Easy tips and approachable suggestions to kickstart your investment portfolio at any age
You just do. You get your toes wet and start. To many, investing in the stock market feels like a massive, overwhelming to-do that requires complete financial organization before you even begin. Its not. Yes, it requires a bit of research but start small... it's the best way to get comfortable and learn.
Our Recommendation: First and foremost, determine that you are ready to begin investing. If you have any high interest credit card or personal debt (we consider high debt above a few percentage points), or no cash saved, or if the thought of watching any of your investment fluctuate (think: decline) with the market, then you may not be ready to start investing. If you are ready and it still feels overwhelming, start with small dollars and take advantage of some of the brilliant online platforms with low minimums to walk you through an appropriate plan.
1. Check your debt. Any high interest rate personal/credit card debt? Pay that off first.
2. How do you feel about losing principal while the market fluctuates in the short term? Because the market will go down while you invest and you must be able to stomach this. Over the long term, the markets go up. If you can be long term and hang on during the fluctuations then you're good.
3. Start with your 401(k). If you have a 401(k) (or 403(b), 457 plan etc), the first step is to invest enough in this plan to receive your free employer match (if you invest a certain percent of your salary, your employer will "match" it with their funds). Not doing so, leaves money on the table... your money, that you are earning and your employer assumes is part of your overall salary package.
4. Open a no or low minimum account online. There are some brilliant new platforms out there allowing individuals to invest with really small dollars ($5 in some cases) either in individual stocks (specific companies you'd like to invest in) or basic market investing (through ETFs and Index Funds).
5. Just Start. Start with the smallest balance you are comfortable with and watch it for a few months. Then, as you get comfortable, add more. Eventually, you should be investing with consistent exposure as we like to call the dollar cost averaging strategy as a way to get comfortable with the markets.
6. What to invest in? It depends on what platform you end up using. If you simply want to start with some exposure to the markets, start with a roboplatform that will help you determine an asset allocation you are comfortable with. If you are looking to invest in specific stocks, look for an online platform that charges low to no commissions and that has small minimum account size.
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