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Should you start investing?

  Should you start investing? The answer to that question is complex and unique for every situation, but if you're looking to grow wealth, then the answer is likely some form of yes.


 Being a successful investor requires patience. For many that start investing, they jump into stocks like GameStop, AMC, or crypto and expect to be instant millionaires. While that has happened before, that style of investing is dangerous and will likely cause you to lose some money in the long run. Everyone can get lucky once, but should you invest? First You need to figure out if you even have enough money to invest at all before you start dumping money into the stock market, crypto or other accounts. You'll want to evaluate whether you can pay your monthly bills, have an emergency fund of sorts, or have any high interest debt. If you can pay your bills, have a little money saved up for emergencies, and don't have any high interest debt like credit cards, then you should probably start investing any leftover money that you have. This way you can protect your money from inflation. Here, however, if you can't pay your bills, don't have an emergency fund, or have high interest debt, you need to focus on figuring those things out first. Building an emergency fund and paying your bills are safeguards to keeping financial stressors out of your life. Paying off high interest debt is important because it's costing you more money than you would make investing. If you have credit card debt, you're probably paying somewhere in the range of 25% a year on that money. That's a lot as far as investments go. Investors generally expect anywhere from 5 to 15% return on their portfolios each year, and that means if you invest the money you could have used to pay off that debt, you're actually losing money, even if your investments make money on paper. With that said, notice that I'm saying high interest debt. Generally you can make more money investing than you'd lose through low interest debt with a rate less than about 5%. Of course, this isn't investment advice, and if being debt free helps reduce your stress and helps you spend less than take that route as well, each situation is different. Just note that it isn't always advantageous to pay off low interest debt like Dave Ramsey or others recommend it can be. But each situation is unique. So if you've got all of that taken care of, the answer to should I start investing? Is probably yes if you don't really know how to invest or even what the stock market. Is. Take a look at our others articles on that topic for help here. The best path to start is generally going to be investing in indexes or long term growth opportunities. You might also consider investing in ETFs, which are explained in our other articles here. Don't expect to make millions overnight. Invest a little consistently, don't touch it for a long time and your money will likely grow and grow.   


  

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