Start Early and Save Often
Investing can seem challenging, especially for those who are just starting. But with the right mindset and resources, anyone can successfully embark on their investment journey. Here’s a simplified guide to make investing easy by starting with the basics of how to get and save money to invest it.
Take the Time to Learn a New Skill
In today’s digital age, different online platforms have made it easier than ever to learn new skills. These skills can include the basics of investing. To maximize your spare time, consider utilizing online platforms to expand your knowledge.
What Are You Doing with Your Spare Time?
Are you scrolling through different social feeds for hours mindlessly? This is the time to replace those time-suck habits with money-making ones using the same social channels! Aim to dedicate at least an hour each day to learning something new. Topics to explore include:
- DIY Tutorials
- Money Habits
- Building Wealth
- Investing Basics
- New Technology Trends
- Online Jobs Suitable for Teens
Strategy: Make a Plan
Start by mastering a new skill that you can use to generate a primary or secondary income. Whether the skill is how to design websites, fix broken iPhone screens, or any other valuable skill. Once you feel confident in that skill, let your network know and ask them to spread the word. Share what you’ve learned with friends, and consider joining community groups on platforms like Facebook or Nextdoor.com.
Have the Right Mindset
A positive and proactive mindset is critical as you begin your investing journey. Remember that:
- Saving vs. Consuming: Emphasize saving and investing your money instead of spending it.
- Start Early and Often: The earlier you start investing, the more you can benefit from the power of compounding.
- See Your Money Grow: Regularly contribute to your investments and watch your portfolio grow.
Get in the Game
To be successful, you need to become familiar with essential investing concepts. Here are a few fundamental topics every new investor should understand:
Compound Interest
This is the key to making money work for you. Compound interest is when you earn interest on your initial savings and the interest that accumulates over time. Essentially, it’s money making more money passively without risks.
Stocks versus Index Funds (ETFs)
Understanding the difference is crucial:
- Stocks: These are shares of individual companies. They can fluctuate greatly, depending on market performance.
- ETFs (Exchange-Traded Funds): These are collections of stocks that track various indexes like the S&P 500. The S&P 500 specifically tracks 500 of the largest companies in the U.S. stock market. They provide a less risky way to invest in the market.
Active vs. Passive Investing
- Active Investing: This involves picking individual stocks with the hope that they will increase in value. If you’re a younger investor, different online platforms can help you easily start this journey.
- Passive Investing: This type of investing is generally considerably less risky. With passive investing, you invest in index funds that match the market’s performance, like those tracking the S&P 500.
Fractional Shares
Don’t have enough capital to invest in entire shares of high-priced companies? This should not deter you, as fractional investing eliminates this issue. Fractional shares allow you to invest smaller amounts corresponding to a portion of a share.
This means you can own 1/5th or even 50% of one share and continue to own more as you have more income. Eventually, you can accrue and own one and then multiple shares of a high-value stock. This makes investing accessible for everyone.
Research Brokerage and Retirement Accounts
Essentially, start by finding the correct brokerage account for your needs. Investigate various options and start investing with small increments that fit your budget. Look for platforms that match your investment style, whether you’re going the active or passive route.
You should then repeat this step for retirement planning. Even if this isn’t an immediate concern, knowing the options is vital to get ahead of it.
Starting your investment journey doesn’t need to be overwhelming. By taking the time to learn, having the right mindset, and utilizing the right strategies, you can begin to invest. These steps will allow you to set yourself on a path toward financial growth and freedom. Remember, the key is to start early and save often to begin the investing journey.
Important Disclosures
Investment Products are offered through Amerant Investments Inc, a dually registered broker-dealer and investment adviser registered with the Securities and Exchange Commission (SEC) and member of FINRA/SIPC. Amerant Investments is an affiliate of Amerant Bank N.A.
The information provided here is for general informational purposes only and should not be considered a customized recommendation, personalized investment advice offer, or solicitation for the purchase or sale of any security or investment strategy. The investment strategies mentioned here may not be suitable for everyone. Each investor needs to review an investment strategy for his or her own situation before making any investment decision.
Presentation does not apply in jurisdictions where its use has not been approved. Some products or strategies may be complex or unusual. Make sure you have a clear understanding of the products before investing. Investments may have different tax consequences in different jurisdictions and will depend on the circumstances. AMTI does not offer legal or tax advice, please consult your legal, CPA, or other tax professional regarding your situation.
Before investing you must consider carefully the investment objectives, risks, charges and expenses of the underlying funds of your selected portfolio. Please contact AMTI to request the prospectus, private placement memorandum or other offering materials containing this and other important information. Please read these materials carefully before investing. Not FDIC Insured | Not Bank Guaranteed | May Lose Value | Not Insured By Governmental Agencies
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