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Funding Your Future

A Beginner’s Guide to Investing

Tired of missing out on the investing game? Or afraid you’re already behind in your retirement saving, even though you’ve just started your career? Whether your interest is driven by curiosity or the desire to plan for the future, there are plenty of ways to start investing.

Where do you get the money?

When you invest through your 401(k) or other employer-sponsored savings, the money comes out of your before-tax pay. You tell your employer how much to take from each check — and as a bonus, they might match your contribution. For example, you put in 3 percent and they match it, dollar for dollar, up to another 3 percent. Other money to invest on your own might come from savings, gifts, tax refunds, bonuses, inheritance, or any excess cash after you pay your bills.

How much do you need to invest?

Usually, there’s no minimum to invest in your 401(k). Once your employer opens the account and you start contributing, you’re on your way. You may need $500 or more to open a brokerage account, but some online investment sites will let you invest as little as $5.

Many happy returns

You can save for whatever goals you set for yourself. It just takes planning, dedication, and practice. Although it’s not always easy to stick to, follow these guidelines to maximize your success:

  • Invest as much as possible: Aim for 10 percent of your income, increasing your contributions by 5-10 percent each year.
  • Invest over many decades: Plan to grow your money for 20, 30, or 40 years.
  • Diversify and choose a variety of investments: Selecting 5-10 investment categories reduces the risk of investing in just one type of stock. Categories vary and include stocks and bonds, government and corporate, varying industries, small and large, U.S. and international, etc.
  • Adjust your risk: Take a more aggressive — but still comfortable — approach when you’re younger and progressively shift to safer investments as you near retirement.
  • Minimize fees and taxes: Choose low-cost or fee-only brokers. Seek out funds with low expense ratios. The less you pay in fees and taxes, the more potential your money will have to grow.

Set your goal

At the beginning of your career, 10 percent of your income might seem impossible. But if you’re making $40,000 a year, that’s $4,000, which is $333 per month or $167 per bi-weekly paycheck. If you have the money automatically transferred to your 401(k) or other investment account before it hits your bank, you might not even miss it. And you get an added boost if your employer matches your contributions. If you want to get to 10 percent of your income and your employer matches up to 3 percent, then you only have to contribute 7 percent. This sacrifice early in your career can pay off big time later on.

Ready to invest?

Ask your employer’s human resources department about how you can contribute to your 401(k) or similar plan. If you don’t have an account at work, research investment brokerages, including online advisors and investment apps. Remember, investing doesn’t have to be a wild roller coaster ride. With some planning, you can earn healthy returns over time with modest effort and potentially attractive rewards. For more on getting smart about your money, visit

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