How to start investing – Step by step guide

start investing
start investing

When you earn, you would want to invest your money in a better place. Also, you will have many questions about where, when, how to invest that money. As an adult, when you get your first job, you plan to make those smart choices and start investing.

When you wish to invest, the major thought pops in your head would be, what are benefits it is providing you with? Which is essential to look into? To clear the biggest misconception about investing, that only rich people can invest. National Resource Connect is here to tell you how to start investing.

We understand how tricky investing can be, so here’s our step by step investing guide for you!

start investing
start investing

Things to keep in mind

  • Begin investing as soon as you earn, the younger you are the better it is
  • Investment is the best option for you to put your money to work
  • Decide how much you want to invest, it depends on your investment goal
  • In the beginning, explore investment options to get the better return
  • Make a room for investment in your budget

A step-by-step guide to starting investing

Open your Investment Account

You can open your investment account with 401(k) or IRA (Individual Retirement Arrangement), these are the best saving plans you should begin investing in. A 401 (k) is an employer-sponsored saving plan, where you contribute a portion of your income into your retirement saving account. The amount is deducted automatically from your payroll, making it easy to save.

401(k) plans also provide you with tax benefits. Traditional 401(k) contributions are made with pre-tax dollars, meaning you won’t pay taxes on the money until you withdraw the funds.

Many companies are offering Roth 401(k) plans. With Roth 401(k) plans you contribute to the after-tax dollar, this means you won’t be taxed at the time of your retirement withdrawal.

Roth IRA(Individual Retirement Arrangement) is also an option for you to start investing. So, as experts say, invest up to 15% towards your retirement plan. When you have matched the employers’ contributions, Roth IRA is also the right place to invest. It is a retirement saving account that allows you to pay taxes on the money you put in. The money in this account grows tax-free, which means you won’t owe taxes at the time of retirement withdrawal.

As of 2020, you can contribute up to $6,000—or $7,000 if you age 50 or older.

Investment options for you

Stocks

Investing in stocks means you own a share in that company. You need to buy the stock of the company to make this investment. Buying stocks means small ownership in the company. It is simple if the company profits you earn, and vice versa. The amount of profit fluctuates according to the company’s performance and also the economy.

Acorn You know saving does not mean cutting more. All you need is some smart steps to adopt to save money. With Acorn, you take better control of your spending, your money matters. It has three levels of membership available for you. Lite: Includes a taxable investment account, Personal: Adds an individual retirement account and a checking account-Family-Includes everything in the lower tiers. Besides, it allows you to open an investment account for kids. If you are thinking about saving, you better start working on it.

start investing
start investing

Mutual funds- Start Investing

The more you invest, the more you make. A mutual fund is when you pooled your money to invest in various companies. It is the best option for the long-term progress of your investment. With Mutual funds, you can diversify your investment with various companies.

Investing in Mutual fund offer a diverse blend of stocks and bond for you. Unlike stocks, mutual funds are not traded in the stock market. If you want to buy or sell shares of a mutual fund, you need to approach an investment company who manages the fund. However, mutual funds require a little more money to invest, which might be steep for beginners.

Aspiration– It is a financial firm that helps you make saving, investing, retirement plan better. It provides services to spend your money better and has great rewards too. You can now spend, save and invest with a conscience.

Exchange-traded funds- Start Investing

A basket approach of investment, which means if you are confused with which companies to invest in, no problem. ETF is the best deal for you to invest without choosing them individually, they differ from mutual funds as they are traded throughout the day. Like stocks, they are purchased for a stock price, so if you are having a small budget this is the option. It has an affordable price for you to invest in.

Real Estate Investment

Real estate investment could be one way to make more money. So, If you love investing and want to diversify your income, here are some Best Ways to Invest in Real Estate. The more time you spend here, the more you will earn.

What is your strategy?

Now that you know your options. It is important to have an investment strategy to reach your goal. So, decide what is your investment goal, is it long term (like retirement) or short term? Take advice or working with a financial advisor would be a great way to build your financial strategy.

Start Investing Early

You have thousands of investment options to explore- to build your wealth might also take time. So, it’s best if you start early and earn more and more with experience. The longer your money is invested in equities and share the more it will grow.

Start investing now!

You know, NOW is always the best time to make that investment. The earlier, the better is something I would like to repeat thousands of time. You can also work with a financial advisor to make better investment choices. But, remember now is the time for you to put your money to work.

Just remember you will evolve in your decision just like your money. You need to be patient enough to let your money grow. As you see there are so many investment opportunities for you, choose the one that fits your requirements and goals. See the risk factor and details of everything carefully, remember you have to invest according to your income.

We hope you make the best choices with your money and invest better. 

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