Investing 101 for beginners

On this episode of Getting Rich, created in partnership with Bankrate, go on a financial journey with Carmen Perez as she outlines the pro tips and tricks to own your bank account, from credit scores to crushing student loan debt.

Investing is a great way to build up your finances and make your money work for you! If you’re new to investing and are wondering how to get started, financial expert Carmen Perez (@makerealcents) of Make Real Cents is here to help!

In this episode of In The Know’s Getting Rich, Carmen shares useful tips and helpful resources for learning how to invest. Then, she chats with James Royal, a senior investing and wealth management reporter at Bankrate (@bankrate), who shares his expert advice on investment strategy. 

When it comes to investing, the first step, according to Carmen, is to decide whether you want to manage your own investments. “In the investing world, you’ve got a couple of options in front of you,” Carmen explains. “If you think you’ve got the smarts and wanna take an active role in your stocks, then you’re going to want to manage your own investments.” 

While managing your own investments gives you more control, it takes a lot of time and knowledge. If you’re willing to seek outside assistance, Carmen recommends working with a financial advisor. “There are professionals who spend their entire lives studying the market and using other people’s money to make successful investments,” Carmen explains. “Even though there’s always a little risk, a hired advisor will make the best decisions on your behalf without a lot of effort on your part.”

Once you’ve decided whether or not to work with a financial advisor, it’s time to open your account and start investing! Just remember, investing takes patience. “Once you’ve opened your account, it’s time to watch your money grow,” Carmen says. “Now, it won’t happen overnight, but with the right amount of patience, your finances can go far. Like, really far.”

Next, Carmen sits down with Bankrate reporter James Royal, who breaks down investing into 3 simple steps. According to James, investing is all about deciding “what you need to buy, when you need to buy, and how you need to buy.”

If you’re new to investing, James recommends starting with index funds. “Index funds are a collection of stocks that trade as if they’re a single security,” James explains. “So you wanna own a broadly diversified index fund. This is something you don’t have to track and follow, and anybody can begin with that.”

Next, James recommends investing on a regular schedule. Determine how much and how frequently you can afford to contribute money to your investments, and stick to that schedule. “Figure out what you can add to the market weekly, each paycheck, monthly, whatever you can contribute and then contribute regularly,” James advises. 

Finally, when making investment decisions, try to remove your emotions from the process. The most important thing, according to James, is to be patient. “Buy regularly and simply hold on, and you need to avoid the temptation to sell and derail your long term returns,” he explains. 

If you’re still confused about investing, James recommends heading over to Bankrate, where you can compare brokerage accounts and determine what kind of investment help you need. “Investigate brokerage accounts, for example on Bankrate, where we review all the major players, and figure out which one fits your needs best,” James advises. 

After chatting with James, Carmen shares her final 3 hot tips for investing! First, start with a small amount of money and invest more as your expertise grows. Second, make sure to diversify your portfolio by investing in a few different types of stocks. Finally, leave your investments alone and allow them to grow! 

“If you’re constantly moving funds around, your money won’t have a chance to grow,” Carmen explains. “Patience is key when it comes to investing.”

Carmen is not a registered investment advisor. The above information is not investment advice and is intended for educational purposes only. Please consult with a financial professional to assess what investments are suitable for you based on your financial objectives, needs, and risk tolerance.

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