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The first step to investing is to save. Saving is essential, primarily when investing in high-risk properties. There is always the possibility of losing your money, or a tragic event occurring, which requires a substantial amount of money. If you can manage to build up an emergency fund, you won’t have to worry as much about the possibility of your investments tanking.

Next, you want to determine your investment goals. There are a few factors to consider:

  • How long do you want to invest? Some investments may require your money to be tied up for long periods of time, while others are more open-ended, although many times the longer you invest, the higher the return.
  • How much risk are you willing to take? Investing in the stock market is the riskiest option, but can lead to significant returns. CDs have little-to-no risk, but their gains are minimal. If you’re not sure where to start, consult a professional or place more emphasis on the other points.
  • How much attention do you want to give? Real estate and the stock market are two needy investments. If you have no time to spare, consider investing in a product with a steady rate. That way, you won’t be surprised by your returns.
  • How much money do you have available? I’m not merely talking income, as with real estate you can get a mortgage. It is essential to understand the total amount of money you have to put toward investments, and do not bite off more than you can chew. That being said, if your budget is tight, consider investing using an app, such as Acorns or Robinhood. These apps are marketed toward those looking to get started in the stock market but don’t want to place hundreds of dollars in.

After you’ve determined your goals, look into the different options available to you. Make sure to consider possibilities outside of your comfort zone. You may find a choice you haven’t heard of, and it could lead to great success. For now, let’s look at a few investment options:

  • CDs – These are time-deposits backs by banks. You make an Annual Percentage Yield (APY) off of them, but your money is stuck in the account until the period is up, which can be a few months or a few years. Closing the account ahead of time can result in costly fees, so if you’re strapped for cash, CDs may not be the right option.
  • Roth IRAs – “Save for retirement while you’re young!” says every parent. It is important to think about your future, and even though retirement may be many years away, investing in it now will help you worry less later. Plus, one of the benefits of a Roth IRA is you pay the tax on your money upfront, so you can withdraw your money later without paying any taxes on it. However, just like CDs, IRAs tie your money up for years.
  • Stocks – Stocks are one of the riskiest investments you can make. However, people have made more than enough to survive on stocks alone. If you’re interested in watching the stock market, look into buying a few inexpensive stocks to start.
  • Mutual Funds – Like stocks, mutual funds invest in the stock market. The difference is, mutual funds spread out your investment, so even if one stock tanks, you can still make money.
  • Real Estate – If you are hands-on, or are interested in managing tenants, real estate may be an option for you. It can be incredibly lucrative, and there are tons of ways you can be a real estate investor, from flipping houses to being a commercial landlord.
  • Cryptocurrency – A new and innovative form of payment is cryptocurrency. If you’re skeptical about the banking system or want to buy into cutting-edge fintech, check out the various kinds of cryptocurrency, including Bitcoin.

No matter how you decide to invest, there are two things you should always do: research options and talk to a financial advisor. In no time you’ll be making your first investment!

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