5 Simple Ways to Start Investing Today

Money By Jeremy M. Cox Aug 1, 2022

Note: Netspend is not an investment advisor. The knowledge in this post is general information and should not replace the advice of an investment advisor. For more information, please reach out to an investment advisor in your area.

The internet is full of money advice. From TikTok celebrities advertising exchange-traded funds (EFTs) to people on Twitter claiming the best tech stocks, it may seem that you’re missing out on something special by not investing. While it’s not advised to take financial advice from strangers online, one concept holds true: Wise investing can help you access earning opportunities you may not get from other methods.

Why invest?

Investing uses the concept of interest to help you save money in a way that grows over time. Consider the average savings account with an interest rate of 0.6% today. A simple $1,000 investment would net you $6 in interest each year. While this may not seem like much, by investing again and again and putting money into investments with different categories of risk, you may see your original investments and interest work together. Investing uses the power of time in a way that putting that same money in a glass jar just won’t do for you.

Of course, the riskier an investment is, the more you could potentially earn on it. (But this means you could lose your money, as well.) What can you do to both minimize risk and get the most money back over time? Consider these strategies if you’re unsure about how to start investing.

5 tips for getting started with investing

Ready to invest your first dollar? These tips can work for you!

1. Start now

You may have heard the saying: “The best time to plant a tree is 20 years ago. The second best time is now.” The same thing is true for investing. The sooner you put your first dollar to work for you, the more money you could end up earning. Don’t put off this important financial task.

2. Calculate what you can afford

Whether you take advantage of a workplace 401(k) plan or you purchase certificates of deposit (CDs) from your bank, it will take money away from your monthly budget. If you don’t already know how much disposable income you have, determine that number now. Then, allot a certain amount for investing each month.

3. Use employer options first

Could you hop online and buy $500 in your favorite brand’s stock today? Sure. Is it the wisest move? Possibly not. For first-time investors, your most likely first moves should come from employer-based plans that take a lot of the planning and guesswork out of investing. You will be provided with plan details, risk profiles, and how much you need to get started. Employer options are great because they are automatic and come out of your paycheck before you have a chance to spend your earnings on something else. In some cases, they have tax benefits, too.

Bonus: Employer 401(k) plans often may come with a company match. This means they match up to 1-5% of the amount you invest— helping your money grow even faster! If you have this option available, put it on your priority list to research and consider.

4. Keep tabs (but not too closely)

It’s smart to check in on your investment portfolio at least once a month. This can give you an idea of how things are going and let you know if you need to fund your investments more aggressively. Avoid the temptation to move money around too often or react too quickly to market dips, however. Most investment options available at work or through ETFs and mutual funds are actually many stocks and investments bundled together into one package. This can help provide some stability when one or more industries or brands take a market hit.

5. Avoid fads

It can be hard to put your money in investments and take a set-and-forget approach. Ultimately, you should seek a professional’s advice if you want to explore new financial tools or some of the trendier investments being shared on social media. If a gorilla cartoon non-fungible token (NFT) or the latest alternative to Bitcoin ever seem like something you would like to try, just remember that these types of trendy investments also carry a lot of risks.

You shouldn’t expect your retirement to be made up of too many of these hand-picked and untested options. If in doubt, consult with someone who knows about the markets and doesn’t make any money selling specific investments.

Ready to start investing?

Getting started with investing doesn’t have to require an advanced economics degree. In fact, many of the best tools you have available are accessible to everyone — no matter their lifestyle or career choice. One way to fund your day-to-day activities while your investments grow is to incorporate the Western Union® Netspend® Prepaid Mastercard® in your daily budgeting, saving, and investing plan. It can help you manage your money better so you know where every penny goes — and how much you can afford to put into long-term investments every month.

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