It doesn’t matter how young or old you are, there’s no bad time to think about investing your money. If you’re new to investing, you must take the right steps at the right time. You don’t want to make mistakes upfront that could cost you money in the future.
Here are some investing ideas for beginners that can provide you with a push in the right direction:
1. High-yield savings accounts
There’s no easier way to invest your money. With a high-yield savings account, you can add funds regularly and receive interest based on your balance.
When comparing high-yield savings accounts, pay close attention to those with the highest interest rate. Compare both local and online financial institutions to ensure yourself of making an informed decision as to where you keep your money.
2. Certificates of deposit (CDs)
There’s a lot to like about CDs, including the fact that you can invest in a variety of terms. Generally speaking, CD terms range from one month to five years. In most cases, the longer the term the higher your interest rate.
The one thing to watch out for with a CD is the early withdrawal fee. If you want to access the funds before your term comes to an end, you’re likely to incur a fee.
3. 401(k) and/or IRA
You can’t go wrong by maxing out your retirement account(s). If you’re new to investing, make this one of your primary goals. Once you contribute as much as you can to your retirement accounts, you can look into other options.
4. Individual stocks
With a brokerage account, you can invest in individual stocks. This may be confusing as a beginner, but the process will begin to make more sense as you gain knowledge and experience.
Tip: find an online brokerage with no fee trades. This allows you to buy and sell individual stocks without paying a commission.
While you don’t have to follow all or any of these investing paths, they’re definitely worth your consideration. The more you learn the more you’ll come to realize where you should be investing your money. Remember, it’s the decisions you make today that will impact your financial circumstances down the road. Choose carefully, stay organized, and track everything!
Which of these ideas are your favorites? Would you add any other ideas to this list?