Want to Start Investing? 4 Simple Tips to Get You Started
Have you ever wanted to include investing as part of your financial plan, but you’ve never been sure how to get started or what you need to know? If you’ve never invested before, it’s common to have a lot of questions about the process and what your different options are. You may even be wondering if it’s the right option for you. If you want to start investing, here are 4 simple tips to get you started.
- The first tip to get you started concerns what type of investment accounts there are. In Australia, there are 4 main types of investment structures: Individual, Partnership, Companies and Trusts. For many first time investors, individual accounts are chosen as they provide a lot of flexibility and you can open an account in your own name. With individual accounts, there tends to be less paperwork and any gains or losses are included on your tax returns.
- Before you decide to open an investment account, one good rule to live by is to plan on keeping your money in the account for a period of 5 years or longer. When investing, think of the process as a long term one, not a short term one. Oftentimes, individuals use investments as a way to try and earn a quick return only to see the market not cooperate. It’s always important to remember that capital gains are never guaranteed and you may lose money by investing.
- You don’t need to hire a person to do the investing for you. While you still need to use a 3rd party broker to conduct transactions, many brokers have online software programs that allow you to do all of your buying and selling electronically. While there are still fees for these services, they are much more cost-effective in many cases than hiring a person to do the transacting for you.
- What many people don’t realise is that it doesn’t take a fortune to get started with investing. Many online brokers require an average of $600 as the minimum investment. Some are a little lower, while others are higher so it’s important to shop around so that you can find the best solution for you. If you do not have the minimum required to start investing, you can factor the cost into your budget and then start saving a specific amount of money every month until you reach your goals.
Investments are one of several options that people have when planning out their financial future. It may or may not be right for your circumstances, but now you are aware of some of the important details that you need to know before you decide if it’s right for you.