Are you thinking about getting into investing? Don’t wait.
If you have your expenses covered and money saved for emergencies, start investing as early as you can. The longer you invest, the better.
If your employer offers a 401(k) match, take advantage of it. That’s free money.
If you want to invest in more than your 401(k), here’s how to get started:
Figure out your goals.
What are you investing for? Maybe you're saving for an epic vacation, a down payment for a home, or your retirement.
Your goal will determine your timeline and your investment strategy.
Open an investment account.
If you’re saving for retirement, consider investing in a traditional or Roth IRA. These accounts can save you money on taxes.
If you’re saving for a down payment or that epic vacation, go for a taxable brokerage account.
Choose your investments.
If your goal is short-term, you may want to focus on stocks. While riskier, stocks generally have higher returns than bonds.
If your goal is far away, consider investing in stocks and transition to less-risky investments like bonds as you approach your goal.
Mutual funds and ETFs are both great options. Investing in funds lets you own many stocks or bonds.
Be honest with yourself.
You may not want to manage your investment accounts. You can turn to a full-service brokerage firm or a lower-cost robo-advisor.
A simpler option may be a target-date fund. It's a mix of stocks and bonds that changes over time.
Regardless, remember to invest with your goals in mind.