7 Easy ( And Safe) Tricks To Start Investing Your Money Wisely

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If you have even a small amount of money that you do not need immediately, you may want to invest it.  Many people simply put that money into a savings account.  It’s safe, and you can get it out when you want.  But the problem with putting all of your extra money into a savings account is that interest rates nowadays are very low.  Your money could be making you money in other places if you invest it wisely.  I’ve put together some ways to start investing your money in today’s article.

How To Start Investing Money

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To start investing money, there is one requirement.  That’s right, you guessed it.  Money.  You will need some money that you could do without for some time.  I recommend keeping some money in a savings account that you can get to at a moments notice.  You never know when you need to have some dental work that’s not covered by insurance, or if an unexpected expense comes up.

Saving Tips

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Before you start investing, you may want a couple of tips on how to save up enough money to start investing it.  Here are a couple of tips that you may want to look at as a prerequisite to investing your money.

  1.  Piggy Bank Approach – Start collecting that loose change and those spare dollars here and there.  Put it away in a jar or a traditional piggy bank.  Once you have a couple of hundred dollars saved, you are ready to start investing your money.
  2. Build Your Savings Account – Give yourself a test run, and see if you can set aside a certain amount of money in a savings account each month, without using it.  Once you can maintain and keep that money there for a few months, it’s a good time to start investing some of it.  Don’t drain your savings dry though.  It’s a good idea to keep some there in case you need it quickly.

CDs with High Yields

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If you can find a cd with high yield gains, then this is a good place to put some of your money.  Generally, the longer you can do without your money, the higher interest rate it will earn.  For example, five year CDs will pay out more than one year CDs.  Make sure that the CD you purchase pays more than your regular savings account.  A restriction of CDs is that there will be a penalty for early withdrawal.  So only put money in a CD that you are pretty certain you will not until the CD has matured.

401Ks and IRAs

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When planning for retirement, 401ks and Individual Retirement Accounts (IRAs) are two of the most popular places to put your money.  Both of these options are tax-favored accounts.  401ks are usually employer-sponsored.  Many companies will match what you put into it.  For example, if $50 comes out of your check every paycheck, then most employers will also put $50 into a 401k for you.

Most plans will offer options and target-date funds.  These are funds that are set up based on when a person plans to retire.  When your retirement date gets closer, the fund will automatically transition money to bonds and other smart investments.

Bonds

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Bonds are most often government or corporation issued.  They have a face value and then double that amount after many years.  I have bonds that have doubled their amounts, but it took approximately. 20 years for that to happen.  You also can get a bond that pays interest semi-annually.  Interests on bonds are taxable, but interest on municipal bonds is exempt from federal taxes.  Interests on treasury bonds are taxed at the federal level only.

Mutual Funds

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A mutual fund is an investment vehicle that is managed by an investment manager that allow investors to have their money placed in stocks, bonds, and other investment vehicles.  Mutual funds can track stock or bond market indexes.  Some mutual funds are actively managed.  This means that the manager selects the stocks, bonds, or other investments held by the fund.  For the most part, actively managed funds are costly to own.  Mutual funds allow small investors to buy diversified exposure to investment holdings instantly.

Investment Apps for Investing In the Stock Market

investing apps

It can be intimidating to start investing in the stock market.  But nowadays it is easy to start investing your money in stocks by using investing apps.  A decade ago, if you wanted to invest in the stock market, unless you were a stock expert yourself, you would have had to call a broker.  Brokers can charge very large fees for their services.  Now novices can start trading and working the stock market with the help of investing apps.  All you need is a bank account and a cell phone with Wi-Fi to get started.

Investment apps are a great tool that can be used to help you play the market wisely.  The technology is simple to understand, yet the features are detailed enough to help you make good and precise decisions.  These apps can aid you in buying stocks, comparing fees, offering investing suggestions, and analyzing funds.

Summary

You do not have to be a financial expert or stock broker to start investing your money wisely.  While savings accounts are safe places to put money, they don’t pay much interest.  In this article, I’ve covered some other places to put your money that will help to increase your profits.  I’ve covered savings tips, CDs, 401ks, IRAs, bonds, mutual funds, and investing apps.  Once, you set aside an amount that you can do without in the short term; I encourage you to get started today.  Let your money work for you.  If you invest wisely, you will reap the rewards down the road.  I hope that this article helped to not only inform you of your options but also to motivate you to start investing your money.

 For more information, check out our article on the Top 10 Best Investing Apps of 2018. 

 

 

 

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Mariann Foster is one of our content writers here at OurStart. Mariann is a certified reading specialist who enjoys homeschooling her daughter and taking care of her alpacas in her spare time. She lives in Wyoming on an alpaca farm with her daughter and their various collection of big and small animals. Being a mother is her greatest gift, so she hopes she can help to encourage other moms through her writing.

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