IS IT TOO LATE TO INVEST?
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When it comes to investing for retirement starting earlier is always the best option. What can you do if you have missed a significant number of prime investing years?
Hard lessons learned on investing
I started investing much later than I would have liked. As a young twenty-something, I just didn’t understand the need for retirement planning. I was young and retirement was off in the very distant future. Was it really though? Retirement might be years away for most of us yet saving for retirement should start early. When you start saving for retirement the act of investing is so much more than the few dollars that are being placed into an account each paycheck. Retirement savings is significantly affected by the investments chosen, time invested, and compound interest. In my early twenties as I began my career all of these concepts were unfamiliar to me and with no understanding of this I saw no urgency to start younger.The lost years
The years of lost time will undoubtedly cost me greatly but dwelling on the lost time and poor choices will not change anything. Instead, I have chosen to develop a game plan to make a difference in the future.
3% plus match into my 401k
Roth IRA
Stash investment account where I choose investments I am interested in pursuing and learn investing on my own
Each of these investments is different and helps me to diversify and try something different. The Stash investments are riskier than some because I am choosing investments and managing them with no experience. The upside is I am investing small every week and learning on my own how investing works. I’m enjoying getting the experience and discovering what investments are growing and where they are headed. This challenge has taught me a lot in the past few years and I’m sure will continue to teach me. I’m discovering why they recommend diversity in investments as I see the market reactions to various factors. Having too much money in a few stocks could be very devastating if that is where you are placing your hope for the future.
It’s not too late to start now
If you are like me and have missed years of investment opportunities it’s never too late to start now. You can never get those missed years back but you can start before you miss any more years of growth potential. Growth in any situation starts with small consistent steps. Those consistent steps combined with a positive outlook can help you become more faithful with your retirement saving goals. If you are just starting a 401k a great place to begin is with the amount your employer will match. In my case, that is 3% of what I earn and they match the same. Depending on your employer you may have more of a match or less. Take advantage of any additional funding opportunities like this to grow your retirement savings more.
Saving for retirement in addition to your 401k
Another great chance to save for retirement is a Roth IRA which is often available in addition to your 401k. Sometimes just saving 3% to your 401k seems like more we can afford and if that is you too I completely understand. This is why I waited until my mid-twenties to start my 401k because I never felt I could part with even a few extra dollars every paycheck. I recommend going over your budget as best as you can to allow for the minimum 401k contribution at least. If you can find other ways to save and invest for retirement do it when you can, but start now as small as you have to. Every dollar invested today is worth more down the road due to compound interest with the years it will be earning for you.
Learn from your mistakes and move on
I’m no expert on investing but I am learning as I go just like you will do. Experts don’t become experts overnight they learn and become experts through wise counsel, positive and even negative experiences with managing finances. A few great ways to learn more about your finances and investing would be…
Listen to the experts and read their recommendations
Try yourself to begin investing on a small scale move slowly and cautiously as you learn
Seek advice from a trusted financial expert and let them advise you on your next smart financial move
Seek advice from trustworthy sources
Keep in mind not every financial expert has your best interest in mind. Ask lots of questions, make sure that you are investing, and making choices that are best for you. Many financial experts make money when you invest so their recommendations could be biased based upon commissions to be earned. Pay close attention to whether the choices you are making will benefit you most and voice your concerns if you feel it is not in your best interest.
In a lot of ways learning to manage your finances are trial and error. We often learn best through mistakes but hopefully when we make mistakes those are not too financially devastating. Taking chances with your finances can be necessary at times to experience some growth. When you take a chance make sure that when you do that you are in a place where a loss will not be crippling. Loss is inevitable along your investment journey but consistent investing over time also leads to growth that would not otherwise have been possible.
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