Investments are nothing new: for as long as there have been currencies, there have been people interested in investing money. The purpose of investing money is to make money, but one crucial trait you’ll need to succeed in investing is patience. For most investors, the pay-off isn’t seen for several months, or possibly for several years. And there may be some losses along the way. But if you stick to it, and are patient and persistent in keeping up with the stock market and spreading your funds around to both low-risk and high-risk investments, you will see a return on the money you put in.
One of the simplest ways to get started with investing is to ask your employer about a 401k plan. A 401k is a special type of retirement plan that was implemented by the government in 1978. How the plan works is simple: employers team up with employees to fund a retirement account. Of course, some employers may not contribute a lot, if anything at all; but you can contribute as much as you want to this plan. The money you contribute doesn’t count as your taxable income, and if your employer contributes, you’ll earn even more. Plus there’s interest to be earned on the saved money, and you can invest some or all of it into the stock market for a further return on your money.
Then there’s investment banking, which experts like CEO John Ferraro of Ernst & Young are all too familiar with. In investment banking, you take your funds to an investment banker, and together you’ll check out the stock market and decide where to put your money. Generally good investments include technology and infrastructure, and the medical fields. But sometimes it pays to fund small and high-risk startups, because if they take off, your return on what they make will be great.
When investing, know that it takes money to earn money. While as little as $500 can get you started with a decently growing 401k plan, if you’re going to invest directly into the stock market, you’re going to want to have several thousand — or preferably tens of thousands — of dollars to play with. But you’ll find this out quickly enough by working with an investment banker.
Of course, you can invest on your own, but this requires close monitoring of the stock markets, and being able to make quick decisions on whether or not to invest in a particular start-up, or if you should pull your funds and move elsewhere.
Investing money has the potential to grow quite a nest egg for retirement, so the earlier you start, the better. Many employees are starting 401k plans and other retirement funds not long after they leave college. While it may seem weird to think about retirement when you’ve barely gotten started in the workforce, the truth is the sooner you start planning for the future, the more likely it is that you’ll have a decent amount of money to live off of once the future arrives.