Getting Started with Investing

Getting started with investing can be as easy as opening a savings account. A savings account may have been started as early as childhood by your parents, and continued until you were an adult. This would definitely be a good start in investing, along with another investment such as savings bonds. Savings bonds are issued by the federal government and accrue interest over a period of time. Savings bonds are also considered to be one of the safer investments to acquire.

Savings bonds will increase in value, along with the interest they accumulate. If they are not redeemed until you need them later in life, they could be worth a sizable investment to you. If you do purchase savings bonds, the maturity dates will vary on them and its best not to redeem them until they have at least reached their maturity date, stated on the bond.

As an adult, most likely a person’s investing strategies change to accommodate a sound financial future. This investing could possibly start with your place of employment. Most companies offer their employees a chance to invest in a 401K savings plan and possible stock options, as well.

A 401K savings plan is a retirement savings plan that employees themselves invest in, and which are often matched by an equal contribution from their employer. This savings plan offers the employee a tax free benefit on their contributions until withdrawal, which does have penalty fees attached for early withdrawal. The more you can afford to invest in your 401 K from your employment income, the better you may be in the up and coming retirement years.

Some companies offer stock options, giving the employee a specified number of shares that they may purchase form the company at a set price. If your company is stable and growing in profit, this could be a huge investment savings on your part. For example, if you purchased company stock, at perhaps $12.00 a share, and the company is continually growing in capital, your stocks could increase to maybe $30.00 in a few years, where your initial investment was only at $12.00 a share. Then your shares have gone up $18.00 for every share of stock you purchased.

Banks also have investment offers to consider, such as Money Market accounts, CD’S and IRA’s. It’s best to consult with a bank’s loan officer to find out which fixed interest rate and fixed term rate best fit your financial goals. 

Money market accounts, typically yield higher interest rates and have shorter withdrawal terms.  CD’s are certificates of deposits where your money can earn interest, but early penalty withdrawal fees will apply before the maturity date. IRA’s are individual retirement accounts that generally, earn tax free interest, abiding with the terms of no withdrawal until around the age of 59 1/2, if no other exceptions to the rule apply. Otherwise,with early withdrawals steep penalty fees can be expected.

Getting starting with investing can vary for each individual depending on their needs and financial goals, but with a set strategy and future plan in mind, you’ll be starting in the right direction.