Investing can be a daunting proposition for many people. Individuals may be scared of investing because they may think that they might make the wrong decisions and end up losing money. People may also not be too informed about the tools they can use to properly invest their money. However, investing is important to student loan borrowers because it is critical to make any money you have, whether it be in an emergency fund or other savings, work for you. By keeping a few things in mind, getting more comfortable with investing is achievable over time.
One of the easiest ways that you can begin investing is through apps that make it simple to decide what types of investments you should pursue. One app that I am a fan of and use myself is Acorns. This is an investment application that permits you to place funds in five investment portfolios based on your risk preferences. You can decide to invest in a portfolio that is risky or one that is more conservative and the app will automatically deploy your money and you do not need to think about your investments too much.
I love Acorns when getting more comfortable with investing because it makes accessing information about my investments super easy, and the interface is very welcoming. Moreover, by breaking down investment decisions into simple questions about your risk preferences, Acorns takes much of the research and time away from investing. Of course, you could make more targeted investments and possibly earn more money, but the hands-off approach of Acorns should be lauded. If you sign up for Acorns using this link, I’ll receive an incentive that I can use to help keep the lights on here at Student Debt Diaries!
Another step you should take while getting more comfortable with investing is to open a brokerage account that allows you to make more targeted investment decisions. There are a number of financial institutions at which you can open a brokerage account, and it often makes sense to split up your money into multiple accounts so you do not know how much money you have at any given time. I recently opened up a Public account, and I really like the platform.
Public is an app that allows you to make investments in a seamless process, and the platform displays a lot of useful information about your investments. Moreover, Public seems to be more forward-thinking than other platforms that offer similar services. If you sign up for Public using this link, I’ll receive an incentive that I can use to help keep the lights on here at Student Debt Diaries!
Once you open a Public account as you start getting more comfortable with investing, you will need to decide where to place your investments. When I first started making decisions about investing, I mostly stuck to index funds. Index funds are an investment that tracks a market index, basically a type of asset class. Some index funds try and track stock indexes like the S&P 500 and others, so if this index increases in value, you will earn money. Other index funds track certain areas of the market like cybersecurity companies, technology stocks, and other areas.
While getting more comfortable with investing, I originally stuck to index funds that tracked the S&P 500. I knew that in the long run, I was basically guaranteed to earn money from such an investment. Also, I liked that I did not need to think of my investments so often. As I got a little more comfortable with investing, I started picking indexes that tracked areas of the market like cybersecurity, which I thought would be a growth area. I do not want to recommend specific index funds, but by using this type of investment, you can spread out your risk and you may be less likely to lose money.
Eventually, you may wish to make investments in individual stocks. I am not an expert at investing, so I do not want to suggest any stocks to select. However, while getting more comfortable with investing, there are a few strategies you can employ when deciding on individuals stocks to purchase.
For instance, I have a few friends and relatives who I can consistently rely on to provide advice for investments. Over the years, these individuals have given me great tips, and everyone can seek out people in their own lives who may provide such suggestions. In addition, I occasionally watch financial news and read financial news online to learn more about potential investments I can make.
More recently, I have really enjoyed the Pivot podcast. The podcast does not specifically discuss stocks and other investments you should purchase, but the podcast mentions financial information that may be useful when picking investments. Podcasts are a great way to process information in a variety of situations, and I can’t recommend Pivot enough.
All told, getting more comfortable with investing is an important part of student debt repayment and accomplishing other financial goals. Individuals can take “baby steps” with their investments, and they can start with investment vehicles that do not require too much financial literacy or input. As people get more experienced with investing, they can start selecting different investments and they can rely on a variety of sources when deciding which investments they should make.