Updated: Mar 1, 2021
Most financial professionals agree that the best time to start investing is right now. Regardless of your age or income, Coast to Coast Finance is here to help you get started today. Read on for an easy to follow, 5-step process to begin your path towards financial freedom.
1. Decide how much you want to invest
Now that you’ve made the decision to begin investing, it’s important to understand that there are certain risks involved with investing your money. You shouldn’t invest any money that you aren’t willing to lose. However, with greater risks come greater potential for rewards when compared to keeping your money in a traditional savings account. Take a close look at your income, all of your living expenses, your savings goals, and your discretionary spending before writing down the dollar amount that you want to invest in the stock market.
2. Talk to a finance professional
Investing for the first time can be confusing and sometimes scary, but it doesn’t have to be. It’s important to know that you don’t have to do everything on your own. Talk to your friends and family, and ask them who they use as a financial advisor. If nobody you know can refer you to a financial advisor, reach out to email@example.com, and we will help guide you to resources available in your area. Speaking to a financial advisor or a Certified Financial Planner (CFP) is maybe the most important step you can take to avoid making costly mistakes with your money.
3. Open a brokerage account
Assuming you aren’t a stock broker, you will need a brokerage account to purchase stocks. The brokerage account will receive your cash transfers from your bank and buy stocks on your behalf. Today there are hundreds of brokerages to choose from with pros and cons to each. Your financial advisor can help to point you towards the one that best suits your needs. Here’s a short-list of brokerages you might want to look into:
TD Ameritrade: Good for beginners, one of the largest brokerages
Fidelity: Wide product offering, earn interest on uninvested cash
Charles Schwab: Full-service investment firm, good for ETFs (Exchange Traded Funds)
Robinhood: Popular with millennials, easy to use mobile app
4. Do your research
Your financial advisor will be able to recommend a diversified portfolio for you, but you might have certain companies you want to invest in. Maybe you like Starbuck’s coffee (SBUX), or maybe you believe Tesla (TSLA) is the future of the automobile industry. Do your research on the companies you want to invest in. Are they well managed? Are they ethical? Are they making a profit? Remember, you are investing in the future of the company. As you may have heard: past performance does not guarantee future results.
5. Be patient, make your trades, and keep moving forward!
Investing is a journey, not a one-time event. Take your time, follow the steps listed here, and when you are ready, buy that stock you have been wanting! Over time you will see your portfolio grow. Even if the price goes down, don’t get discouraged. Keep at it, keep investing, and keep learning everything you can.
We’d love to hear about your investing journey! Reach out using the contact box below or email firstname.lastname@example.org. You can also reach us on Facebook, Twitter, or Instagram @C2CFinance. Happy trading!
Coast to Coast Finance may earn a commission from purchases you make through affiliate links. Coast to Coast Finance does not own a position in any of the stocks mentioned in this article.