Every month, you put money into savings, but then something unexpected happens that requires you to pull it right back out. Sometimes, you need to withdraw even more than you initially socked away. If that’s a common occurrence for you, don’t feel bad. It happens to millions of people.
All you want to do is live a comfortable life now and when you retire. Is that too much to ask for? The answer is no. However, if you don’t make good financial decisions, you’ll never get what you want. The key is to start investing your money, along with saving it. The good news: It’s much easier than you might imagine.
To get you headed in the right direction, consider these ten amazing investment tips. Remember, if you need help turning your dream into fruition, contact a professional financial advisor.
1. Start Investing While Young
The sooner you start to invest money, the faster it’ll accumulate. Here’s the thing: By making this a habit, you won’t depend on the money you put aside. That allows you to budget before retirement so that you still enjoy doing things and going places currently, but at that same time, it sets you up nicely for your retirement years.
2. Stay Aware of Commission Issues
When investing, it’s common for professional advisors to charge a commission. For instance, advisors often make strong suggestions to their clients about certain products. Unfortunately, some advisors get kind of pushy. The problem is that while that might produce huge commissions, it’s often only for the seller, as opposed to the buyer.
In other words, you could miss out on making any real money. That could quickly deplete the funds you live on and affect what you save for retirement. So, when working with an advisor, remember that you have both the right and responsibility to question the investment and the commission.
3. Invest in a 401(k)
If you currently work for a company that gives you the option to open a 401(k) account, take advantage of it right away. Even better, see if your employer matches contributions. Depending on the company, some add only a small percentage to your money. However, some organizations match 100 percent of contributions. That means if you put $200 a month into a 401(k) account, the company also contributes $200.
If you’re unhappy where you currently work or perhaps unemployed and looking for a job, make that part of the decision-making process. Although it won’t do much for you now, when you retire, you’ll have the funds to fully enjoy your “golden years.”
4. Automate Investments
This is another great way to budget for expenses now and put money aside for retirement. What you don’t see coming in doesn’t have any impact on how you currently spend. Yet this allows you to consistently put money aside. When you retire, you’ll have the funds needed to enjoy life to the fullest.
5. Stop Trying to Time Different Markets
The investment market changes continuously. Although seasoned professionals do a much better job at figuring out when to invest and when not to, individuals new to investing struggle…a lot. The best option is to focus on dollar-cost averaging. In simple terms, this involves investing the same amount of money every month. The key is to purchase fewer shares when dealing with high markets and then to buy more when markets drop.
6. Pay Attention to Interest Rates
When it comes to investing, you have multiple possibilities. That includes everything from a traditional savings account to a 401(k) to an IRA to stocks and bonds and more. The rule of putting your money into accounts with high interest before you retire also applies when preparing to save for your retirement. Even if you’ve banked with the same institution for years or decades, you might want to switch.
7. Understand Risk Tolerances
Risk tolerance is unique to every individual. So, you need to identify yours. By understanding this, you’ll have an easier time investing in riskier endeavors and suffering from losses.
If you have a hard time losing even a small amount of money, then choose stable investments. Otherwise, you can work around your specific risk tolerances for riskier investments. Again, a professional financial advisor can help you determine and understand this aspect of investing if needed.
8. Remain Informed
To make money that you can enjoy now and more to enjoy when you retire, you don’t have to be a financial guru. However, you should stay informed of what’s going on in various markets. That includes staying on top of trends in global and US economies. After all, you work incredibly hard for your money. So, when investing, you want to make the highest-yielding decisions possible, and much of that comes from knowledge.
9. Reassess Your Portfolio
Several times a year, reassess your investment portfolio. As mentioned earlier, markets and the economy change all the time. If you don’t do this, you could end up with a portfolio that becomes stagnant. If you need to make a change or two, do it, but at the right time.
10. Meet With a Professional Finance Advisor
While we’ve said it a few times already, it’s worth mentioning again. There’s never a wrong time to discuss your current savings and retirement plans with a financial advisor. It doesn’t matter if you’ve been investing money for years or you’re just getting started.
Just make sure you choose a trusted and highly respected expert. You want someone who has a lot of experience and in-depth knowledge. Together, you can come up with a strategy that makes life comfortable now and after retirement.
Make Your Savings Efforts Count
Don’t get stuck putting money in the bank only to take it right back out. You’ll never get ahead that way. Instead, consider using these tips so that you can invest the right way and earn the most possible.