Invest Now for Dividends Later
No matter what age you are or even your level of employment or
economic position, it may be a good idea to start preparing now,
even in a meager way, for eventual financial security. Some
people feel they need every dollar they make to get by from one
paycheck to the next. While this may be true for some, there are
others who squander significant sums on insignificant things.
They could be socking that money away into an investment account
that, over time, could lead to huge savings and a comfortable
retirement.
It isn't hard to get started. All you need is $100 to $500 to
open an account, and anywhere from $25 to $50 monthly to
continue building your stock or mutual fund portfolio. In fact,
a young person aged 20 could deposit $2,000 and then not another
dime. In forty years he or she might have tens of thousands of
dollars. The stock market has followed fairly predictable
patterns since its inception in the 1800s in New York City.
Although historic events like the Great Depression and several
global wars have impacted its activity, the gains and losses
remain fairly consistent, with most investors earning a
predictable return on their investment.
Of course, no one can predict what the future holds, or whether
the pattern will continue. And none of us should invest more
money than we can afford to lose--just in case the world economy
crashes one of these days. But with steady deposits that
continue to compound and earn interest over time, a sensible and
prudent investor can substantially increase the amount of money
going for retirement or a dream vacation at some future point.
If you are thinking about opening an investment account, do a
little online browsing for more information. Visit sites like
E-trade or Scott's Trades to see how the process works. Start
reading your newspaper's financial pages for details about the
latest stock prices and market trends. Do a little paper trading
by following the daily stock news. Instead of actually
purchasing stock, however, work it out on a piece of paper by
pretending to buy a certain amount of stock for the specified
price and then watching to see how it performs over the
following week. Chart your gains or losses to figure out whether
your stock deal was successful. If you do this for several
months, you will soon learn to understand more about the stock
market and how to buy and sell like the pros.
Even if your budget is tight, try to set aside a little money
to open an investment account from any windfalls that come your
way from job bonuses, inheritances, or cash gifts. Some people
set aside their annual job raise, or part of it, as part of
their investment strategy. Then, as your budget becomes looser
with paid-off bills or grown-up kids, you may be able to start
having a standard monthly amount deducted automatically from
your paycheck and deposited into your investment account. This
could take the form of a Roth IRA (individual retirement
account), a money market fund, a mutual fund portfolio, or
individual stock shares.
It probably is a good idea to take an investment class at the
community college or sign up for a financial planning seminar.
Success may be just a few years away if you start now and plan
right.