The following is a guest blog post:
People know that they have to save and invest their money in order to have a retirement fund. And since most people do not plan to work for their entire lives, investing and retirement planning has to be done relatively early on in life. On the other hand, paying regular everyday expenses can be ridiculously tough. There are scholarships available at Maryville University if you do well in an accounting degree online program, but what happens after graduation? You can set up a 401K with your job, but will you have enough left in take-home pay to invest funds independently? Here’s how you can tell when you are able to begin investing steadily and safely.
You Aren’t In Severe Debt
Whether you fail to curb your spending, use credit cards to make all of your purchases, or simply got in over your head financially, people who are in debt really don’t need to look at investment accounts. Sure, you could start speculating on the rising price of Bitcoin and make a lot of money fast, but if your financial priorities aren’t in order, you’ll end up doing the same thing again. Get out of severe debt before you try to invest actively.
Small Investments Are the Way to Go
Invest the same amount of money a month over the course of a year and you will have a healthy portfolio. Some folks get investing all wrong when they decide to use large chunks of cash to float their portfolios. Figure out how much you can spare each month and have that same amount automatically deducted and added to your stock market or investment account. You can always decide what to do with the money later, but once it’s been allocated for investments, you will make better decisions.
You’ve Met Other Life Goals
Do you own a home? Is your car dependable and almost fully paid off? Do you have an online bachelors degree in accounting and are your student loans under control? If you have barely enough food to get through the week and you’ve got to actively check your bank account to see how much gas you can put in your car, you aren’t in a position where you can start investing yet. Remember that the safest and smartest way to invest entails diversifying your portfolio and making steady deposits. You can’t do that if you are struggling to just get through from month to month.
Those who start investing and saving for retirement while they’re still in their 20’s can put up around 5% of their salaries and live well in their golden years. For people who wait until their 30’s to start investing, it’s around 10 to 15%. After 40 years of age, you’re looking at putting up around 20% of your take-home pay into an investment account if you want to retire with a nice nest egg. Think about those numbers the next time that you go out to eat or buy something you don’t need, and ask yourself if you have your priorities straight.