So you’ve decided to start investing so you can save for your future. Saving up as much money as you can before retirement age is always a great idea.
You don’t want to end up on a fixed income or even worse, working a full-time job when you’re supposed to be enjoying the fruits of your labor. Investing is scary when you know absolutely nothing about it. Make sure you learn as much as possible before you begin. Here is a beginner’s guide to making smart investments.
Focus on Long-Term Gains
New investors often come up with bright ideas to make short-term gains. For example, you know Apple is getting ready to release a new iPhone. It might seem smart to buy a ton of apple stock a few months before it’s released, and then sell all of your stocks right after the phone comes out and everyone is upgrading. The problem with this method is that when you buy and sell every few months, you’re paying a commission fee. The fee is usually around $10. It doesn’t seem like much, but it adds up when you’re constantly buying and selling. You’re also likely making less of a profit. Once you add up your profit and subtract your commission fees, you’re probably not making much. It’s best to just focus on the long-term and try to get some serious profit.
Take a Risk
As they say, the greater the risk, the greater the reward. This rings true for many things in life, especially stocks. Some of the greatest risks included McDonalds, Walmart, and other tiny companies that no one could be sure would amount to anything. The early investors made enough money to live off for the rest of their lives and enough for the generations ahead of them to live off of. Try to find some companies that seem to be just starting to bud. By the time you’re ready to retire, your stocks may have turned into a beautiful flower (full of cash). If any of them don’t pan out. The stocks of these starting companies are so cheap, you aren’t losing much.
While you should take a risk, you need to do it while still taking safety precautions. Taking a risk doesn’t mean to put all of your money in stocks and cross your fingers. Make sure you don’t use any of the money from your retirement fund, and make sure you have enough money in your savings account. Your savings should consist of enough money to cover all of your expenses for at least six months; enough for a year is optimal. It should be enough to cover your mortgage, utilities, gas, food, insurance, and whatever else you need to live. Use any other money to buy stocks or whichever type of investments you choose. If you need help, seek out a money management firm. For example, President Damian Ornani at Fisher Investments is a Senior Executive at the firm, and his experience has helped the company grow to over $60 billion. These firms know how to help manage money for any type of lifestyle.
Don’t Buy All at Once
Don’t buy all your stocks at the same time. You might want to take a day and go on a buying spree, but this is never a good idea. Keep an eye on the stocks as they rise and fall. When the stocks you want go lower than average then it’s time to buy them. You might decide to buy half and then watch it some more in case it goes lower. Of course, they could rise again, so it’s up to you whether you want to buy them a few at a time or all at once. If you’re patient, you’ll lock in the best prices on your stocks.
Think Beyond Stocks
While stocks are a great way to invest, they shouldn’t be your only investment. You need other stable types of investments as well. Investing in mutual funds, index funds, and ETFs are all great investments. Take about $5,000 at a time and invest it in one of these types of funds. You can also put it in CDs or IRAs. There are so many ways to invest, so make sure you do your homework on each investment. One of each is even better for your retirement.
Investing in your future is extremely important. Too many young people are more worried about having the latest gadget and not worried enough about how they’ll buy food at retirement age. Make smart investments so you can travel and enjoy all of your hard work.