Investing

Investing is something that a lot of twenty-somethings are scared of and there is absolutely no reason to be! Investing is great! It will help you earn a better return on your money, achieve your financial goals, and increase your net worth.

So, how much money should you start with? Honestly, you don’t need very much to start investing, $25 dollars will do the trick.

If you want to invest in something low-risk to start, a Guaranteed Investment Certificate (GIC) would be a good place to start. You can then work your way up to Exchange-Traded Funds (ETFs) and Mutual Funds, and then, the stock market.

After you have set aside the amount you want to initially invest you should continue putting money away each month solely for investing purposes. Some investments have a minimum amount you need to have before you can purchase; in cases like this you will need to save up before hand. Making your contributions automatic isn’t a bad idea either!

Once you’ve saved up enough to buy your first investment you must decide what exactly you will buy. A good thing to do is to identify what your investor profile is and what sort of risk tolerance you have. This will allow you to make an educated decision as to what you should buy. If the money you have invested is going to later be used for a down payment on a house, you may not want to pick something super risky. Likewise, if you don’t plan on pulling this money out until retirement you can probably deal with more risk.

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After you’ve bought your first few investments and are starting to get the hang of things you should focus on diversifying your portfolio. Look at different holdings within an ETF, mutual fund or stock in different industries. Diversifying will help weather the risk in your investment portfolio.

Continue to contribute to your investments no matter what your financial circumstance. Sometimes you will only be able to come up with $25 a month, but that’s okay as there will be months that you can contribute a lot more. By making investing a habit you won’t even notice that you are growing your nest egg.

Lastly, or well perhaps first, you should start to invest as early as you possibly can. By starting early you will not only weather your risk, but allow for long-term company growth and be able to reap the benefits of compound interest. It’s never to early to start investing, so stop procrastinating to your future-self and invest in your future today!