How Much is Not Investing Costing Your Future

How Much is Not Investing Costing Your Future

Can You Afford to Wait to Start Investing
Can You Afford to Wait to Start Investing
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(MP) People who stress too much about investing often prevent themselves from taking the leap at all. If you’re ever going to achieve financial freedom the right time to start your investment portfolio is now. One of the biggest fears that folks have when considering to get started is losing the shirt off their backs. Just living life is a risk and those who don’t take risks never make gains.

Don’t bother about losing money in this fund or that fund, this stock or that. That’s a big mistake and here’s why: it might take a while for a poor investment decision to have a significant negative impact. But it doesn’t take much time for one’s choice to not invest to have a greater negative impact on their future.

The key is to save money, research, and get started as soon as possible. Most people think it requires a great deal to invest, but you can do it for as little as $7 to $10.00 per week.  First, understand the difference between savings and investments.  Saving money alone will never make you wealthy but it does provide the funds for investments. You add your savings to checking accounts, savings accounts, certificate of deposits, money market accounts, U.S. Savings Bonds, etc. You then take those savings and put them to work in your investments, such as stocks, mutual funds, bonds, etc. Although investments do involve more risk, if you make good choices, your portfolio will yield higher returns with time.

The magic of stock investing

Let’s look at what could happen once you invest $10.00 a week at 8% beginning at age 30. At age 65 your beginning investment of $18,200 will have grown to $99,402. That’s $81202 in earnings. Now, let’s examine what your investment could be supposing you started 10 years earlier at age 20. Your beginning investment of $23,400 would surely have grown to $228,563 at age 65 — $129,161 more in earnings. Now you’re beginning to see why you can’t wait to start your investment activities, you’re losing money you haven’t even made.

Stock investment help

If you’re ready to begin I recommend you consult a reliable financial adviser. Although there are apps available today that help you become your own financial advisor. However if you’re not comfortable seek an adviser who will aid you in identifying your problem areas, develop strategies to help you reach your financial goals, help you in setting priorities, save you time by analyzing investments and help you make money with your investments. But before you chose a financial Advisor here are 20 “Questions to Ask Before Hiring a Financial Advisor.”

 Accounts types

You’ll need to choose whether you’re starting out with an individual retirement account (IRA) or a general, taxable account.  IRA or Roth IRA provides certain tax advantages as an incentive to save for retirement. The bad part is there are limits on how much you can contribute to the account each year and when you’ll be able to withdraw the money.  If you’re new to investing and can afford to put away money for retirement I highly recommend doing so now.  New investors should begin with a Roth IRA.

If you already have a retirement account or need to invest money for another goal (like buying a property or setting up business), a regular brokerage account will work. Understand that your capital gains – the money you earn when you sell a security for greater than you spent for it – are taxable, as will certain dividends you receive.

Now, you’ll will need to choose your investments. My advice is to stick with mutual funds or exchange-trade funds (ETF’s) instead of individual stocks and bonds until you get your feet wet. Mutual Funds allow you to invest in a broad portfolio of stocks and bonds in one transaction instead of trading them all yourself. Mutual Funds are not only safer investments (because they’re diversified), they’re often far less expensive to invest in because instead of paying trading commissions to buy a dozen or more different stocks you’ll typically either pay just one trading commission or nothing at all (for when you buy a mutual fund directly from the fund company).

Stock investing online

After you become comfortable with investing it’s time to start trying stock online. When you buy and sell stocks online, you’re utilizing an online broker that largely takes the place of a human broker. You still use real money, but instead of talking to a live person about investments, you decide on which stocks to buy and sell, and you make your own trades. Some online brokerage houses even offer advice from live brokers and broker-assisted trades as part of their service.

Remember, until you become a comfortable investor I recommend you buy mutual funds or ETFs, either through an online brokerage account or direct mutual fund account. But after you’re comfortable, you’ll may choose an online stock investing platform such as: Scottrades, Fidelity or TDAmeritrade. I highly recommend Scottrades because they let you begin with  $7 Online Stock Trades. I’ve been achieving success on their platform for years. Money spent on tangible stuff today is costing your future tomorrow and guess who has to end up paying for it. You.

Don Briscoe
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Don Briscoe

Finance educator, advisor, and leading voice in the global financial literacy movement.Founder and editor of MoneyPacers.com.He lives and enjoys life with his family in New York.
Don Briscoe
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