How to invest money wisely: a guide to the first steps in becoming a savvy investor


It is a huge mistake that a lot of people make that investing and making money is something only the rich do. You don’t have to be rich to invest at all. There are so many options available that it is possible for anyone to learn how to invest money wisely. It all starts with a little extra money. You don’t have to play on the stock market or even buy into a company. You can simply open a CD account, a money market account, or even a savings account at a bank.

Let this be smart investing tip # 1: start doing it as soon as you start having extra money you can save. The younger you are, the longer you can wait for money to wait for interest to build. If you invest in stocks, the longer you have to wait for the market to move in a direction that is favorable to you.

Another smart and essential thing to do is build up some savings for emergencies and short-term goals. Choose an online bank that offers a high APY and either create a savings account or buy a CD for 6 months – 2 years. Why keep money hidden around your house for emergencies when you can keep it in an account that will earn interest. Even if it’s only $ 500, you’ll still end up with more money than you started with.

How to invest money wisely away from banks

If you decide to go with the CD option, just make sure you keep the money for the agreed upon length of time so that you are not charged a penalty fee for early withdrawal. In an emergency, most banks will allow you to issue a certain number of checks per month (usually around 6) or make online payments (up to 6).

Are you interested in how to invest money wisely when it comes to stocks? It depends on age – you should base these investments on your time horizon, and your time horizon is how long you need to hold your portfolio before you start spending it. A general rule of thumb is to subtract your current age from 100 and then use that number as the percentage of stocks to own in your retirement portfolio. If you are 35, your investment portfolio should be around 65% stocks.

Of course, stocks are not for everyone. There are other investment options, such as real estate and currency trading. To really know more about how to invest money wisely, it’s good to have the right tools and resources at your disposal. Motley Fool is a leader in investment choices and education. Sign up today for the latest recommendations for actions, “starter actions”, community and investment resources, and more.

Source by George Botwin

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