A solid financial foundation consists of knowledge, savings, a minimal debt load, a decent credit score, and investments. As a financial educator, I often see people fixate on the first four components while avoiding investing all together for a variety of reasons.
While there are legitimate reasons to put off investing such as focusing on maintaining consistent income, building your savings and/or eliminating debt, a lack of information typically prevents people from investing. When provided with the proper education and a better understanding of how to begin investing, most people can get started with investing on their own.
Don’t let the following common myths stop you from investing.
Myth 1: You need a minimum of $X,000 to get started.
This myth has some merit. There are certain firms and companies that will not work with a client unless they have a certain amount of investable assets. For years this prevented most working-class people from accessing the wealth-building options that were only available to a portion of the population. Today that is changing, and while some firms still require a minimum amount of assets to invest, not all of them do.
The industry is evolving, and in the last ten years, a host of Fintech startups such as Robinhood have been created to enable the everyday person to begin investing without costly minimums. Thanks to technology and innovation, investing on your own has never been easier; and in most cases, such as with Robinhood, you can start investing for as little as $1.
Myth 2: You Have To Work With An Advisor.
Similar to the previous myth, this is changing with the evolution of the financial industry. You don’t have to work with a financial advisor to begin investing. There are a few advantages such as working with a knowledgeable individual to craft your overall investment strategy, but you do not have to work with a financial advisor to get started.
I personally work with a financial advisor on my larger sum investments and self-manage my smaller amounts. A knowledgeable advisor can help you blend your self-guided investments into your portfolio picture once you are ready to work with a professional and as you continue to build investable assets.
While working with a financial advisor can be helpful if you are uncomfortable investing large sums of money, you do not need a financial advisory to begin investing.
Myth 3: All of the good stocks are already too expensive.
Good news! The investment ship has not sailed. You can still hop on board with a stock that works for you. There are several companies going public each month, and plenty of solid legacy companies that you can begin investing in today.
While they might not become as lucrative as Amazon has become, they can still earn you a decent return on your investment and are worth considering. For every break out stock, there are several more options that can and should be considered to help you achieve your goals.
If you’re ready to learn more about investing in the stock market, you’re in luck because I’ve partnered with Robinhood and Brit + Co to bring you Investing 101.
During this FREE class I take you through all the basics of investing in the stock market, covering:
- How the stock market works and breaks down all the confusing terminology
- A basic overview of different types of investment options.
- And by the end of the class, I’ll even show you how you can buy your own stock using the Robinhood investing app right from your phone!
So let’s start building this important component of your financial future today.