The article is written to share with an adult child or younger friend needing inspiration to start investing
Remember when you were in college and assigned a term paper? Staring at a blank age and writing the first sentence is the most difficult part of the project. While we eventually completed the assignment, procrastination increased our stress level until we got started.
Getting started with saving and investing is similar. You know it’s something you need to do, yet you hesitate. The first step is the toughest, but once you begin, you’ll be well on your way and a weight will be lifted from you shoulders.
Set a goal
Before you begin saving, come up with a goal, which is our ‘why’ or reason to save. Why sock money away, when you could enjoy it today?
If you are saving just to save, it’s easy to get knocked off track. Years ago, we had a friend who saved $300 per month in what he called his “go to hell” fund. There’s nothing like having a cushion to fall back on just in case.
Others may want to save for a down payment on a home, retirement, kids’ college education or something else. Goals are personal, but they keep you focused on the end result. If you have a goal, you’re more likely to keep at it when hurdles arise.
Understand why you are doing without today so you can achieve something better tomorrow. If not, it’s too easy to get sidetracked.
Be a student, get educated, and act
Know what’s required to become a successful investor. There are several reputable sources available. Or simply reach out to us and we would be happy to make an outline available to you.
Dig into the basics. You probably understand what a savings account is, but what is a stock, a bond, a mutual fund, and an ETF (exchange-traded fund)? These securities will make up much of your savings plan.
Design a plan and implement the plan. This takes effort. But at this point, you’ve moved well beyond square one.
Be leery of get-rich-quick schemes or loading up on unknown companies promising riches. For every Amazon or Apple, there are thousands of companies failing to get out of the starting gate, leaving investors holding worthless paper.
Understand the importance of diversification. Investing comes with risk, but risk can be managed. You don’t want all your eggs in one basket.
Recognize day-to-day volatility is inescapable but running to cash when uncertainty arises comes with a trade-off: your longer-term goals.
If you veer from your investment plan, you put your goals at risk by accepting diminished returns over a longer period.
Realize a well-crafted investment plan tailored to your goals incorporates the inevitable pullbacks in the market.
If you have additional questions, we’d be happy to get you pointed in the right direction. Just ask. That’s what we’re here for. Wood Tarver 208-343-2001. Eric.firstname.lastname@example.org