Let’s be honest. Everyone wants to put enough money aside so that they can one day retire comfortably. However, many young people today hate the thought of investing or even putting money aside for their future. This is a horrible idea. If you fear investing, you probably have a lack of understanding of what you are investing in. In this article, I’m going to be breaking down three simple things that you must do when investing.
- Set goals
You have to set both long-term and short-term goals when it comes to investing. Many people think investing is just 401ks and IRAs which is not the case at all. You need to make a monthly plan that states how much you are going to invest that month, what you are going to invest in, and how you are going to invest it. All in all, you should have a good understanding of these investments. You should invest in what you know, never invest in someones else’s opinion, and always have a detailed plan when it comes to investing. This will set you up for both long-term and short-term success.
- Short-term investing
A couple short-term investments would be reinvesting money back into your business, swing trading, or maybe even day trading. These activities provide cash flow relatively quick which you can then reinvest into long-term assets such as real estate and mutual funds. In general, these short-term investments will be high risk/high reward so it’s a good idea to have a full understanding of them.
- Long-term investing
Long-term investing is what will probably make or break your retirement. Two of my favorite financial vehicles for long-term investing include 401ks and Roth IRAs. With Roth IRAs, your investment grows tax-free for years and years, allowing your wealth to compound over time. With 401ks, your company will typically match your investment. These are great options for the passive investor looking to keep risk at a low while still growing their portfolio. Good growth stock mutual funds are also a great place to put your money as well as in a real estate investment trust.