Financial investments is a smart financial strategy that can really pay off. More and more people are choosing to begin investing their money earlier in their careers, and it's easy to see why: Social Security and other forms of retirement plans are not necessarily guaranteed as they once were. So unless you want to be working until you are 70 or even 75, or you have a rich family member or a trust fund waiting for you, it pays -- literally -- to begin investing early. More and more companies, even ones with entry-level positions are offering 401k and other retirement plans, and these are well worth the literal investment.
Most financial advisors, for example Scott Gelbard, will advise you to invest as soon as possible, and to do so by enrolling in the 401k plan that your company offers. Many companies will match your contributions up to a certain percentage (check with your employer to find out what this percentage is, and if there are any limitations or exclusions you should be aware of), and even if they don't, your money alone has the power to go far. For instance, a salaried restaurant manager who nets $35,000 per year can contribute 2.5% of every paycheck, and after five years that 2.5% could add up to several thousand dollars.
But part of investing is playing your cards right. And by this it's meant that you should take the time to determine where your money is currently going, as well as where it should be going. Most financial advisors advise you to start with a 401k because it is a simple plan, and you don't have to pay taxes on any money that you put into it (but should you withdrawal your money during retirement, you'll have to pay taxes then; also, early withdrawal means paying taxes then, as well as dealing with early withdrawal penalties that can add up to a hundred dollars or more on every thousand taken out). But you can go above and beyond your 401k. Start there and learn how to watch the stock market and spread your investments around so that you have a certain percentage invested in low-risk markets, medium-risk markets, and high-risk markets.
When it comes to high-risk markets you may be tempted not to invest at all, but honestly you want to take this risk. Sure, you could lose out on a couple of hundred bucks - but on the flip side, you could gain a couple of thousand!
If you're completely new to the world of financial investments and you haven't even set up a 401k, now's the time to get started. Your local bank or credit union can help you grasp the basic terminology and function of the stock market, and a financial advisor or private investment firm can assist with helping you track the ups and downs of the stock market, and thus help you plan accordingly with your investments. Invest wisely now, and you'll reap the rewards later in life.
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