1. Create A Solid Plan
Before you placing money into investment funnels, make sure that you create a plan. Trying to move forward without doing this will do far more harm than good.
The first thing you need to do would be to create a budget of your necessary expenses; 20 percent of this should be the amount you add to your savings. Next, eliminate all of your debts. Lastly, set aside a fund for emergencies.
2. Ignore Couch Potato Investment Advice
Many investors thing that they need to seek out information from business commentators on television in order to do well. You cannot just place all of your trust into someone you saw on CNBC.
Beginners need to seek out better avenues for investment advice. Thinking in a short-term manner will not lead you to long-term financial success.
3. Seek Out Assistance When Setting Up An Investment Account
Many newbies find this part of the process a bit overwhelming. Julie Rains, a long-term investor, journalist and publisher of “Investing to Thrive” offers the following advice:
If you are lost when it comes to opening an account, adding funds or even choosing the right type of fund for you, get in touch with a customer care agent at a brokerage company. They will answer all of your inquiries and help you navigate the entire process. They can help you get the right mix of long term and short term investments. They will not offer you any specifics, but they will lead you to the proper resources.
5. Learn Where To Invest Your $
For beginner who are likely to start investing in one account – typically an employer offered 401(k) plan, it is easiest to select a target date fund since this means you can set it and not worry about it at all. Also, you should contribute enough into this account to receive the maximum employee match amount.
6. Use Dollar-Cost Averaging
This is the practice of transferring a set amount to an investment account regularly to purchase stocks and funds. Being this disciplined will allow you to purchase more shares when prices drop and fewer when prices are on the high end. The best way for you to do this would be to invest in a 401(k) or 403(b) regularly. Otherwise, you can authorize transfers to an investment account from your paycheck.