September 2, 2020
Deciding when and how to start investing can be difficult. How does it work? What type of investment is best for me? How much should I invest? Can I afford to invest more? Navigating these questions and getting started can be stressful for even the most financially savvy among us. Learn some best practices for getting a jumpstart on investing now to give your money the most time to grow.
Before you start investing, you should consider the overall health and stability of your financial situation. We recommend that you have an emergency savings fund. Start out with a goal of $500 for emergency expenses, then over time grow it so that you can cover three to six months’ worth of expenses. Secondly, if you have any high-interest credit card or other debt, it’s a good idea to pay that down before beginning to invest.
The best place to start is with your employer. If they offer an investment account like a 401(k) or an IRA, many employers will also offer to match contributions to a certain percentage. This means you’re essentially getting free money! If your employer offers a matching program, try to contribute enough to collect all of it. A good long-term goal is to invest or save 15% of your income for retirement. If that’s more than you can afford now, start with what you can and work your way up to that rate by raising your contribution each year. If your employer doesn’t offer an investment opportunity, there are other options. IRAs, Roth IRAs, index funds, and mutual funds are all available for investors. Make an appointment to speak with a CFB Personal Banker at your local branch to discuss what type of retirement account might be right for you.
With new apps and easy ways to start investing in individual stocks, real estate or other alternative assets, it’s a good idea for your first investments to be a bit more diversified. This will allow you to gain comfort with the investment process and learn what risks are worth the possible rewards. If you’re ready to move beyond a basic 401(k), IRA, or other investment account, drop by your local branch to learn about building an investment portfolio.
Time is money—the more time you allow your money to grow, the more you’ll likely have when you take it out. Saving and investing are important pieces of your financial planning strategy. Your local CFB branch is happy to help you set achievable financial goals and help you decide what types of accounts and investments can help you reach them.
Starting to invest doesn’t have to be as stressful or difficult as it can seem. Don’t let being scared of making the wrong move stop you from taking steps to reach your financial goals. Steady investments can yield big, long-term results. Unsure about investing or want to learn more? Stop by your local branch to discuss options.