Are You Ready to Invest?
Saving money can be a challenge when you have student loans and other expenses to pay. Milestones like homebuying, marriage and children are looming in the near future, but you barely have the discretionary income to contribute to an emergency fund! You may have a retirement fund set up through your employer, but you’re only contributing the minimum percentage of your paycheck. You want to build your savings, but a sense of financial insecurity is getting in the way. How do you know when you are ready to take the plunge? Ask yourself these five questions to determine if it’s a good time to invest.
- Do You Have Enough Money?
Investing is an ongoing commitment. If you currently do not have the money to meet short-term goals or build an emergency fund for unexpected expenses, take some more time to save. Credit card debt is another burden on an investment portfolio; try to cut that balance down before taking on this financial responsibility.
- What Are Your Long-Term Goals?
Whether you plan to pay off student loans early, buy a vacation home or save for college education, identify those major goals first. This will help you determine the investment strategy that is best for you and how aggressive you can be. Clear, tangible goals can also help you stay motivated through the peaks and troughs of the market.
- What Is Your Target Return?
The amount of money you expect to make from your investments will depend on your goals and may fluctuate as years pass. It can be hard to pinpoint an exact number, especially for events in the distant future – like a child’s college education or retirement – but keeping a rough amount in mind can help you adjust your investment strategy over time.
- How Much Time Do You Have to Save?
There are many advantages of investing at a younger age, including the luxury of more time to save. However, we understand this is not financially possible for everyone. The amount of time you have to invest until you need the money becomes even more critical with age. Work with a financial consultant at Ion Investments to maximize the growth of your portfolio.
- What’s Your Risk Tolerance?
The stock market is often unpredictable, going up and down every minute. Risk is the level of uncertainty an investor faces in relation to their expected return. Your tolerance may be dependent on a number of factors, including age, financial status and investment experience. The levels range from conservative, meaning safety is more important than your return on investment, to aggressive, when an exceptional return outweighs potential loss.
When you’re ready to make an investment, it’s imperative to properly manage your portfolio to maximize returns. To learn more, visit our online Financial Learning Center today.
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