get when it comes to investing –
“…where do I start?!”.
While I have a 5-week course that teaches you step-by-step how to invest in stocks on your own, below I share a quick and easy 3-step process to help you kick-start your investing journey.
Spoiler alert: Some of the steps I will list you likely heard before. However, the question is – are you doing them? Growing wealth requires work. There is no magic pill or magic formula that will make you rich overnight. You not only have to do some work up front but also have to remain disciplined and consistent over time to see results.
Make sure you are doing the following:
#1. Enroll in your employer’s retirement plan ASAP (if you aren’t doing that yet). Many people don’t realize this can be their first entry point towards investing. It was mine! Take full advantage especially if your employer offers some kind of match. Enrolling in my company’s retirement plan at an early age was one of the best financial decisions I’ve ever made.
Shout out to my dad and one of my coworkers at my first corporate job (Linda) for letting me know the benefits of contributing when I was in my early 20s. Did I feel like having any extra money subtracted from my paycheck every two weeks? NOPE! However, Thank God I listened even when I wasn’t “100% convinced”.
How much you should contribute depends on the percentage you feel comfortable with. However, if there is a match, I’d highly recommend you contribute at least up to the match. Otherwise, you are leaving money on the table.
If your employer does not offer retirement contribution plans such as a 401(k), 403(b), or any kind of Thrift Incentive plans – consider opening a Roth IRA. You can do this on your own (if you want to be more “hands-on” with your investments) or through something called a Robo Advisor.
A Robo Advisor can be a great option for individuals that want to start investing but aren’t interested in managing their own portfolios. You can do a simple Google Search and type in “best Robo Advisors of [current year]”. As I always say, do your research! For a beginner, I would recommend platforms that meet the following characteristics:
- Have no account minimum requirements.
- Low management fees (I’d say 0.25% or under).
- Have a nice incentive bonus for new customers (why not?!).
Also, in general, make sure that any investment account you decide to open is an SEC registered broker-dealer and member FINRA/SIPC.
#2. Become a money hoarder. In other words, SAVE. YOUR. MONEY. In case you didn’t know – in order to invest, you will need to have some money stashed away for both, investing and emergencies. I want you to save at least $1,000 which should go into a high yielding savings account for emergencies and then save at least $500 for an investment portfolio. The point is to have a foundation and kick it up from there.
#3. Invest in eliminating your credit card debt. I left this for last because I know debt is a sensitive topic for many people. However, the truth of the matter is that in order to invest, you should have very minimal (if any) credit card debt. Why? Because the interest rates on credit cards are astronomical and, even if you make solid investment decisions, your profits (in the short term) will likely not be enough to cover the debt that massively accumulates thanks to credit card interest. Pay it off!
If you know what you’re supposed to be doing but need someone to keep you accountable and offer guidance along the way, inquire here about Girl$ on The Money one on one coaching services. I’d be happy to hold your hand through this process if you need that “extra push”.
Also, if you would like to be more hands-on with your investments, and would like to open and manage a Roth or regular investing account on your own, join our investing Bootcamp for beginners! I teach you in very simple terms how the world of investing works and how to take full advantage on your own.
And by the way – if you are someone in your 20s reading this, know that you have the biggest advantage of all when it comes to wealth creation and that is TIME. While it is never too late to start sending your money to work, the earlier you can possibly start the better.
And that’s all for now! Questions? Comments? Success stories? Share in the comments.
Cheers to Health, Love, and Profits!
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