Most people avoid investing money because they think that it’s too much of a complicated process that they won’t be able to understand. However, as complex investing can be, there are simple strategies that you can use. Whether this is your first time investing or if you’ve been doing it for a while, there are simple habits that you can pick up.
In this guide, we will be going over our top recommended tips to invest money wisely in 2017, even if you don’t have a whole lot to invest in the first place.
Start investing Early
Among the most important factors that decide how wealthy you can get for investing is when you start. After all, as they say, the early bird gets the worm. Investing early can help you grow the amount of wealth you are accumulating. Even if you don’t have too much to invest, even a dollar can help compound your wealth, rather than nothing. So, instead of waiting for a work bonus or raise to start investing, start now. If you want to invest money wisely, you need to start as soon as you can.
Never Blindly Invest
Never invest in something you don’t understand or can’t pronounce. It’s easy to blindly invest, but doing so can cost you more money than you’d think. Plus, opting in for an investment that you understand can cost you your financial stability. Think of it like an unathletic person trying to run a marathon, it may seem impressive but you won’t come out unscathed.
Invest At Least 15 Percent of Your Income
Even starting to invest early won’t help you compound your wealth on its own. You should also consider investing at least 15 percent of your income each month as well. A smart way to do this is to have your money automatically taken out of your pay check and sent straight to your investment accounts. This will ensure that you are keeping on track with your investment schedule and not spending your money needlessly. Login to People’s United Bank, check your balance, and get investing today!
Pay for a Professional Consultant
Consulting a professional from a financial planner or advisor can help you make wiser investments. You should especially look for a professional that either charge you by the hour or a basic flat charge. If you hire a professional who instead asks for a percentage of your investments, it can put a serious dent in your wealth. When you hire a financial professional, you can make smarter money choices, while compounding your investments under safe hands.
Minimize Your Taxes
The more you manage, or minimize, the amount you pay in taxes, the more money you can work on compounding or investing. This is why it’s so important to take a look at your tax liability and figure out the perfect tax structure for you to follow. Learn the tax code and find loopholes you can take advantage of, whether it be a Roth IRA or a stepped-up basis loophole. Just make sure you are following all tax laws and you are not doing anything illegal.
Beware of Fees
If you are not careful, investment fees can quickly become unmanageable. These are the main three types of fees you should look out for.
Annual Fees: This fee is charged every year and can range from 0.2 percent to six percent of your total investment.
Transaction Fees: This is charged when you purchase or sell a share of your investment. Transaction fees are typically low.
Front End Loads: Often with mutual funds, you are required to pay a fee of at maximum, five to six percent of the total investment when you purchase shares.
Make sure you stay on top of these fees and find investments that charge the lowest fees.
Making smarter investment choices can help you compound your savings while becoming independently wealthy. If you follow our tips above to invest money wisely, we can guarantee that you can expect a large turnover for the money you are investing.