Investing. How to do it? How to start? Should I start?
The truth is that younger generations lack the knowledge to take on the task. And that’s not the only thing that keeps Millennials skeptical of investing. According to a survey commissioned by the CFA Institute and the FINRA Investor Education, low income and high debt are still major hurdles Millennials need to go over before they start investing.
Though it is a myth that in order to begin investing you need a considerable amount of money, it is advisable to start when you have your debts under control and your saving’s account is healthy. If you invest, there will always be a chance you might lose money. If you are aware of this risk and can deal with it, investing might become the additional source of income to help you achieve your financial goals.
Investing might be key to help you achieve short-term financial goals such as clearing up an unexpected debt or making a big purchase. It might also help you with long-term goals such as retiring early. Keeping this in mind, it would be wise to consider a don’t-knock-it-until-you-try-it approach to investing. It doesn’t have to be scary. And what’s more, it could be beneficial.
Like most major industries, the broker industry hasn’t escaped the innovative hands of the internet. Today, we have online stock brokers offering a cheaper service than full service brokers do. It also helps that an online platform makes these types of brokers much more accessible to the public. Another particularity that makes online stock brokers attractive for younger generations is that you don’t need thousands of dollars to begin investing. With some online brokers, you can begin your investing journey with as little as $100.
However, there’s some leg work to be done if you choose to invest through an online stock broker. It’s important to learn about investment strategies and trading skills. Some online stock brokers offer access to financial professionals for advice, but you will probably will have to pay an extra fee for this service.
Other important considerations are your risk tolerance and your risk capacity. It’s important to keep a balance between the two. For better understanding, risk capacity is the risk the investor must take to reach their goals, whereas risk tolerance is the amount of risk the investor is comfortable or willing to take. Financial planning is key to have a strong handle on your investments and to calculate risk accordingly. Remember, as with anything in life, the element of risk will be present when you enter the world of investments.
Yet, this should not discourage you. There are plenty of strategies to deter risk. We can all agree money is important. If there’s an easily accessible tool to make more money, what is stopping us from considering it? An online stock broker might be the tool you need to enter and navigate the world of investments. If you are interested in taking a deeper look into online stock brokers, check out this link for recommendations.
A guest post from Consumer Advocates
