227 National Financial Literacy Month - Day 20 -Intricacies of The Stock Market & You

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Like many things in life if you do not study, research, or experience things, it can be intimidating and yes, experience is the best teacher. Investing in stocks can be intimidating if you have never done it before and do not expect overnight success when it comes to investing in the stock market.

One must be risk-averse when it comes to investing in the stock market. But you will most certainly know people who’ve become incredibly prosperous, or even rich, by doing it but they likely did so over the course of the long run.

You will never increase and grow your money by keeping it in a savings account, money responds to movement in the stock market, it is dynamic and if you want to outpace inflation you will need investments that yield more than inflation rates during this inflationary cycle.

Different Types of Stock Investment Platforms:

1. Online Brokers/Apps people can use (discount brokers)
2. Traditional Investment Advisors (investment management professionals)
3. Robo-Advisors (similar to investment management professional/less fees)

Hire a financial advisor and stockbroker, brokerage firm to assist you with investing in the stock market:

You have a choice to make, perhaps start with a robo-advisor since they spread your money across several different ETFs, then provide full portfolio management for you. All you need to do is fund your account.

If you are new to investing in the stock market, after starting out with a robo-advisor, consider starting an account with an online broker. The idea is to use the robo-advisor as your primary investment vehicle, while gradually transitioning into self-directed investing.

Give consideration to splitting your investments between a taxable brokerage account, and a tax-sheltered account. The taxable account can be used to invest for intermediate goals, like purchasing a house. The retirement account provides tax-deferred investment income, that will enable your portfolio to grow more quickly.

It is important to keep debt to a minimum. Why? The interest you pay on debt is often higher than what you can earn on your investments. It will do little good to invest money at 10%, while you’re paying 20% or more on credit cards. Work to become debt-free.