If you don’t have much money to invest, you probably shouldn’t hire a financial advisor. Consider this series of questions to help you decide. There are basically three investing options: do it yourself, use a robo-advisor or hire a financial advisor. Step 2: Decide To Invest on Your Own or Get Help Both offer Clark’s most common investment recommendation as well. 401(k)s and IRAs are both tax-advantaged retirement accounts. If you don’t have access to a workplace 401(k), consider opening a Roth IRA instead. Congratulations! It’s time to invest.īut before you launch into the first investment app you find and start trading, find out whether your job offers a 401(k) plan.Īs long as the combined expenses and administrative costs of your 401(k) plan are less than 0.5% annually, Clark thinks your first move should be to contribute to your 401(k) plan up to the maximum amount allowed. So you’ve paid off your debt and built an emergency fund. Step 1: Explore Your 401(k) and IRA Options So if you’re just getting started, it is okay to start small. For most people, it takes decades to fully fund retirement. Investing for retirement should be your highest priority after saving, Clark says. By building an emergency fund first, you can truly invest. You can theoretically lose some - or all of your money.Ĭlark says that it’s usually not a good idea to invest if you’ll need the money in less than five years, and that 10+ years is more ideal. Putting together an emergency fund can ensure you don’t have to borrow money whenever “oops” happen.īefore you get started, understand that by definition, any investment is a risk. Clark says it’s a matter of when, not if, you’ll need to pay for something unexpected. Relying on credit cards is not a good way to pay for unexpected expenses. But it’s often a critical move that deserves prioritizing, especially if you have high-interest credit card debt.Ĭlark strongly recommends saving before you invest. Paying off debt isn’t as fun as investing.
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