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First of all, know this, you don’t need a finance or business degree to invest successfully. All you need is patience, a little extra money and a basic understanding of where to put that money.
Many people avoid investing because it seems overwhelming and complicated, especially if they’re scared of losing money -and it’s true that investing comes with an inherent risk. But that risk is essential to building a strong portfolio. Obviously there are no guarantees, but more risk gives you have the potential to earn more return. When you leverage investing principles such as diversification and rebalancing it minimizes the overall risk of any portfolio.
When you put money in a bank’s savings account, it is insured by the federal government. You can’t lose anything because the funds are guaranteed, but you also won’t be able to earn more than 1-2% interest a year.
You can either invest for the short-term or the long-term, and that choice will affect what kind of investment account to open and what securities to buy. Usually it is wise to only invest your money for long term goals, i.e. anything 5 years or longer.
Here are two basic account types you may consider to open, brokerage accounts and retirement accounts. A brokerage account lets you access the money at any time while retirement accounts only allow you to withdrawal after age 59 1/2 without any penalties. A brokerage account has no rules on when you can withdraw funds. If you invest $100 in a brokerage account and you need to withdraw it next month, you can do that. You may have to pay taxes on any earnings, but there will be no extra withdrawal fee. But for a retirement account like an Individual Retirement Account (IRA) may be a good option if you want to save money for the long haul. These accounts have special tax benefits to reward saving for a long period of time.
Additionally, you can as well set up short-term investments in verified businesses that takes care of some of your expenses and commitments alongside the long-term investments like the IRA, Real Estates, Gold, Shares, Stocks e.t.c.
However, It is wise to always conduct your own due diligence about any investment opportunity of your choice and also seek for professional advice where needed from financial advisors or from seasoned investors with proven results before committing your money.
