By Bryan Trugman, CFPⓇ
Investing for your future is one of the smartest moves you can make, but let’s be honest—it can feel overwhelming at times. Whether you’re thinking about diving into stocks, contributing to your 401(k), or exploring real estate, it’s hard to know where to start.
The good news? You don’t have to be an expert to get it right. By following these 7 simple rules of investing, you can take control of your financial future and set yourself up for success.
1. Prepare Your Finances
Before you begin investing, you want to take the time to set up a solid financial foundation. This includes paying off high-interest debt and having a small emergency fund of easily accessible liquid money available.
If you begin investing before you’re prepared, it can backfire down the road.
2. Know Your Purpose
Once you’re financially prepared to invest, it’s time to set a purpose. Your reason for investing could be to save for retirement, put aside money for college tuition, or save for a down payment on a home. Knowing your purpose makes the journey more meaningful.
Along with identifying your objective, you want to determine when you’ll need your money back. This guides you in deciding which type of investment to make since some are better for the long term while others are better for shorter periods.
3. Determine Your Investment Amount
Now it’s time to determine how much you will invest. You don’t need to make substantial investments, but get in the habit of making contributions regularly. It can be as little as $100 a month going up to thousands of dollars per month depending on what you can afford.
4. Automate Investing
If you have a 401(k) through your employer, you’re investing! It’s advantageous that your investments are likely automatic, because when you don’t have to make those payments manually, you are more likely to be consistent. If the money comes out of your paycheck or your checking account without you doing a thing, you won’t have the chance to decide against making your investment.
5. Educate Yourself
Embrace the attitude that investing is a marathon, not a sprint. Most people don’t get rich overnight, so you don’t have to make spur-of-the-moment decisions about your investments. Instead, take the time to educate yourself about the choices you’re making. Also, don’t rely on someone else to tell you everything about investing. Even with a financial advisor giving you advice, you should have a general idea of how investing works.
6. Start Early
Since investing is a long game, time is your friend. The earlier you start, the more your money can grow through compounding, like a snowball gaining size as it rolls. Delaying even a year can cost you significant growth. Once you educate yourself on investing, get started. Your future self will thank you.
7. Diversify Your Investments
I’m certain you’ve heard the phrase “Don’t put all your eggs in one basket.” Well, that’s especially true when investing. Since investing isn’t guaranteed, you want to spread your funds across different types of companies to reduce your risk of loss. That way, if a company goes down or an industry tanks, you don’t lose all your investment funds at once.
Investing requires strategy, and with a commitment to making informed, long-term decisions, you can greatly enhance your investment returns. While self-education is key, partnering with a financial advisor is just as important. An experienced advisor can tailor an investment strategy to align with your unique financial situation and goals.
Ready to take your investment strategy to the next level? Our team at Attitude Financial Advisors is here to guide your steps toward financial success. Reach out to me via email at btrugman@attitudefinancial.com or give me a call at (516) 762-7603 to set up a free consultation.
About Bryan
Bryan Trugman is managing partner, co-founder, and a CERTIFIED FINANCIAL PLANNER® practitioner at Attitude Financial Advisors. With more than 17 years of experience, Bryan specializes in addressing the financial needs of new parents as they seek to realign their finances, assisting divorced individuals as they navigate an unforeseen fork in the road, and strategizing with those seeking to accrue a dependable retirement nest egg. Bryan is known for being a good listener and building strong relationships with his clients so he can help them develop a customized financial plan based on what’s important to them. He is passionate about helping his clients experience financial confidence so they can worry less and play more. Bryan has a bachelor’s degree in industrial and systems engineering with a minor in mathematics from State University of New York at Binghamton. He has served on the board of the Financial Planning Association and continues to be actively involved in the national organization. He is also a member of the Plainview-Old Bethpage Chamber of Commerce and has served as its vice president and as a board member. When he’s not working, you can find Bryan on the ballroom dance floor or engaged in a fast-paced game of doubles on the tennis court. To learn more about Bryan, connect with him on LinkedIn. Or, watch his latest webinar on: How Much Is Enough? A Surprisingly Simple Way to Calculate Your Retirement Savings Needs.
