What Every Woman Needs to Know About investing? : We don’t see a whole lot of young people, especially women talking about finances and it’s such an important topic to be able to become financially independent, free, and empowered If you want to learn how to invest your money then this article is for you.
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It’s very important to have an emergency fund:
This is just a great rule of thumb. You never know what’s going to happen next. It means we’re literally living through a pandemic. If you need emergency savings in case you lose your job or something, just look at the news across the board. It’s recommended that you least have amount of money in your savings for an emergency and then to slowly grow that two -three months to six months.
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Pay-off debt:
It’s very important to eliminate debt as soon as you can because that’s going to set you back in the long term and with any high interest rate debt you want to get rid of that. Before you start making any big investments because that’s just money that’s going to keep going down the drain, if you don’t address it
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Open a retirement account:
Start your retirement as soon as possible. Open a target retirement fund account through any investment company. Basically, there are different types of retirement accounts. Some of the most popular ones are for job-oriented peoples. If you’re investing, you’re doing great, you’re preparing for your future, that too allowing your money to grow tax-free.
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Invest in stocks:
The stock is an investment that represents a share of a company. For example, you can buy a stock of face book which means you basically own a little piece of face book’s big pie and so as that company grows your stock is going to grow with face book. The stock market that you always hear people freaking out about is the marketplace for stocks and where stocks are held so it shows all the different shares of company ownership and how they’re performing overall.
The interesting thing about the stock market is that it’s generally controlled by investor’s emotions. So if people are starting to freak out because let’s say there’s a pandemic they’re going to want to pull their money out and sell those stocks and shares and if a bunch of people do that at once that’s going to cause it to drop but then as soon as they’re starting to feel like okay you know this is good I’m going to reinvest my money in the stock market the stock market’s going to go backup. You often hear people talking about investing with risk versus reward.
So, you’re going to have to risk more if you want a higher reward and want to try to get more money but there’s also a lower risk investment which means you’re going to have a smaller reward profit margin so you’re going to make less but you’re risking less as well.
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Invest in Bonds/Funds/Mutual Funds/Index Funds:
- Bonds: A bond is something that falls in low-risk category. A bond is a contract with a company or the government to whom an investor lends his money for a long period and benefits at the end of that period are predictable. These benefits are always on the lower side if we compare with other securities. It’s considered a low-risk investment.
- Funds: Next, funds which you can enumerate like a big bowl of stocks and bonds etc. It is like buying a stock is like buying one single flower but buying a fund is like buying the whole bouquet with all the bunch of different flowers.
- Mutual Fund: Mutual Fund is managed by some very smart people who understand the stock market whereas funds are managed by the investors themselves. They aggregate the funds of such investors into a bouquet for the best investments. So basically, you’re owning a bunch of stocks in one package, so there’s more diversification because if you’re to invest in one stock.Let’s say you buy a whole bunch of face book and face book just plummets, all your money is going down with face book. That’s why it’s very popular to hear that you need to diversify your portfolio.
Basically, don’t put all your eggs in one basket. Mutual funds came along for that reason to be able to invest in stocks but to diversify across a larger like platform. These mutual funds experts are going to charge a big fee. Maybe like one or two percent of your mutual funds.
- Index Funds: An index fund is a portfolio of certain investments that you can buy into and then you own a little baby share of a whole bunch of different stocks and companies. Big old fan of index fund is Warren Buffett. Index Fund is a representative sample of the stock market. So, it’s like a mutual fund but instead of being run by some like fancy manager it’s passively managed by a formula.So instead of like a mutual fund where you’re trying to beat the market, you’re basically trying to match the market. So big difference is that you don’t have a Mutual Fund manager and you’re able to cut out a whole lot of costs. Index fund is something that you usually invest in, you may sit on for awhile and not touch it. One thing to keep in mind is all index funds are mutual funds, but all mutual funds are not index funds.
It’s kind of confusing. Basically, the way Index Fund grows is through compounding interest, which is basically reinvesting the interest into the initial investment. Investment on mutual funds, there’s no interest paid but the investor might have dividends or capital gains reinvested to compound over time, so looking at investor’s interest, here’s a compounding interest calculator to get an idea of how this would work.
Let’s say an investor puts in index fund, a hundred dollars a month, length of time let’s say 30 years say we’re putting out a hopeful eight percent and calculate annually. Look at this number he originally puts in just 36 000 of own cash and because of compounding interest it grows to 146 000 in 30 years.
So, imagine if a higher number of an initial investment is put in, the investor might have to look out other sources for meeting emergency needs. But here, more money each month may result into a bit of a higher annual rate of return. Index Fund Managers take much lesser handling charges like point zero four percent. There are many organizations providing this facility.
There are many options for investing your money wisely. But, how to invest, where to invest and how to handle all this fuss with ease. You can just open an account with online trading platform at https://scottandrew.co.uk with direct access to all financial markets and all investment options that too from a single currency account. If you are new to investing, then you can have access to their demo account before actually indulging in real trading to get proper use to the platform and how actually trading works. There are no hassles in opening an account with minimal documentation. You also get personal manager, various calculation tools, exchange rate charts, stock reports and help from market experts all at one platform.
So, what’s next? Get set and start investing.
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