Investing

Investing is incredibly important to enhance your financial health and build a secure future (and ease your anxiety about the future!). Investing can be very intimidating. You may be saying to yourself: I don’t know how to invest, I don’t understand the stock market, investing is risky, I don’t want to lose any money. Those are valid concerns. However, you CAN learn about investing. It’s not as hard as it looks. Can’t I just hide all my money under a mattress? Unfortunately, no. Two reasons: 1) what if you are robbed/your house catches fire? 2) Your money is not making more money. This is the secret of investing…use your money to make more money.

But Lynn, you say, I don’t have any money to invest! First, do it anyway! Even if you just do $20 a month or $5 a month, that is still valuable. You are still growing your money and investing in your future. But Lynn, you say, I ACTUALLY have no money….like I can’t afford my basic expenses. Ok, then for you, you really can’t. First things are always first. Make your house payment, pay your house bills, buy food, and keep your car so you can get to work. Those things always need to be solid before you do anything else. You don’t need to be homeless or cold or hungry and have $100 drafted from your bank for your investments.

I have two recommendations to get you started if you are not yet investing. Recommendation number 1: the 401k or retirement account. A 401K is an account your company/employer may offer where your pre-tax dollars are taken from your paycheck and automatically put in investments for you. Often the company will match all or part of your contribution. THIS IS FREE MONEY; please do not turn this down! Your money will grow and be there for your retirement. If your employer does not offer a 401k, then you can choose a Traditional or Roth IRA. You can google the difference if you want or see a financial adviser on which one would be best for you.

2) The other recommendation for beginning investors is using an app that is easy to use and will help you build small investments slowly. I use Sofi. Another popular choice is Acorn. In the app you can set up a monthly contribution to an account or multiple accounts and they will choose your investments for you based on your goals and risk profiles (determined by simple online quizzes). I like that I don’t have to talk to anyone. I don’t recommend starting this second tip until you have an emergency fund ($1000 to $3000) and have saved up what you need for big purchases for the year in your sinking funds (vacation and car repairs).

You may be thinking…GIRL, I can’t save for retirement because I need to save for my kids’ college! This is not recommended. There are lots of problem solving skills we can use for college: go to a trade school, go to community college, grants, scholarships, financial aid, loans, etc. However, there is NO backup plan for your retirement. Yes, you may get Social Security, but you may not. Social Security will run out money as the Baby Boomers retire, and you never know what these politicians are going to do. Even if you pay for your kids college, they may not be in a position to help you when you need to stop working.

You may also be thinking GIRL, I will never retire. The world is a wasteland. Housing is skyrocketing. Medical care is a mess. I barely make enough to pay my living expenses, much less save. I will have to work until I die. This is a common perception with Millennials and any younger generations. And truthfully, this could happen. This is more realistic than it has ever been. Millennials are the first generation not doing better than their parents. High paying jobs are hard to find and expenses have far outpaced wages. If this is how you feel, I understand. My only advice is: we have to try. You may not be able to retire at 55 and travel the world and play golf every day and build your dream house in a warm and luxurious location. Our retirement will look different, so do what you can. If you can’t fully fund a retirement account over years of savings, at least save up enough for 1 year. If your health is bad, you will grateful you have at least something. Everything helps. Resist the urge to stop trying just because the outlook is bleak. Just like we don’t know if there will be enough Social Security, we don’t know what will change in our country in the next 50 years. Maybe a new program will be offered? Maybe a new world event will create a new economic opportunity? Maybe you will invent an amazing product or write a best-selling novel?

Keep going girl. You have been through hard things before, and you will get through hard things again.

AI was used to create this image!