Manuel M.
In order to invest you must first save money to have to invest.
In order to invest you must first save money to have to invest.
I would like to say that for savings you should put your money in a savings account that pays more than 10x the normal rate to see your savings grow.
Open a high yeild saving account.
You must have an emergency fund so if emergencies come up , you don't have to touch your savings.
I perfer spending
Save up first then when you get comfortable think about investing. If you are a complete novice I'd recommend finding an Index Fund you like (for example maybe something that caters to your beliefs or interests or the industry you work in) and put some money in there while also continuing to build up your personal savings.
It's important that you build up (and continue to add some) to your personal savings so that you don't wind up in a situation where you have to sell all your investments at a bad time and/or take penalties for withdrawing in an emergency. Investing should be considered a Long Term practice unless you know what you're doing or if you think you can afford to speculate and are able to handle (emotionally and monetarily) the losses.
I'd recommend Vanguard as they sell many different Index Funds that are good for Long Term investment. Most "Index funds" use complex mathematical and data formulas to keep Exposure (Finance term that means "risk") of your investments low. I recommend Vanguard because the fees are extremely low compared to the rest of industry and yet they still beat most of the (very expensive) fund managers in terms of market returns over the long term. It's almost too good to be true. Safe, boring, good returns are what you want if you want to invest in your future.
I believe many of these types of funds (like Vanguard) have a monthly auto invest option if you'd them to automatically deposit a monthly amount that you can handle. You can change this amount any time as your finances change. You can see your current value any time online and opt in for paper statements if you prefer those.
If you decide to make personal or short-term investments elsewhere, I wish you luck and also that you will scrutinize the deal carefully. Make sure you invest what you can afford to lose.
FIRST START WITH YOUR FOUNDATION WHICH IS SAVINGS, THEN CONTINUE TO BUILD WITH INVESTMENTS.
Learn about investing as you are saving. Then you will be ready once you have the 3 - 12 month cushion saved to slowly deploy into wealth building assets.
I have wondering the same thing. I have read some very helpful information so far thanks
I think it wise to do both save and invest.
As most have mentioned; you should have a savings.
The way I choose to think about the answer is:
Investing Is less flexible than savings and has no guarantee to be there when you need it. There are different tax rates based on how long one holds onto an investment [and potential penalties for investment vehicles such as IRAs, RothIRA, 401k and restrictions for 529 [special college fund accounts]]. However, the trade-off [gamble?] is historically investing has been able to LONG-TERM stay above inflation.
The way I look at investing is: I pretend I have "spent" the money I invest and it is no longer mine to access [until at least 3 years have passed.]
I am relatively new to investing, though. These are my opinions/thinking process and should not be considered as fact.