If you’re a beginner and looking to invest your money, there are several easy ways to get started. If you’re thinking of investing, start now. Because the earlier you start investing, the more time you have to benefit from the power of compounding. Compounding refers to earning returns on both the principal amount and the accumulated interest or gains from previous periods.
For example, if you invest $1,000 today with an annual return of 8%, after one year, you would have $1,080. In the second year, you would earn an 8% return on $1,080, resulting in $1,166.40, and so on. Over time, this compounding effect can lead to significant growth in your investments.
Additionally, starting early allows you to take on more risk, as you have more time to ride out the ups and downs of the stock market. This can result in higher returns over the long-term.
Furthermore, investing early can help you reach your financial goals, such as saving for retirement, buying a home, or starting a business. The earlier you start, the more time you have to accumulate wealth and achieve your goals.
Easy Ways To Invest Now
Exchange-traded funds (ETFs)
ETFs are basket of securities that trade on an exchange like a stock. You can buy ETFs that track a variety of markets, such as the S&P 500 or the tech sector, or that invest in a specific geographic region or industry.Investing in exchange-traded funds (ETFs) is a simple and cost-effective way to diversify your investment portfolio.
Here’s how to get started:
Choose a brokerage firm- You’ll need to open an account with a brokerage firm to invest in ETFs. Some popular options include Fidelity, TD Ameritrade, and E-Trade. Make sure to compare the fees and services offered by each firm before you choose one.
Research ETFs- There are thousands of ETFs available, each with a different investment objective and strategy. Research ETFs that align with your investment goals and risk tolerance. You can also look for ETFs that track a specific market, such as the S&P 500 or the tech sector, or that invest in a specific geographic region or industry.
Decide how much to invest- Consider how much you can afford to invest and how much you want to allocate to ETFs. Keep in mind that investing in ETFs involves risk and your investments can lose value.
Place an order- Once you’ve selected an ETF, you can place an order to buy shares through your brokerage account. There are two main types of orders, market orders and limit orders. A market order will be executed at the current market price, while a limit order allows you to specify a maximum price you’re willing to pay.
Monitor your investment- Once you’ve invested in an ETF, it’s important to monitor its performance and make adjustments as needed. Consider rebalancing your portfolio regularly to ensure that you’re still aligned with your investment goals.
Robo-advisors
Robo-advisors are digital platforms that use algorithms to automatically manage your investments. You simply deposit money into your account, and the robo-advisor will invest it for you based on your goals and risk tolerance.
There are many robo-advisors available, and the “top” robo-advisors can vary depending on factors such as fees, investment options, and customer service.
Here are some popular robo-advisors and why they are well-regarded:
- Betterment– Betterment is a popular robo-advisor that offers low fees, automatic rebalancing, and tax-loss harvesting. They also provide access to financial advisors for an additional fee.
- Wealthfront– Wealthfront is known for its low fees and comprehensive financial planning tools. It also offers a wide range of investment options, including ETFs and individual stocks.
- Charles Schwab Intelligent Portfolios– Charles Schwab’s robo-advisor offers commission-free trades and no account minimums. It also provides access to live financial advisors for an additional fee.
- Vanguard Personal Advisor Services– Vanguard is a well-respected investment firm, and its robo-advisor offers low fees and a focus on low-cost index funds. Access to financial advisors is available.
- Fidelity Go– Fidelity’s robo-advisor is known for its low fees and personalized investment strategies. They also provide access to financial advisors for an additional fee.
These are just a few of the top robo-advisors, and the best option for you may depend on your individual financial situation and investment goals. It’s always a good idea to compare several robo-advisors and read their disclosures, terms, and conditions before making a decision.
High-yield savings accounts
If you’re looking for a low-risk investment option, consider a high-yield savings account. These accounts offer a higher interest rate than traditional savings accounts and are FDIC insured up to $250,000, so your money is safe.
