The money you have loses approximately 2% in value every year. In order to combat this you need to grow your money by at least 5-7% each year to just curb inflation. If you’re not investing you’re losing money.
There are many types of investing and not all types of investments are for everyone. You’ll have to do some research to find the best investments for your risk level and budget. At a minimum you should be taking advantage of 401(k)s and IRAs and if you have the time and effort you can consider entering the stock market.
Your Guide to Investing
The most basic entry into investing for many people is their 401(k) plan. This is the modern day replacement for pensions and is company sponsored. A majority of companies offer some form or company matching and you should be adding into your 401(k) to at least get the company match, even if you don’t put more in.
There are limits to a 401(k) plan and many investors opt for an IRA to have a little more control over their money. An IRA also has yearly investment limits but acts as an accelerated savings account for money you don’t need at that point in time. There are several tax advantages to using an IRA.
The most aggressive way to invest but also the most lucrative is investing in the stock market. You can either stand to make tons of money or lose it all. If you’re not sure how to invest in the stock market, just know it takes time and effort to research the stocks before investing. The guide we’ve put together covers the basics to stock investing but it takes years to perfect your strategy.