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Step 5 of 12 Learn about the Costs
Investing does not come free.
First, the dividends your investments earn are subject to income tax, generally at a rate of 15%, by the federal government. There may be more added on by state and local sources.
Second, you may have to pay your broker for the cost of buying and selling a stock. And finally, you’ll need to pay another federal tax on long-term capital gains…
Seems like there is someone wanting a cut of your investments at every turn. So be sure to calculate the costs of investing before jumping into the market or taking funds out of it.
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Step 5 of 12 Learn about the Costs Investing does not come free. First, the dividends your investments earn are subject to income tax, generally at a rate of 15%, by the federal government. There may be more added on by state and local sources. Second, you may have to pay your broker for the cost of buying and selling a stock. And finally, you’ll need to pay another federal tax on long-term capital gains… Seems like there is someone wanting a cut of your investments at every turn. So be sure to calculate the costs of investing before jumping into the market or taking funds out of it.
Step 4 of 12 Set aside 15% Before you start investing in stocks or bonds, invest in your future! Experts recommend setting aside 15% of your income for retirement. If you are employed, you likely have access to an employment-sponsored retirement plan. Take advantage of any matching funds offered by your employer to beef up those retirement savings. Take some time to review the plans you already have and consider adding additional retirement plans, such as an IRA or Roth IRA, to your portfolio for additional savings.
Step 4 of 12 Set Aside 15%
Step 4 of 12
Before you start investing in stocks or bonds, invest in your future!
Experts recommend setting aside 15% of your income for retirement. If you are employed, you likely have access to an employment-sponsored retirement plan. Take advantage of any matching funds offered by your employer to beef up those retirement savings. Take some time to review the plans you already have and consider adding additional retirement plans, such as an IRA or Roth IRA, to your portfolio for additional savings.
Investing Step 3 of 12 Learn the Market
Step 3 of 12 Learn the Market
If you’re looking to start investing soon, take some time to learn about the market. Sign up for an educational course on investing, read several books on the topic or follow a podcast or social media platform that’s dedicated to investing and personal finance. You’ll learn the way the market works, important investment terms to know, the various types of investments and the different styles of investing, too.
Remember: An informed consumer generally makes better choices.
Investing: Step 2 of 12 Emergency Fund
Step 2 of 12 Start an Emergency Fund
Before you sink your money into investments, make sure you have funds set aside to cover an expensive emergency. Getting caught unprepared can land you deep in debt. For this reason, experts recommend having three to six months’ worth of expenses set aside in an emergency fund. This way, you’ll be ready for any financial surprises life throws your way.
If you don’t have an emergency fund, start building one now!
Investing: Step 1 of 12 Get Rid of Debt
Step 1 of 12 Get Rid of Debt
Before you start investing, it’s a good idea to get rid of your debt.
Assess your total debt, and start maximizing payments on one debt at a time, starting with the one that has the smallest balance or the highest interest rate.
Trim your budget, or look for a side hustle, and use the extra funds toward paying down this debt.
As you do so, be sure to continue making minimum payments on your other debts. When you have finished paying the first debt off, move onto the next. You’ll be debt-free before you know it!