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The start of the investing process can be daunting and feel like you are making the wrong moves. Investing is never a wrong move but there are smart moves to make when investing. The millennial generation is right on track to begin putting a part of their income from their entry-level jobs. Millennials: here are the essential tips for beginning your journey in investments.
Step 1 – Study
Hopefully, your formative college years will help you with this one. Of course, the first step in investing is doing your homework and researching general investments and the stock market. NerdWallet’s How to Invest in Stock is a great resource to familiarize yourself with stock investment. Whether or not you want to manage your investments yourself or have someone make the decisions for you is a great first step in getting your feet wet with the stock market.
Step 2 – Risk
The choice of how much money you would like to risk is the biggest decision to make. In the investment world, the more risk means the potential for more reward. Certain investments make you take on risk, such as stocks, that must offer you a premium for doing so. Investments that require you to take on risk, like stocks, have to offer you a premium for doing so. Could you lose money and never collect that premium? Sure, but that’s unlikely when you’re in it for the long-term.
Step 3 – Plan
Once you have researched areas of investment and the amount of risk you would like to take, it would be wise for your next step to be a well-thought-out strategy of how much and what you would like to invest in. Whether you are doing it by yourself or with the help of a financial advisor, the strategy is key in setting yourself up for long-term successful investing.