High-yield savings accounts are savings accounts that offer a higher interest rate than traditional savings accounts.
Here are some of the best high-yield savings accounts:
- Ally Bank Online Savings Account: Ally Bank offers one of the highest interest rates among online savings accounts, and it also offers 24/7 customer support and easy access to your funds.
- Marcus by Goldman Sachs High Yield Online Savings Account: Marcus by Goldman Sachs offers competitive interest rates and no monthly fees or minimum balance requirements.
- Capital One 360 Performance Savings: Capital One 360 Performance Savings offers a high interest rate and no monthly fees or minimum balance requirements. It also offers easy access to your funds through a network of Capital One ATMs.
- Discover Online Savings Account: Discover offers a competitive interest rate and no monthly fees or minimum balance requirements. It also offers 24/7 customer support and a mobile app to manage your account.
- CIT Bank Premier High Yield Savings Account: CIT Bank offers a high interest rate and a variety of account options, including joint accounts and custodial accounts.
These are just a few of the best high-yield savings accounts. It’s always a good idea to compare several options and read the disclosures, terms, and conditions before choosing a savings account. Additionally, it’s important to regularly monitor your account to ensure you’re still getting the best interest rate available.
Easy Ways To Invest WIth Real Estate Investment Trusts (REITs)
Real estate investment trusts (REITs) can be a relatively safe investment option. REITs are companies that own, operate, or finance income-producing real estate properties. They allow individual investors to invest in a diversified portfolio of real estate assets and earn income from the rent generated by those properties.
One advantage of REITs is that they are required to distribute at least 90% of their taxable income to shareholders in the form of dividends, which can provide a steady stream of income for investors. Additionally, they may offer liquidity, as they are traded on major stock exchanges.
Real Estate Investment Trusts can be a good investment, but like any investment, they also come with risks and uncertainties.
Here are some of the pros and cons of investing in REITs:
Pros:
Diversification– REITs can provide diversification to your investment portfolio, as they give you exposure to the real estate market, which may have a low correlation with other asset classes like stocks and bonds.
Income– REITs are required by law to distribute at least 90% of their taxable income to shareholders in the form of dividends, making them a good option for investors looking for steady income.
Professional Management– REITs are managed by professional real estate managers, who are responsible for acquiring, developing, and managing properties. This can help to reduce the risk associated with investing in real estate.
Cons:
Market Risk– REITs, like any publicly traded security, are subject to market risk and can experience fluctuations in price.
Interest Rate Risk– REITs are sensitive to changes in interest rates, and rising rates can result in a decrease in the value of REITs.
Management Risk– The success of a REIT depends largely on the skill and experience of its management team. Poor management can result in lower returns for investors.
Liquidity– REITs are traded on stock exchanges, but their liquidity can be lower than other publicly traded securities. This means that it may be more difficult to sell your shares quickly if you need to.
Investing in Real Estate Investment Trusts (REITs) is relatively easy and can be done through several methods:
- One of the easiest ways to invest in REITs is to purchase shares of a REIT through a brokerage account. Many online brokerages offer the ability to buy and sell REITs just like you would buy and sell stocks.
- Another option is to invest in a REIT Exchange Traded Fund, which provides exposure to a diversified portfolio of REITs. REIT ETFs trade just like stocks and can be purchased through a brokerage account.
- Participate in a REIT mutual fund. REIT mutual funds invest in a portfolio of REITs and provide exposure to the real estate market. REIT mutual funds can be purchased through a brokerage account or directly from the fund company.
Regardless of the method you choose, it’s important to carefully research the REITs you’re interested in and to consider your investment goals, risk tolerance, and overall financial situation before making any investment decisions.
Conclusion
Regardless of which option you choose, it’s important to do your own research and understand the risks involved with investing. It’s also a good idea to schedule a meeting to consult with a financial advisor if you have questions or are unsure about the best investment strategy for your specific needs.
