There’s no need to work in Wall Street to get into investment. On the contrary, anyone can get their money to work for them. All it takes is to read our beginners guide to investment.
When you are young, you rarely get to think a bout your future. Nevertheless, one of the smartest things to do is to start investing as soon as possible. That way, if the road get a bit rocky at some point, you will be covered and have even more chances to quickly recover your financial health.
First of all, the key is to understand the basics of investment: interests. For any amount you invest, you will keep in mind the interest rate it will eventually pay. You don’t need to start with big amounts. Actually, as long as you are consistent with saving each month, you’ll be on your way.
The best way to organize your personal finances is as follows: first, make sure you can pay any expense or debt you have every month. Once that’s off the table, contribute to your retirement plan, especially if your employer has a matching contribution benefit. And third, put aside the maximum amount of money you can to invest. This will be your capital.
Know your options
Besides a retirement fund, there are many short, mid and long term investments with a wide variety of features, initial deposits and risk levels. Try to keep it simple at first. Among many other investment options, there are:
Each stock represents, basically, a tiny portion of a company. So if you own a tiny part of a company, you are entitled to a portion of its profits. The more stocks you own, the higher your profit portion will be, as long as the company is profitable. Simple math.
A bond is like a loan you give to a company or the government. They will use your money for a fixed period of time and then give it back, plus interest. This is actually a low risk investment option, so interests aren’t really high.
3. Real Estate
This might seem a bit too much for a beginner, but there are actually a lot of crowdfunding platforms that will allow you to start with as little as $500. Real Estate is usually a safe investment as properties tend to appreciate with time.
Although it might seem a little too much at first, it’s always smart to use your money to make a little extra by investing in it a safe and productive way.