By Joe Vitale
We all know we should be growing our wealth—but how to do that is not so obvious. Well, investing your money is one of the best ways to grow your funds. However, a quick Google search on the topic will yield an overwhelming amount of information and complicated investment jargon can quickly get confusing.
So I’m going to simplify it for you. Whether you choose to purchase stocks and bonds, contribute to a retirement account such as a 401(k), or even invest in real estate, there are rules to investing wisely. Follow these seven rules of investing to set yourself up for significant financial gains.
1. Prepare Your Finances
Before you begin investing, you want to ensure that you have a solid financial foundation. (1) This includes paying off high-interest debt and having a small emergency fund of easily accessible liquid money.
If you begin investing before you’re prepared, it can backfire down the road.
2. Know Your Purpose
Once you’re financially prepared to invest, it’s time to set a purpose. (2) Your reason for investing could be to save for retirement, put aside money for college tuition, or save for a down payment on a home. Knowing your purpose makes the journey more meaningful.
Along with identifying your objective, you want to determine when you’ll need your money back. This will guide you in deciding the type of investment you make since some are better for the long term while others are better for shorter periods.
3. Determine Your Investment Amount
Now it’s time to determine how much you will invest. When making investments, you want to get in the habit of making contributions regularly. You don’t need to make substantial investments. It can be as little as $100 a month, going up to thousands of dollars per month, depending on what you can afford.
4. Automate Investing
If you have a 401(k) through your job, you are investing, and your investments are likely automatic. When you don’t have to make those payments manually, you are more likely to be consistent. It’s best if the money comes out of your paycheck or your checking account without you having to do a thing. If it’s left up to you, you’re more likely to decide against making your investment.
5. Educate Yourself
Investing isn’t a sprint; it’s a marathon. Most people don’t get rich overnight, so you don’t have to make spur-of-the-moment decisions about your investments. Instead, take the time to educate yourself about the choices you’re making. Also, don’t rely on someone else to tell you everything about investing. Even with a financial advisor giving you advice, you should have a general idea of how investing works.
6. Start Early
Since investing is a marathon, time is on your side. The longer you allow your money to sit in an investment account, the more money you’ll usually make. Don’t delay investing once you’re financially prepared. Each year you wait could cost you hundreds and thousands of dollars. The interest you’re losing out on is essentially free money! Once you educate yourself on investing, get started. Your future self will thank you.
7. Diversify Your Investments
Have you ever heard of the phrase “Don’t put all your eggs in one basket”? Well, that’s especially true when investing. Since investing is never a guarantee, you want to invest in various formats and companies to reduce your risk. That way, if a company goes down or an industry tanks, you don’t lose all of your investment funds.
We’re Here To Help
Investing is a game of strategy, and as long as you’re prepared to make calculated decisions over a long period, you can significantly increase the return on your investment. When it comes to investing, while it is imperative to educate yourself, it’s also best to consult with a financial advisor. Our team of knowledgeable advisors at American Retirement Advisors, Inc. can help you create the best investment strategy given your unique circumstances and financial status. Call us at (855) 756-5700 or email firstname.lastname@example.org to set up a complimentary introductory appointment today!
Joe Vitale is president and independent advisor representative at American Retirement Advisors, Inc. With over 30 years of experience in the financial industry, Joe specializes in wealth preservation and distribution, helping his clients protect their hard-earned money from market downturns and the cost of long-term care. As a fiduciary, Joe cares deeply about putting his clients first and serving their best interests. Joe resides in Lapeer County, where he is involved with and supports numerous local and national charities. He enjoys spending time with his friends and family, including his 5 daughters and 2 grandchildren. In his spare time you can find him relaxing in the country with his family or trying to better his golf game, which needs some help! To learn more about Joe, connect with him on LinkedIn.