Investing In Your 20’s: 10 Tips

While investing at any age is a great way to help one get ahead, investing in your 20's is often uncommon territory. You can never start too early when it comes to saving and/or making money for your future. 

  1. Consider your budget: It is important before any investment planning to consider your budget.  Can you afford to invest at all?  How much are you able to save from each pay check?  How much debt do you have?  This is to include car payments, medical bills, student loans, and anything else you are currently paying monthly.  Before any steps are taken toward investment, it is important to know how much you are actually going to be able to work with.
  2. Who do you know that currently invests?:  Perhaps your parents are active investors, or you have friends from college that have spoken of their investment ordeals.  Neighbors, coworkers, even social networking friends can all be good sources of first-hand information before you take the plunge into investing yourself.
  3. Know what type of investing you want to try: If your only concept of investments is the stock market, you should do some homework before going any further. There are a variety of investment opportunities out there, all with varying fees, risks, and turnover.  If you are unsure of where to find this information, a trip to the library, an internet search, or a call to your bank's investment department can help provide some information.
  4. Consider your bank and the type of banking you have done until now: If your bank has an investment department, this might be the best place to start.  You can meet with a financial advisor or investment counselor, have your questions answered, and have potential plans proposed.  This is also good because you have a previously developed relationship with the bank.
  5. Pay attention: Before you begin any investment plans, it is a good idea, after selecting the types of investments you are interested in, to start watching those investments for growth.  See if they have a tendency to continually earn money or if the risks seem to great before giving your money to them.
  6. Learn what the numbers mean: There are a lot of banks and advisors out there that are quick to give half-information and keep investors in the dark.  This is not meant to scare anyone, but it should be seen as a sign to learn as much as you can before handing out your cash.  If you can't read the stock market pages or watch the market information on the television, perhaps it's time for a book or internet search.
  7. Investing on your own: Many investors are now using online trading tools such as e*Trade, Ameritrade, and the like.  This has pros and cons.  If you are completely unfamiliar with investing at all, it is always best to get information and seek help from a professional financial advisor first.  However, if you feel brave and want to try a website, they do offer tutorials and internet-based tools to assist in learning and investing.
  8. Know the risks: Stocks are risky, and they require monitoring on a daily basis.  Skipping a day or two can mean the loss of major income or opportunity.  Mutual Funds provide slightly less risk, but also slightly less earning potential, and Corporate Bonds provide promises of high earning potential but coupled with high risk.  Knowing the difference, and knowing what you can afford can help.
  9. Prepare in advance: Before visiting a bank, financial advisor, or any other type of investment professional, prepare in advance.  Know the information you need to ask to make good decisions.  Type up the questions and bring it with you. 
  10. Investing vs. Saving: If you are currently living check-to-check and unable to save, it is probably in your best interest to hold of on investing.  The idea of easy money seems attractive, but it's more important to set yourself up for success.  Keep working, get better with your budget, and learn all you can before moving on to investing.
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