Are you interested in delving into the world of investing but simply have no clue where to start? New investors are enticed by the concept of investing and everything it entails. According to Investopedia, “Investing is the act of allocating resources, usually money, with the expectation of generating profit.” With the boom of gamification trading apps in the digital age, investing is made easier and more accessible than ever. Upon assessing the existing demographics, there’s a newfound interest in investing taking over Generation Z and Millennials. These digital savvy generations have a good grasp of investing parlance and are seeking to engage in the competitive, fast pace of the ever-dynamic financial world. The new generation of future investors entering the market can find it daunting to navigate without an existing framework. The interested beginner faces a few questions. For example: what is the right way to invest during these volatile times? How can an individual with no financial background begin on their investing journey? How much do you invest?
Here are four factors to take into consideration for beginners:
- Budget, budget and budget. Invest time and effort into creating a budget to set your financial goals. It’s important to consider how much and how often you can invest. Are you familiar with the real 50-20-30 budget rule? This simple rule is a framework for budgeting. It consists of three categories: 50% for essentials, 20% for saving, and 30% for miscellaneous. The elements of a budget are: income, fixed and variable expenses and personal financial goals.
- Research to understand the various Invest options. There are an overwhelmingly vast amount of investment options. The availability ranges among individuals, groups, and companies; it can maneuver into any sector of your liking. Some more popular options are Roth IRA, 401k’s, stocks, bonds or mutual funds, ETFs,REITs
- Open an investment account. There are many technology applications that facilitate investing, especially in our booming digital world. These applications engage beginners with gamification methods and are easy to navigate. A few examples of these applications are: InDinero, Acorns, Wally, Mint, and Robinhood.
- Pick an investment strategy. When selecting a strategy it is important to adequately plan and evaluate which strategies will increase returns with minimal risk in order to meet financial goals. It’s imperative to carefully assess personal financial factors. Don’t skip on doing your research. These are the 4 Investment strategies: Value Investing, Growth Investing, Momentum, Investing, Dollar- Cost Averaging.
The Financial Fitness Group offers a variety of online financial education programs. For the beginner, Financial Fitness Group can guide from the foundations of finance to advanced financial planning. FFG offers resources Investing learning solutions in our extensive library of content. Use these custom-curated tools to significantly improve your financial knowledge to better achieve your financial goals