Part of financial responsibility is investing. Today, you can invest your money in a variety of products. Examples of these are stocks, land, bonds, precious metals and commodities. By investing early and maintaining your portfolio keenly, you can reap a good harvest after your investment matures. Here is how to begin investing your money.
1. Learn how to save
Saving your money and investing it are closely linked. They both instill the discipline of limiting today’s spending for the benefit of tomorrow. You learn how to put aside your money so that you can live on less today with a vision of having more tomorrow.
You can begin with a small amount of money such as $10. Simply put aside this amount every week in a savings account or a piggy bank. Maintain the process for a period of one year without failing. This is how to learn how to save and invest in the future. The discipline that you learn from saving helps you to become a good investor.
2. Take part in your employer’s retirement plan
Employers today offer a retirement arrangement that is known as the 401(k) plan. It allows employees to invest a percentage of their salary in this plan and watch the money grow throughout the duration of their employment.
You do not have to earn a lot of money so as to take part in the 401(k) plan. You can begin by investing only 1% of your total salary. It will be deducted automatically and directed to the retirement plan. You can increase this percentage over time and watch your investment grow. Eventually, you will have access to all your invested money plus the interest accumulated throughout your career. It’s a great way to begin investing.
3. Invest in some Exchange Traded Funds (ETFs)
An Exchange Traded Fund allows you to invest in a group of stocks and bonds with a single purchase. They are a low risk way to begin investing your money. Exchange Traded Funds (ETFs) track the performance of an index in the stock market for example the S&P 500. After that, they move in the general direction of the index. Hence, your investment can grow gradually according to the speed of growth that the index is posting.
ETFs are less volatile than individual stocks. You can invest in them through mutual fund companies. It is important to note that there is a minimum investment amount of between $50 and $5,000 depending on the mutual fund company that you are working with.
4. Invest in blue chip stocks
Once you have learned how to invest in ETFs, you can devote part of your capital to blue chip stocks. These are stocks of the companies that are big and well known. They are under the public eye and highly competitive. Hence their stock performs well.
Despite commanding high stock prices, research has shown that blue chip companies are more stable than others. Therefore, shell out some of your capital and purchase blue chip stocks. They are known to have a good return on investment.
Investing is a sure way to grow your wealth. It allows you to multiply your money over time. You can re-invest your profits instead of cashing out. This results in a large portfolio in your sunset years.
The tips above can help you to get started in the exciting world of investing. Read them and learn how to go about it. Share them with your family and friends too over Facebook and other social media platforms. Help them to build wealth just like you. More about investing can be found by visiting www.moneyunder30.com/start-investing-with-little-money.
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