When Should You Start Investing?
Investing can be a great way to build wealth over time, but when is the right time to start?
In a perfect world, ‘now’ would be the easy answer, but it’s not that simple. Buying securities such as mutual funds, exchange traded funds, bonds and stocks generally tends to be a long-term commitment.
Before starting, you should take a look at the short term, and whether or not your current income and savings are adequate to meet your needs.
You need to ask yourself some questions: - Are you making enough money to comfortably cover current expenses? - Are you in debt? - Do you have money in some sort of savings account to cover an emergency?
Once you feel like the coast is clear to begin investing, you’ll want to think about your options. If you have the opportunity, a great way to start would be through your employer’s 401(k) plan. Other retirement investment opportunities include traditional and Roth IRAs.
Be aware that for some retirement options, there are annual contribution limits and early withdrawal penalties.
You have other investment opportunities to consider too, such as those through investment companies; online brokerage accounts; and robo-advisors.
Keep in mind that these services don’t come for free, and that investing does come with risks.
Once you decide the time is right to begin investing, take the time to research your options. There is a wealth of advice online and you can always look for a trusted financial advisor who can help guide you on your investing journey.