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If your goal for the new year is to start investing for your future but you’re not sure where to exactly start, you’re at the right place. Investing doesn’t have to be confusing or complicated. In fact, investing in your future is one of the best long-term moves you can make, especially if you’re a few decades from retirement.
While investing itself is simple once you get set up, it’s not always easy to know where to start. The amount of available investing information can be staggering, and you might easily find yourself sifting through ill-advised stock picks, unsolicited advice from family members, and market news that’s always full of drama.
Getting started early and investing often is the secret to a healthy retirement account. Plus, the power of compound interest — which can add a huge boost with a long investment horizon — can make your money work for you so it grows even as you sleep.
“You have to cut through the headlines,” advises Jill Fopiano, president & CEO at O’Brien Wealth Partners. “It’s easy to find conflicting articles about the same exact investments.”
Not sure where to get started? We’re here to clear that up for you. The best investment strategies are often the simplest. Let’s take a look at a few popular investment options for beginners.
Beginner Investing Strategy Overview
Before you start investing, it’s important to nail down a few things.
First, consider your budget and emergency savings. Experts recommend that you have about six months worth of expenses in a savings account put aside before you invest seriously in the market. However, if you have an employer-sponsored 401(k), it’s not a bad idea to at least begin contributing to it while building your emergency fund. That way you can still benefit from employer contribution matching. But get your emergency fund moving.
In most cases, it’s advisable to pay off high-interest debt before you start investing. Those with student loans or mortgages below 5% APR may want to chip away at their debt slowly while also investing in the stock market. However, personal loans and credit card balances with 10% APR or more should really be taken care of first, as any market gains will likely just be overshadowed by the interest on that debt.
After you have enough set aside in …….