Sometimes it can be a little frustrating when you are starting something new. But, when a friend reminded me that whenever you start something new, you don’t get to start in the middle, you have to start at the beginning, it helped ease my mind.
Investing is the same way: if you want to invest and have never had any investments before, you are bound to feel frustrated at times. But soaking up as much knowledge as possible can help you with the basics. So, here are 4 questions and answers for new investors that can help you get started investing.
1 What Are Your Investment Goals?
Why do you want to start investing? Are you saving for a college education for your children? Is your goal to have the money to travel in the future? Or maybe you are saving so you can buy a house and get out of the noisy apartment building you currently live in. It could be that your future retirement is the reason you want to start investing. Any of these reasons could determine how much risk you are willing to take in your investments.
2 How Old Are You?
Another consideration when you are a new investor is your age. All investing involves some risks, but your strategy can be different depending on how much time you have to reach your goals. If you are relatively young you can choose mostly higher risk investments and watch those investments grow more rapidly. If you do sustain some losses, you have time on your side to help you make them up. However, if you are approaching middle age you might put some of your money into lower risk investments as a precaution since you would have less time to make up for losses if they should occur.
3 What is Your Schedule Like?
When you are interested in investing, but you don’t know where to start, one thing you can do that might help is to learn about it first. Do some research by reading magazines and books or look for articles on the internet that can help you learn and gain insight about the many different investment options available to you. The more you learn the better your comfort level will be as you start putting your money into different investment options.
Of course, some of us have more time than others in our schedule to learn about investing. If your schedule is tight and you don’t have the time to do research, you could hire an investment advisor, like Betterment, to help you reach your investment goals.
4 How Much Do You Have to Start Your Investments?
Depending on your situation you might have very little to start investing with or a lot if you have saved for a while. If you don’t have a lot to start out with you might consider the fees charged by fund managers because they can rack up pretty fast and take a chunk out of any returns you make. Also, even if you are trading stocks on your own, the more you trade, the more fees you have to pay. A robo-advisor might be a great place to start if your investment funds are limited because they can help you reach your investment goals and have fairly low fees.
Just as a friend once told me, you have to start at the beginning whenever you are starting something new. Hopefully these have answered some of your questions about investing.
Kayla is a personal finance blogger in her mid-20s who loves to write about money topics of all kinds.