Money is a feminist issue — and yet, women are still reluctant to talk about it. According to a recent Bustle survey of more than 1,000 Millennial women, more than 50 percent of people said they never discuss personal finances with friends, even though 28 percent reported feeling stressed out about money every single day. Bustle's Get Money series gets real about what Millennial women are doing with their money, and why — because managing your finances should feel empowering, not intimidating.
You probably often hear about the importance of investing, but don't exactly know what it means. Or where to start. While some people learn about investing from their parents or in school, others know nothing about investing. Do you automate it? Listen to tips from friends and family? Hire a financial advisor? And do you have to do it? Luckily,
it's never too late to learn about investing, and to start doing it. After all, no one's going to do it for you (well, perhaps your parents or an advisor, but you know what I mean).
"The first thing you can do is ask yourself what you're trying to accomplish,"
Chrissy Celaya, CFP® a Financial Planning Expert and CFP Supervisor at Betterment, tells Bustle. "Everything should be tied back to a specific goal and objectives. It helps you to curate what you're trying to do, it sets the tone for what type of investment, what type of account, and what level of risk you'd like to take. Having a goal to tie everything back to overtime helps to motivate you and keep you on track. So sitting down and having a conversation and thinking about what your goals are is step one."
Want more investing tips? Below, you'll find 28
experts who offer their best investing advice.
Find An Expert To Help You
Of course, you cannot expect to invest today and be super rich tomorrow. But it's a nice thought, right? However, the reality is, investing requires patience. "I would say as soon as you and whoever you're working with have created a strategy and set goals, stick with it," Celaya says. "So I think a lot of people get started and they notice that their portfolio has gone down in value or maybe it hasn't gone up as quickly as they expected it to. That's OK, that's normal. You've got to remember that investing, in theory, is for the long-term. So you want to make sure you stick with whatever plan you lay out and don't make changes to it too frequently."
Make Sure You Get An Asset That Pays You
Invest In Securities And Properties
When it comes to what you should invest in,
John Barnes, CFP®, My Family Life Insurance, believes in investing in securities and properties. "Make net worth enhancement a priority," he tells Bustle. "Far too many people are sinking money into expensive rental apartments, cars, eating out, etc., because everyone else is doing it. However, invest in securities and properties, which will increase your net worth overtime."
Dana Bull, a Boston-based realtor with Harborside Sotheby's International Realty, has some advice, as well. "When investing in real estate, timing is everything," she tells Bustle. "I've scored some the best deals for myself and clients when placing offers at unusual times — for example, after a giant snow storm or over Memorial Day weekend. When other people are too busy to make a move, that's when you should pounce. Furthermore, from a financial perspective, most people purchase a home to build equity and to capitalize on appreciation. But what about cash flow? Real estate can also be used as an income-producing asset. Many of my clients are getting creative and using their homes to bring in additional income. For instance, most of my young buyers have a roommate (their best friend) paying rent, others have finished out portions of their home for Airbnb purposes, and some live in a multi-family and occupy one unit while leasing out the rest. Regarding resale, when analyzing properties, it's important to have a game plan for both the short-term and long-term. Are there ways to unlock value, either by updating cosmetics or adding square footage? These sorts of upgrades can amplify your investment when it's time to move on... whether that time is two years down the road or 10."
Get Educated About Money Matters
You may be savvy regarding investing, or you may not be. Or, you may be somewhere in the middle. In any case, now's the time to learn all about it. "Those who have a greater knowledge of finance tend to be more involved in the details of their personal finances like keeping track of expenses, budgeting, and investing,"
Leslie H. Tayne, Esq., Founder of Tayne Law Group, P.C., a debt solutions law firm, tells Bustle. "There are tons of blogs, articles, podcasts, and online resources out there to help you with everyday money and banking matters. Consider setting the home page of your computer to a finance website as a great way for you to keep your interest of improving your financial education top of mind!" Kimmie Greene, Consumer Finance Expert at Mint, is also a fan of doing research on money, particularly investing. "Before dipping your toes in the investing world, make sure you read up on the subject," she tells Bustle. "There are plenty of resources, websites, and books available to help you learn the ropes and reach your investing goals. Barron's Next is a good place to start for those new to investing."
Automate Your Investments
I'm sure you know all about automation in terms of
your savings account, but it's just as essential as far as investing goes. "Have a portion — even the smallest amount counts — of your paycheck autodrafted to go directly into funding a 401(k) or an IRA," Tim Stewart, Head of Business Development at HD Vest Financial Services and TaxAct, tells Bustle. "If you don't see the money 'go into your wallet,' it won't be as hard to 'watch it go out' into your savings or investing tools."
Invest 10 Percent Of Your Salary In A Simple Balanced Fund
You likely already know
the importance of saving a percentage of your salary — for retirement, an emergency fund, a fun fund, and so on. But how you are saving it is just as important. "Save 10 percent of your salary, and don't change that," Barnes says. "The 10 percent savings rule is often overlooked, most times disregarded, but incredibly impactful if people can stick to it for their career. For example, if a 35-year-old makes $75,000, saves $7,500 per year, and invests this money in a simple balanced fund earning, on average, eight percent per year, they could amass over $900,000 by retirement age of 66. This number assumes no additional increases to salary, COLA adjustments, promotions, or company matches and contributions. It is an incredibly impactful way to set oneself up for retirement. Doing so becomes automatic."
