As we reach the midpoint of the year, let’s reflect briefly:
- January taught us how to set SMART financial goals.
- February walked us through creating and maintaining a budget.
- March focused on the importance of building an emergency fund.
- April helped us better understand credit and manage debt.
- May emphasized the power of saving and identifying savings goals.
Now, June is the perfect time to take the next step—begin investing.
Why Invest?
Saving protects your money. Investing grows it. With inflation averaging 2–3% annually, money left in a traditional savings account slowly loses purchasing power. Investing offers the opportunity to:
- Grow your money faster.
- Prepare for retirement.
- Build long-term wealth.
- Reach financial independence.
Types of Investments to Know
Before you begin, here are common options to explore:
- Stocks: Ownership in a company. Historically high returns but higher risk.
- Bonds: Loans to companies or the government. Lower returns, but lower risk.
- Mutual Funds/ETFs: Grouped investments that reduce risk through diversification.
- Real Estate: Income-generating property that builds equity over time.
- Retirement Accounts: 401(k), IRA, and Roth IRA accounts grow your money tax-advantaged.
Steps to Start Investing
1. Set Investment Goals
Ask yourself:
- Are you investing for retirement, a house, or future education?
- What is your timeline—short-term (1–3 years), mid-term (3–10 years), or long-term (10+ years)?
- What level of risk are you comfortable with?
2. Build an Emergency Fund First
Before investing, ensure your emergency fund (3–6 months of expenses) is intact. This prevents you from withdrawing investments during downturns.
3. Understand Risk vs. Reward
Higher returns usually mean higher risk. Don’t chase quick gains—focus on long-term growth. Use this principle:
- The younger you are, the more risk you can tolerate.
- As you approach retirement, shift to lower-risk options.
4. Choose the Right Platform
Start with beginner-friendly investment platforms:
- Fidelity (fidelity.com) – Excellent for retirement accounts.
- Charles Schwab (schwab.com) – Great education tools and no account minimums.
- Vanguard (investor.vanguard.com) – Best for low-cost index funds.
- Acorns (acorns.com) – Good for micro-investing and beginners.
- Robinhood (robinhood.com) – Easy-to-use interface, though be cautious with riskier investments.
5. Start Small and Be Consistent
You don’t need thousands to start. Begin with:
- $25–$100 monthly auto-investments.
- Dollar-cost averaging to reduce volatility risk.
- Investing in index funds or ETFs for diversification.
6. Keep Learning
Explore these free beginner-friendly investing resources:
- Investopedia: investopedia.com
- Morningstar Investing Classroom: morningstar.com/classroom
- Bogleheads Wiki: bogleheads.org/wiki
- U.S. Securities and Exchange Commission (SEC) Beginner’s Guide: investor.gov
How PVS Financial Coaching & Services Can Help
At PVS Financial Coaching & Services, we understand that investing can be intimidating—especially if you’re just starting out. That’s why we offer:
- Intro to Investing Workshops: Simplifying key investment terms and concepts.
- One-on-One Coaching: Help building personalized investment strategies.
- Goal-Based Financial Journals: Track your goals, contributions, and portfolio growth.
- Financial Literacy Books: Tailored to readers with little to no investment experience.
Our mission is to make investing accessible, empowering you to grow your wealth step by step.
Conclusion
Investing doesn’t require wealth—it builds it. Whether you’re starting with $10 or $1,000, taking action now can mean the difference between just getting by and thriving financially in the future. With the right knowledge and support, you can invest with confidence and purpose.
