Learn about investing
Learning how to invest your money is a wonderful way for you to take control of your financial future.
Keep your goals in mind:
- Be sure to write down your goals and always keep those in mind as you invest.
- Goals may include supplementing your retirement income, saving for a house, or starting your own business.
- What your goals are and the time frame you have for achieving them will guide your investment strategy.
Understand your risk tolerance:
Knowing which type of investment is right for you requires you to think about how much of a chance you are able and willing to take with your money (your "risk tolerance") and weighing that against your potential for return.
Diversify your investments:
Make sure that your investments are diversified, which means that they are in many different areas, so that if any one investment is doing poorly, your entire portfolio of investments doesn't suffer.
Know your options:
- Savings account – A savings account has very low risk, but you typically earn less money (a lower interest rate).
- Bonds – Bonds are another low-risk, smaller-reward choice. You loan money to a government or company, who issues you a bond promising to repay you at a fixed rate of interest on a specific date.
- Stocks – By purchasing stock in a company, you are actually buying part ownership of that company. You purchase the stock at the market price for that day. You can contact a financial advisor for additional information about investing in the stock market.
- Mutual funds – A great way to achieve diversification is to purchase mutual funds. A mutual fund invests in many different areas and is handled by a professional fund manager. As an investor, you purchase shares in a mutual fund like you would with stocks.
Going to a financial planner can be a good way to find out information about investing for your future. Some banks offer free financial planning for a minimum investment.