First 3 Steps to Start Investing
Mar 23, 2024Read time - 3 minutes / Disclaimer
Today let's review 3 steps to start investing.
Learning how to get started gives you:
• Direction.
• Confidence.
• A path forward.
Unfortunately, many put off getting started for several reasons.
Investing Is Confusing
Most people don't know:
• How to start.
• Where to start.
• What to invest in.
Fortunately, learning how to get started is a one time thing.
Then, consistency is key.
Here are 3 steps to start your investing journey:
Step 1: Get Your Full Retirement Match
Don't pass up free money.
Many people have a retirement account at work.
It's usually called a 401k.
Employers put money in this account on your behalf.
According to Fidelity Investments, 4.8% is the average amount they put in.
This means if you're making $70,000 per year—
The employer puts $3,360 into your retirement account each year on average.
That's 4.8% of your annual income.
$3,360 per year over 35 years is a lot of money.
The thing is—
You must set up your retirement account.
It's not done for you.
You could be passing up this free money.
Log in to your employee account at work.
Read about your retirement benefits.
Make sure you're getting all the money you're entitled to.
Step 2: Split Your Direct Deposit
Build wealth each time you're paid.
Most employers electronically deposit your full paycheck into your checking account.
A better way to do this is to split your direct deposit.
Instead of depositing all the money into your checking account.
Deposit most of it into your checking and part of it into your savings account.
Here's an example:
• 90% into checking
• 10% into savings
Most employers let you split your direct deposit.
But why do it?
To build up your savings account.
Later on you'll invest the saved money.
But first, you must start building this account up over time.
If $75 per paycheck is deposited into your savings account every two weeks.
You'd have $1,950 per year to invest.
Saving and investing smaller amounts over long periods of time add up.
Splitting your direct deposit will help you save and invest regularly.
One other tip—
It's best to have your savings account at a different bank than your checking account.
You'll be less tempted to transfer money from your savings to your checking on a whim.
Removing that temptation is a good idea for most people.
Step 3: Start Learning About Money
The more you learn about money, the more you tend to make.
The easiest way— make learning part of your day.
How?
Audiobooks.
Audible is a popular app you can download.
But, you must be willing to invest some money into your education.
Start learning for 30 minutes a day.
• While driving to work.
• While making dinner.
• While at the gym.
Pick an option that works best.
30 minutes a day is 182 hours per year.
Imagine how much you'd learn in 182 hours.
Here's a few great audiobooks to start with:
• Millionaire Next Door
by Thomas Stanley
• Rich Dad Poor Dad
by Robert Kiyosaki
• Simple Path to Wealth
by JL Collins
Investing can be intimidating.
But like anything in life, you figure it out.
One step at a time.
Keep building đź’°
See you next week.
