If you want to make headway on building wealth, simply saving money might not be enough. To optimize your savings, you should start investing.
Investing is an important building block for a sound financial future — and it can help you get higher returns on your money than you’d get from a savings account or certificate of deposit. Learn the ins and outs of investing 101 with these essential tips from experienced financial professionals.
Here are the best investing tips for beginners:
1. Set the Stage for Sound Investing
Before putting a dime in any investment markets, set the stage for sound investing.
“First, set up a budget with all monthly and infrequent expenses such as insurance and taxes, with 20 percent of gross expenses targeted toward savings,” wrote Mark Morelli, a professional financial writer. “Next, get rid of all credit card debt and car loans. Third, create and maintain that important emergency fund.”
2. Ask for Help Setting up Your Investment Account
For brand-new investors, the process might be overwhelming. Here’s how Julie Rains, long-term investor, journalist and publisher of “Investing to Thrive,” recommends getting started:
“If you are unsure of how to open an account, fund an account, or even select a mutual fund or exchange-traded fund — call the customer service agent at a brokerage firm. Representatives will answer questions and [walk] you through the process. Generally, they won’t give specific investment advice, but can point you to tools that guide your investing decisions.”