Investing Moves You Can Make Yourself
What money moves can you make on your own without the consultation of an advisor? The true value of an advisor doesn’t come into focus until investors reach a level of sophistication regarding finances, or a level of net worth where a professional touch has its advantages.
Let’s look at some simple money principles you can implement on your own, building a good financial foundation and positioning yourself to take advantage of an investment advisor in the future. Here are five money moves you can make towards investing, starting with the two basics:
- Opening a Savings Account. This is the simplest of moves that can be a building block to a successful investment plan. Savings accounts right now do not have high a return on investment, but the trade-off is the safety of principal and no risk to losing your initial investment. This is a perfect investment to build up until you can roll it into the next money move.
- Open a Certificate of Deposit – this product is a step above a savings account, with two main differences. It earns a higher rate of interest, and the funds are untouchable for a predetermined period of time. Rogue offers a certificate with a minimum amount of $100.
The next three money moves address how to enhance your investment profile.
- Max out any match funding by your company to your 401k. This is a no brainer because it is free money. If your employer offers a retirement planwhere the employer matches your contribution up to a limit, make sure you are contributing to that limit at a minimum.
- Utilize the Dollar-Cost Averaging Strategy (DCA). This is one of the oldest investment tools in the bag. DCA, also known as the constant dollar plan, is a practice of investing specific amounts of money on a regular schedule (weekly or monthly) no matter the performance of the investment (stock or mutual fund), and over time you will have the potential to lower your average cost per share, thus increasing your return on investment in the long-run.
- Apply the “DRIP” Method. DRIP is the acronym used for Dividend Reinvestment Plan and is a program that allows investors to reinvest their cash dividends into additional shares or fractional shares of stock they own. This strategy is a consistent approach with building up your investment portfolio using the returns from current stock positions. This type of program is also applicable to mutual funds shares where the fund pays dividends.
Information is essential and by educating yourself, you are taking the first step towards financial wealth. The biggest part of your journey to building financial wealth will be the effort you put forth to educating yourself and Rogue is here to help! Explore our hub of Quick Lessons.
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