As young professionals we hear a lot about the importance of investing. You won’t be able to get rich or save for much of a future with money in a savings account. However it can also be really daunting as you’re getting started! If you want to make an investment for the very first time, or if you have experimented with practice investment accounts before but never actually put down any of your hard-earned cash, then this is the guide for you. Here you will find out what approach you need to be taking when it comes to your investment, so you can ensure that you always make the best decisions.

Know your Goals

Setting a goal is always a good thing to do, as it gives you something concrete to work towards. You will need a long-term goal if you want to track your investments as well as riding any market volatility. If you want to save for your retirement or if you want to save up for your children’s future, then you need to document goals like this too. Of course, during your short-term market falls, you also need to reflect on your goals so you can make good decisions. If something happens to the market but your goal is to save for retirement then there is a high chance that you can ride out the wave without cashing out early.

Set up Regular Investments

At the end of the day, you do not need a huge sum of money if you want to start investing. Drip-feeding the spare money that you do have each month is always a good thing to do. In fact, in some ways, it can benefit you. It will help you to hedge against any economic uncertainty too. If you have a set amount that you invest every month, you can buy more shares when the value is low and less when the value is high. This will smoothen out your portfolio while helping you to take advantage of the current economic situation. If you aren’t sure what to invest in then remember, it is now easier than ever for you to buy precious metals online. This method is often called ‘dollar cost averaging’ and I’m a big fan of it myself!

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Use Tax Advantage Funds

Remember that you can use tax breaks to your advantage. This means that it is very easy for you to put more money into your future. If you are not using tax allowances to your advantage, then you could be making a huge mistake here. Common tax advantaged funds are: 401ks, IRAs (which are both retirement), HSA/FSA (medical related), or a 529 (education related).

Manage Emotions

If you let your emotions dictate what happens in regards to your investment decisions then this is not the most sensible thing you can do. Sure, it is normal for you to feel some jitters if you notice that the stock market is failing, and this is especially the case if you are investing for the very first time. That being said, you have to make sure that you hold your nerve. Once you have been able to dip your toe into the market, make sure that you stay there.

Diversify

It is a very good idea for you to try and choose a spread of investments if you can. Cash, equities, bonds and more are all very good for you to be taking advantage of and the main reason for this is because different assets work in different ways. They also work differently according to market conditions too. For me I diversify using index funds, which is buying into a basket of stocks. Instead of picking a particular stock I essentially get to buy into hundreds of stocks all via one index fund. I’m no certified expert but I keep most of my money in VTI, which is Vanguard’s index fund.

TLDR

Getting into investing can feel like a lot but it doesn’t have to be! Start small, start with boring investments, find something you understand and like and invest in small dollar amounts on a regular basis!

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