 | | |
What should I do if I'm in my 20s and just starting to invest?
| |
Just by asking the question, you've shown you have what it takes to become a successful investor. That's because the first thing you'll want to do is ask lots more questions--an informed investor is the best kind.
| |
|
Learn as much as possible, from as many different places as possible: In the end, it's your money to invest, and knowledge will be your strongest protection and greatest asset.
| |
|
Because you're young, you have time on your side-- a huge advantage for any investor. The most important step to take, once you've acquired some knowledge, is to just dive right into investing. Even if you put aside only a small part of your paycheck into your 401(k) plan or a low-cost mutual fund--the best places for a novice investor to start out--the payoff down the road will be great. If you started putting just $50 a month into a tax-deferred account at age 25, and continued until age 65, you'd end up with $91,000 more than someone who waited until age 35! (This figure conservatively assumes an annual return of 8%.)
| |
|
If you're worried that you couldn't possibly find the extra money to invest, take out your sharpest pencil and get ready to scour your spending habits. You may find that a lot of excess spending goes to those "unrecorded" expenses like your morning latte or the magazines you buy on the way home from work. Remember, to reach all those goals you may have for the future--a house, a second car, college for your kids some day, even retirement--you'll need to be disciplined about saving and investing, and there's never a better time than the present to get your plan in motion.
| |
|
