It is a huge
mistake many people make that investing and money building is something that
only rich people do. You do not have to be wealthy at all to make investments.
There are so many options available that it's possible for anybody to learn how
to invest money wisely. It all starts out with a small amount of extra money.
You do not have to play the stock market or even buy into any company. You can
simply start a CD account, money market account, or even savings account at a
bank.
Let that be the #1
tip on smart investing: start doing it as soon as you start having extra money
that you can spare. The younger you are, the longer you can wait for the money
to wait for the interest to build. If you're investing in stocks, the more time
you have to wait for the market to move in a direction that is favourable to
you.
Another smart,
essential thing to do is to build savings for emergencies and short-term goals.
Choose an online bank that offers a high APY and create either a savings
builder account or buy a CD for 6 months - 2 years. Why keep cash hidden around
your house for emergencies when you can keep it in an account that will
accumulate some interest. Even if it's only $500, you'll still end up with more
money than when you started.
How to Invest Money
Wisely Away from Banks
If you do decide to
go with the CD option, just make sure you keep the money in there for time
agreed upon so that you won't get charged a penalty fee for an early
withdrawal. If there is an emergency, most banks will allow you to write a
certain number of checks per month (usually around 6) or make online payments
(up to 6).
Are you interested
in how to invest money wisely when it comes to stocks? It depends on age - you
must base those investments based on your horizon, and your horizon is the
amount of time you need to keep your portfolio before you start spending it. A
general rule of thumb is to subtract your current age from 100, and then use
that number as the percentage of stocks to own in your retirement portfolio. If
you are 35, then your investment portfolio should have around 65% stocks.
Of course, stocks are
not for everybody. There are other investment options, such as real estate and
foreign currency trading. To really learn more about how to invest money
wisely, it is good to have the right tools and resources at your disposal.
Motley Fool is a leader in investment picks and education. Sign up today to get
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Article by George
by Botwin
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