This article first appeared in the inaugural issue of Modern Military Magazine.
If you’re fairly new to investing, you might be wondering what sort of rules you should follow or moves you should make. And while everyone’s situation is different, there are indeed guidelines that make sense for all investors. Here are some to consider:
- Learn the basics. The investment world can seem confusing, but the more you know about the basic components, the more confident you’ll be when you begin to invest. For starters, you’ll want to be familiar with the essential types of investments: stocks, bonds, mutual funds, government securities and so on. And it’s also important to know that some investments are designed to provide growth – an increase in the investment’s value – while others provide income in the form of dividends or interest payments, and still others may offer growth and income.
- Set your goals. You need to know why you’re investing – and that means you must clearly define your goals. Do you want to retire early? When you do retire, what kind of lifestyle would you like to have? Are you planning on helping your children (or grandchildren) pay for college? Once you’ve established your goals, you can create the appropriate investment strategy for achieving them, taking into account your time horizon and risk tolerance.
- Invest regularly. At first, you may only be able to afford to put in small amounts to your investment accounts, but even so, try to contribute regularly. You’ll get into the habit of investing and, later on, when you earn more money, you can ramp up your contributions. If you have a 401(k) or similar plan at work, the money can come out of your paycheck before you even see it.
- Continue reading on page 12 of the January 2020 issue of Modern Military Magazine.