Starting to Invest

Now that you’re beginning your career you’ve decided to get started on your financial goals. The problem for many is that there are so many options. Maybe you want to take advantage of the 401(k) match offered at your job or perhaps you want to get started with an IRA.

You may wonder if you should be thinking about retirement right now when you have debts. Should you start investing right off the bat or should you pay down your student loans and other debts? What about investing in a business idea – could that be the right move?

Whatever you plan on doing, I suggest at least saving a portion of your money for retirement planning. You don’t want to spend your retirment years struggling to pay your bills. With time on your side, you don’t need as much as you imagined to build a good sized nest egg.

Investing Basics

Wherever you begin, starting to invest can be overwhelming. It is easy to get lost with investing due to all the strategies, theories, and news that are put out there – it can be information overload. Instead of trying to keep up with the latest buy or sell pick, you need to have a general plan that can give you some overall focus, but still give you some flexibility. One book that I found helpful was The Coffeehouse Investor by Schultheis.

His 3 fundamental principles of investing are:

 

  • Save for a rainy day. (Develop a long term financial plan)
  • Don’t put all your eggs in one basket. (Diversify in different asset classes.)
  • There is no such thing as a free lunch. (Capture the entire return of each basket, or asset class, through low cost index funds).

Speaking of solid investing books, I also want to recommend a couple more to get your started on the right foot.

  • I Will Teach You To Be Rich: Ramit has some wonderful tactics for those in their 20s starting out with finances. He has an easy to implement system to get going and he shows you how you can tweak it to fit your style.
  • The Bogleheads’ Guide to Investing: This book has a ton of information so I would buy it for your personal library. It’s a bit conservative (which isn’t a bad thing), so I’d suggest you use this as a guide to help you with saving up for retirement.
  • The Four Pillars of Investing: Bernstein presents a guide on creating an investment portfolio.

You can definitely dig deeper into the topic of investing, but those books I mention will give you more than enough information to get you on a sound investing strategy.

Thoughts on Investing

How many of you have started investing (not just for retirement)? What books do you recommend for those looking at making the leap?

Photo Credit: jollyUK