2021 has been a crazy year for investing. Stocks like GME (GameStop) went from $3-ish in 2020 to nearly $500 per share during the craze of the first quarter of the year. That means if you had invested $300 in GME in 2020, you would have been able to sell it for $50,000 at the beginning of 2021. Wild!
The amount of new investors to hit the scene since GME blew up is unprecedented. If you haven’t hopped on the train, now’s the time! It’s leaving the station and going to the moon. 😉 Stocks like GME – and day trading in general – can be extremely volatile. If learning how to invest in stocks in a safe way is more up your alley, you’re in the right place.
3 Safe Ways to Get Started Investing
Everyone can benefit from having a larger nest egg for retirement, right? But stocks and investing can get confusing pretty quickly. Surely you’ve heard the horror stories about investors losing everything, too. Those factors combined make for a pretty delicate balance when it comes to getting started with investing.
Setting up a conservative, diverse investment portfolio can be done in just a few easy steps – even if you don’t have tens of thousands of dollars to invest right away. Investing in a more conservative way will increase the chances of your assets being protected, and greatly decrease your chances of “losing it all”, as so many have done in the past.
401K or IRA
Many individuals begin investing with a retirement account. Whether it’s a 401(k) plan through an employer, or an IRA, you can start investing with a retirement account today. Retirement accounts are designed for long-term investing, and they’re tax-sheltered, which can help minimize your tax liabilities.
Not everyone has an employer that will match their contributions. If you’re fortunate enough to have an employer that matches them, max your investments out ASAP! This may seem like a financial stretch, especially if you’re already struggling financially, but I promise you it is worth it in the long run. Even if you have to pick up a side hustle to ensure you can max out your matched investments, do it now – for your future self!
Fundrise is a real estatement investment trust. You can get started with as little as a $500 investment. Real estate is always a hot topic when it comes to investing. Sometimes the market is up, sometimes it’s down, but if you get in at the right time, it all evens out – and you can earn some money in the process!
Fundrise is easy to use, even if you’ve never invested in real estate before. When you sign up, you can choose a long-term investing goal. Fundrise will keep you on track by letting you know exactly how much to invest each month to reach that goal. They’ll also give you a heads up if you’re off track.
While Fundrise does have typical advisory fees, they’re minimal and you can offset them by inviting your friends to join Fundrise. You’ll earn 90 days of investing without advisory fees for each friend who joins Fundrise through your link. Your friends will also get their fees waived.
Set your Fundrise account up to where your dividends are reinvested automatically and you’ll be surprised at just how quickly your portfolio grows!
Auto-invest makes it easy to schedule monthly recurring investments to be automatically withdrawn from your bank account, so you don’t forget to invest each month and stay on track! I’ve found it’s best to have everything as automated as possible, to get into the habit of making investing a priority. If you wait until you can “afford” to invest, that time may never come. Treat it just like you would your emergency fund: make it a priority.
Much like my advice with the matched contributions, I highly recommend finding a way to make some extra cash so you can invest. Even on a limited budget, investing $100 or $200 a month will add up in the grand scheme of things.
Robinhood & Stash
Everything you need to know about investing with Robinhood can be found here (https://robinhood.com/us/en/support/trading/investing-with-stocks-the-basics/) and with Stash can be found here (https://learn.stash.com/).
Read up on stocks and investing before you dump all of your savings into any type of account. Look at fractional shares if you’re only able to invest a little at a time. I started with $5 to $10, just remember to only invest what you are prepared to lose.
If you’re able to invest a little more, look into ETFs or stocks that pay dividends. Even though the dividends aren’t usually that high, every little bit adds up – especially over the course of 10, 15, or even 20 years.
Many people think they’re too old to start investing and getting a return, but that isn’t true at all! I started at the age of 43. You can see large returns on investments in under a year in many cases. Long-term conservative investing is the safest option, but day trading or investing in single stocks you have faith in can return much bigger yields in a fraction of the time.
Getting Started With Investing
Always remember to keep your portfolio diversified. You can diversify by using the methods we talked about today. Fundrise does a solid job letting you know exactly where your money is invested, when your portfolio acquires more projects, and what your projected earnings will be over time. Investing apps like Stash will even show you how diverse your portfolio is, at a glance, right in the app.
If you are struggling to figure out which stocks to invest in, you can watch YouTubers like Chris Sain, to learn their process of finding winning stocks. Learning more about stocks and investing is going to pay off better than following a “hunch” from a friend. Understanding why stocks perform the way they do, learning how to watch trends, and investing conservatively is how I have built my portfolio.
Well, what are you waiting for? The sooner you get started, the better off you’ll be!