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How to Plan for Your First Investment

Let’s talk about how you can plan for your first investment, whether you go solo or team up with a financial advisor.

Investing money for the first time is a big step in any person’s life. Like any new beginning, it can bring up a lot of emotions, from sheer excitement and hope to crippling fear and doubt. All of this is natural, but if you don’t let these emotions overwhelm you on your journey to financial security, great things can come to life. 

We brought up the emotional side of your first investment because this step should not be done in a hurry due to excitement, and you shouldn’t give it up because of fear and doubt, either. If you’re reading this article, you probably desire to achieve your financial independence, and you know that when it comes to financing, you should always have a plan.

Where Do You Stand Financially 

Before you start researching investments, you should analyze your current financial situation. This doesn’t mean that you need to have a lot of money to start investing. That is a common misconception. Why do people invest money? To make more money, to have a safety net when things get tough, or to leave a financial legacy to their family, etc. 

So, where do you stand financially at this point in your life? If you get by from one paycheck to the next, then you should focus on putting some money aside for your first investment. But keep in mind that you should also have an emergency fund in place, aside from saving money for your investments. 

If you already have an emergency fund, you need to start saving money for your first investment. You don’t need to save a lot of money to invest; you can start by investing your first $100 and grow from there. So if you don’t have a great financial situation, which is ok by the way, not all of us have been blessed with a lot of cash, start putting aside a few bucks each month until you reach a certain amount that you will dedicate for investments.

Should You Plan Your First Investment Alone or with a Financial Advisor?

If you’re worried about investing alone, especially if you’re a beginner, know this is completely normal. The truth is most people don’t have a solid financial education, and investing for the first time can be scary. You don’t know if you’re taking the right steps or choosing the best investment for your needs and goals. Although investing is not like gambling, you can also lose money, and that is a risk you should consider.

So if you decide to make your first investment alone, try to play on the safe side. Don’t invest all your savings at once. It’s better to start with a small amount in the beginning. Wait and see how your investment is doing. You’ll learn a lot of things while going through this process. Once you get more familiar with investments, you can start investing more money.

On the other hand, working with a financial advisor or a financial planner has a lot of benefits. A professional can analyze your financial situation and present you with the best options for your case. Whenever you have doubts or questions about your investment, you will get answers and advice from someone who dedicated their time to helping people make more money. 

Paying for a financial advisor might not seem like the right move if you’re a beginner with a limited amount of money. But think of this as part of your first investment. You invest money in receiving the help of a financial planner, so they can help you make more informed decisions regarding your finances. A professional can give you great investment tricks that you can use for many years to come. 

Options as You Plan Your First Investment

If you decided to invest alone, here are a few investment options to start with:

Stock market investments

If you want to make your first investment in the stock market, know that you can do this even if you don’t have professional help. You can use an investment app, like Public. With this app, you can invest any amount of money, and you don’t have to pay a commission fee on trades.

Investing through Robo-Advisors

Computer-powered financial advisors are a great option for beginners. A Robo-Advisor like Wealthfront will help you build an investment portfolio even if you don’t have any knowledge about investments. All you need to do is answer a few questions, and the Robo-Advisor will give you examples of investments that you can start putting your money into. The minimum amount you can invest is $500 with a management fee of 0.25%.

Real Estate investments

Consider real estate as you plan your first investment. The great news is that you don’t necessarily have to buy a whole property to make your first real estate investment. You can use real estate crowdfunding platforms to buy a portion of a property together with other investors. You will share the responsibilities with other people while having a secure piece of the investment. Before you take this step, you should learn about real estate tips so you’ll be prepared for managing the ups and downs of this type of investment. 

Keep in mind that although making your first investment can be scary at first, it will bring you one step closer to a more secure financial future. Know the basics of investing and proceed with courage while keeping yourself informed along the way.

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