Throughout your life, people will always tell you that going to school and getting a job will give you the golden ticket. But sometimes, that is not the case. Just ask any good businessman, and they will tell you the same thing: investment is the real golden ticket.
When you decide that you want to put your money on something and try to make it grow, you have to understand that you need a good understanding of the playing field and how everything works. So, for now, here is a beginner’s guide to getting started on investments.
A lot of times, people, especially after they hit a certain age, are ashamed to try and learn something new. Some even feel guilty about not learning more when they were younger. But the thing is that you can’t get into investments without first determining its basics.
The first step to making your journey in finance is dropping any feelings of shame and guilt, and learning everything you can. That can be done either through intense research with the use of the internet or a library or by asking friends who have made investments of their own.
Now that you’re willing to learn everything you can, it is now time to set your financial goals. What do you want to do with the money you will earn? Do you want enough money to retire in comfort? Or will you use it for your children’s college fund?
Setting goals for your finances will give you a clear view as to what kinds of investments and accounts you should involve yourself in. It’s also a good idea to identify how long you plan to invest and how much is your target goal.
Before you take the plunge, make sure that all your other finances are in order. This includes making sure that you have an emergency fund up and running, high-interest debts are paid for, and everything else is within budget.
Next thing you should work on is your retirement plan. Go over the retirement plan that you have with your current company, and try to see if you have any other plans from previous jobs that you may have forgotten about.
To know more about your current retirement plan with your office, book a meeting with your HR person to have a thorough discussion on the matter.
Just like in any field, investment and finance have its own set of jargon that you need to understand. You can’t look lost when you talk to your financial advisor, and he starts throwing out terms like bonds, securities, index fund, etc.
You have to be in the know and can ride the wave of confusion that is the finance world. And to help you get started, here is a short list of some of the terms you will undoubtedly encounter:
As a final note, talk to a fee-only advisor about starting this financial journey. Choose a fee-only advisor so that you end up paying him for his services, instead of him taking a cut at your investments. Doing so can help you understand more about what you’re about to get yourself into and will allow you to understand the possible consequences of your actions better.