Best Tips for Investing Online
With the economic climate as it is currently, it can be scary to know that you don’t have any money invested or saved for your future. Many in 2021 alone have decided to turn to investing their money. Investing early or at a younger age is one of the best ways to see fruitful returns on your money.
With compound interest, your investment returns can actually start earning their own return. With home expenses such as rent, utilities, groceries and other bills, it can seem like there simply is nothing left to invest. This is where you will need to master a budget of your monthly expenses in order to have funds to invest. Investing can be confusing and overwhelming to start so make sure to read our tips below whether you’re a beginner investor or experienced, there are helpful tips to consider.
How Do I Invest Online?
In order to get started investing online, you will first need to determine how much you want to invest. This is where creating a budget for yourself is helpful as you can calculate how much you can afford to invest monthly. How much you invest depends on what your investment goal is. If your investment goal is to have money for retirement, you will want to start with a 401k that normally matches what you put in. Make sure you contribute enough to our investment account in order to get a full match. It’s free money that you don’t want to miss out on.
When determining how much to invest, the rule of thumb is aiming to invest a total of 10 to 15% of your income each year for your retirement.
Open an Investment Account
If you are unable to invest in a 401k or simply don’t have one, your next best step is investing for retirement with a traditional or Roth IRA (individual retirement account). These are accounts that are used for retirement so if you want to invest for something else, it is suggested to choose something else besides a retirement account. Whether you’re looking to invest for retirement or something else, there are plenty of brokers online that are available to help you open an account. Check out the online brokers you can use for investing below.
- Merrill Edge – Merrill Edge offers self-directed tools for investing online with no trade or balance minimums. They have a variety of accounts to invest including IRAs, stocks, ETFs, Mutual Funds and more.
- Robinhood – Robinhood makes investing easier and offers beginner guides and tips for those who are a newbie to the investing space. There is no account minimum for Robinhood investing accounts.
- E*TRADE – E*TRADE is known for low fees and offers a variety of resources for beginner investors.
- SoFi – SoFi offers an all-in-one investing package that is awarded for being easy to use among beginner investors. There is even automated investing available.
- TD Ameritrade – TD Ameritrade is consistently awarded yearly for being the most well-rounded broker firm in terms of content and research for those that are new to investing.
Whichever broker you choose, each one provides lots of extensive information and resources to help you invest confidently.
Types of Investment Accounts
There are many types of investment accounts to choose from so it is important to decide on an investment goal so you can decide what type of account works best for your strategy. The types of investment accounts include the following:
- Mutual Funds
- Exchange Traded Funds (ETF’s)
- IRA (Traditional and Roth)
There are other types of investment accounts, but the types mentioned above are the most common currently.
Tips for Investing Online
Starting out investing online can be scary so make sure to review the following tips before you start:
- Start Early
- Decide How Much to Invest
- Open an Investment Account
- Understand Your Investment Options
- Pick an Investment Strategy
The best part about online investing accounts is you can do it any time of day and most brokers offer 24/7 help if needed. It pays to invest early so get started as soon as you’re able to in order to see a rewarding return!