How to Invest Money: A Beginner’s Guide

Investing is necessary to hit nearly every financial goal imaginable, including retirement. 

1. Set Your Financial Goals

The first step you need to take before investing your money is setting some basic financial goals. This is typically the first step in every financial planning process out there.

Retirement Goal 

For nearly everyone, that should include a retirement goal. You should set a rough plan for what age you want to retire and how much money you wish to retire. 

Other Goals 

Retirement isn’t the only financial goal you should consider. Other goals to consider before investing are: 

– Paying off debt – Building an emergency fund – Saving for a vacation – Saving for a car – Preparing to buy a house – Saving for a child’s education – Building wealth

Once your goals are set and you have a clear idea of how much you want to invest, it’s time to decide how involved you want to be in the investing process. 

2. Determine Your Involvement Level

Option 1: Active Investor Active investing requires the most work and also comes with the most amount of risk. Option 2: Passive Investor A passive investor chooses to invest in broad index funds or exchange-traded funds (ETFs) that mirror an established  index. Option 3: Robo-Advisor Investor Robo-advisors take passive investing to the next level and are good options for beginners who want to take a more hands-off approach.

Generally speaking, you have three options: 

Once you’ve decided on your investment style, it’s time to choose how you want to invest. In general, you have a few different asset classes to choose from, which include: – Stocks or equity – Bond – Real estate – Commodities (like gold)

3. Pick an Asset Class and Investment Vehicle

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