Investing is actually quite simple. If you’re looking for easy ways to get started here are some simple ideas.
# 1 – Set it and Forget with Index Funds
Index funds are a group of assets that mimic a particular index. For example the S&P 500 would contain all of the stocks in that particular index. However, instead of purchasing all of the stocks separately which would be a total pain and quit expensive, an index fund allows you to buy partial shares.
In fact you can start investing in index funds with as little as $10 at a place like Betterment.
Depending on the broker you choose to sign up with you can have money automatically withdrawn from your checking and invested for you each month – you won’t even have to lift a finger.
# 2 – Invest in Your Employer Retirement Plan
If you just landed your first “real” job one of the first things you should do is sign up for your employer sponsored retirement plan. You should be able to meet with someone from H&R to get signed up and go over the investment options for your 401k.
Find out if your employer offers a match. If so try to make big enough monthly contributions to receive that match.
# 3 – Use CD’s for a Guaranteed Rate of Return
If you’re feeling pretty risk averse and can’t stomach the idea of putting money in the stock market one low risk way to invest is in certificates of deposit, also known as CDs.
When you invest in a CD you’re essentially promising the bank that you’ll leave a certain amount of money in the account for a certain amount of time. In exchange for your promise you receive a set interest rate on your money.
Right now interest rates on CDs are very low but still higher than those on savings accounts.
Do be aware that you could face penalties if you pull money out of your CD early. You can get a CD at your local bank but it’s best to check around and find the best rate.
If You’re On the Fence…………
If you can’t decide what to do with your money another option you have is to just keep saving until you can make a concrete decision. If you want to make your money work for you you’ll need to invest in some capacity but you shouldn’t rush into a decision if you’re feeling unsure.
Research your options and if nothing is appealing to you at the moment keep saving until you find that perfect investment opportunity.