Whether you’re fresh out of college, a newlywed couple or reaching retirement age, it’s never too late (or too early) to invest and save money. And you don’t have to be rich to do it. Investing $100 a month at a 12 percent rate of return at age 25 will net $1.3 million over 40 years when you’re ready to retire.
In fact, more people have become millionaires through saving and investing than through spending money to become business owners. And while owning a business is risky and is a 24-hour-a-day job, stocks, bonds and other investments do the work for you and are all but guaranteed to grow.
Experts say there’s nothing complicated about investing, and with talk of stock market reforms aimed at simplifying the process, it could become as easy as depositing money into the bank. Many employers are even offering plans which automatically invest money straight from paychecks, eliminating the middle man–YOU–and your temptation to spend it on something else.
In order to make the right investment choices, you must do your homework. Before investing any money, experts say, you should read everything from financial publications to investment-oriented books.
The next step is to set long-term and short-term goals and convey those goals to a good stockbroker or financial planner. You will know you’ve found a good investor if he or she follows this rule of thumb: take more risks if you’re young, less if you’re older. Usually the bigger the risk, the bigger the payoff, but, unfortunately, the bigger the chance of a financial crisis, something older people can’t afford. A stockbroker will usually invest your money in a mutual fund, where it will be combined with other people’s money and allotted to different investments.
