Retirement may seem like an afterthought to many, yet we all dream about the day when we no longer have to work, lay in a beach somewhere drinking mai-tai's all day long. This will not happen if you do not plan, start investing early and consistently. If you stay in your comfort zone, it will kill you. You do not need thousands of dollars to start investing.
The earlier you start investing, the more time your money has to grow in the markets.
Here are the 3 steps to start Investing with as little as $100;
Step 1
Gather $100 which you are not planning to use in the next 6 months.
Step 2
Log in to Vanguard's website and create your account. You will need basic information like Social Security number, Bank account info etc.
Step 3
Pick where to Invest the Money. A good start is VOO, this is an ETF which tracks the S&P500. You can invest as little as $100.00. Locate the fund, click Buy.
It will ask you where are the funds coming? you just pick the bank account you entered previously and finish transaction. Set the dividends to be reinvested.
Once the transaction is done it will take a few days to post and show in your account.
Few words of wisdom,
1- Leave the money invested even if you have seen the value go down. Remember you only lose the money when you sell the fund, otherwise is just a number.
2- Remember you will be getting Dividends, those are quarterly payouts the companies pays investors. Yes you get paid to own the stock.
3- Remember not even the most seasoned financial advisor knows when the market is going to crash or go up, I do not care how many awards or accolades they have in the wall of their office (remember Bernie Madoff). Also remember the financial advisor does not want you investing in index funds since they are low cost.
Index fund cost 0.20% Financial advisor 1%. Now I am not a math guy and I can tell the difference, do the math in 10 years and you will be shocked on how much money you will save or spend.
4- Keep an eye in the markets, any dip in the market is a sign for you to buy, think of it like you are buying the fund at a discount.
5- Many times you can find Index funds in your employers 401k/403b. Just do a little reading on the costs.
Till next time,
JL
Disclaimer - This blog is meant purely for educational discussion of finance. It contains only general information about financial matters. It is not financial advice, should not be treated as such. This is not medical advice, for medical advice please talk to your medical provider.