So exactly how do we go about investing in our future? Read on for some great tips on investing your money and ways to get you to that vacation home!
There's no better time to start investing than right now. The younger you are when you start, the more money you're going to make. The rich don't get richer by working harder, they get richer by making their money make more money. Why is it so important to start young? If you invest while you're young, you have a better chance of reaching your goals thanks to compounding interest, which in short means you are earning interest on interest. So, the earlier you start, the more time your money has to gain interest and make money on that interest.
It doesn't make sense to start investing if you have credit cards with balances. Most credit cards have an interest rate of at least 15 percent, and in the market you're going to earn a maximum of 10-12 percent ROI (return on investment). Pay the credit cards first, save up an emergency fund, then invest. Remember, investing is long-term, so if there's a chance you're going to need this money sooner rather than later, it's best to keep it in a savings account to avoid paying penalties.
"Don't put all your eggs in one basket" is true for investing, too. It's best to spread your money out in case one of the sectors collapses. Of course, most of us don't have thousands of dollars lying around just waiting to be invested, so start with one (consider a mutual fund or Roth IRA) and go from there. Make a habit of putting a little something in your investment every month, even if it's just $10.
Saving and investing money is so important. Since pensions and social security may not exist when we, or our kids, retire, we have to look out for ourselves. Take the time to research investments and choose what makes the most sense for you and your family. Remember — it's never too early to start planning for your future.
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