Put Money In Mutual Funds
Remember how I mentioned patience above? This is a good example of having some, and maintaining it. "Put your money in some mutual funds, like index funds, and leave it alone,"
Benjamin Glaser, Features Editor with DealNews, tells Bustle. "These low-risk options don't have the highest returns, especially in the short-term; but, over time — like multiple decades — they frequently outperform the stock market as a whole, as well as heavily managed funds run by so-called experts. So even if your dad wants you to invest with the same guy or company he's used for generations, do your research first." Katharine Perry, Associate Financial Consultant at Fort Pitt Capital Group, agrees. "One way Millennials can start investing is with mutual funds, because they offer better diversification for a smaller amount of money," she tells Bustle. "If you buy an individual stock, you are only investing in that company. If you buy a mutual fund that owns a hundred different companies, you get exposure to each of those companies. Most mutual funds have a minimum dollar amount, typically around $2,500, which is usually a good place to start. However, you can start with any amount — something is better than nothing. To really get a solid piece of the fund or whatever you're investing in, you need to put in some capital. To diversify an actual stock portfolio, it takes a couple hundred thousand dollars, that's why, with a mutual fund, you can invest a couple thousand dollars and still get a piece of a diversified portfolio for less money. Look for mutual funds that are focused on long-term growth. For Millennials, investing for retirement is going to be a longer-term plan, so you don't want something that is going to be a short-term play."
If you can match any of your employer contributions, it's another great — and smart — way to invest in your future. "Consider contributing to your 401(k) or 403(b) at work, especially if your employer offers to match a percentage of your contribution," Brainard says. "Investing early on with even a small amount per month can make a big difference in the long-term."
Michelle McKinnon, CFP®, senior wealth advisor at Payne Capital Management, and host of the $mart Women podcast, agrees. "Invest in your 401(k), particularly if you have a match — it's free money," she tells Bustle.
Contribute Money To A Diversified Investment Strategy Instead Of To Status Symbols
Although it may be tempting to buy that brand-name purse or car,
Ian Atkins, analyst and staff writer for Fit Small Business, advises against it. "Savings are greater than status symbols, he tells Bustle. "Almost every status symbol you'll ever spend money on (cars, jewelry, watches, etc.) will depreciate quickly in both their dollar value and their value as a status symbol. Instead of blowing money on status symbols, contribute the money to a diversified investment strategy and let it grow. Choose a higher net worth over a status symbol any day."
Use Computerized Investing
Some people are more into computerized investing, and here's why. "Try computerized investing,"
Liz Weston, Personal Finance Columnist and CFP®, NerdWallet, tells Bustle. "Target date retirement funds do all the heavy lifting for us by setting asset allocations, rebalancing so those allocations don't get too far out of whack, and gradually transitioning to a more conservative mix as retirement gets closer. Most 401(k)s and other workplace plans now offer these funds, and you can get them for your IRAs from brokerages and mutual fund companies. Or you can use robo-advisors such as Betterment, Wealthfront, Schwab Intelligent Portfolios, or Vanguard Personal Advisor Services."
Greene recommends robo-advisors, too. "Looking to start investing, but don't have a lump sum of savings? Robo-advisor apps like Acorns, Betterment, and WealthFront could be a good fit for you," she says. "With no minimum deposit amount required, you can start investing as soon as you download the app and set up your account. Keep an eye out for advanced features — like Round Ups, which round your transactions up to the nearest dollar, and invest the difference — when deciding which app is right for you."
Don't Pick Individual Stocks
Yes, individual stocks may be tempting, but may not best the best decision down the line. "Try to stay away from picking individual stocks — that runs risks similar to gambling," McKinnon says. "Make sure you are investing with low-cost investments — ETFs and low-cost mutual funds."
Invest In Higher-Risk Areas While You Are Young
Yes, you may be more interested in investing in higher-risk areas, and that is OK, says Glaser — at least, to an extent. "It is a good idea to invest in higher-risk areas when you are younger, and gradually transition to a low-risk portfolio," Glaser says. "Higher-risk means higher potential rewards, and if things go wrong, you still have a lot of time to correct. But higher-risk means high-yield stocks and bonds, not loaning money to volatile businesses or trying your hand at venture capital."
What do you do with dividends you receive? If the answer is reinvest them,
Joanna Leng, Financial Advisor, agrees with you. "I receive dividends from investments monthly or quarterly, but instead of using them, I always choose the option of reinvesting them," she tells Bustle. "Not only do I not incur fees for reinvesting, but, over the years, the compounding effect makes you feel wonderful for what you have done: money earning money for you."
Perry believes in reinvesting dividends, too. "Reinvesting dividends is important," she says. "When you're investing in a mutual fund, the companies in the fund can pay dividends to the shareholder. Anytime you receive a dividend you don't want to take the cash from that return, you want to reinvest the dividends to give you the total return over time."
Buy Low-Cost, Exchange-Traded Funds
As you probably know, there are all kinds of stocks out there. "I like to buy low-cost, exchange-traded funds that allow me to invest in a wide range of stocks, as well as government and investment-grade corporate bonds,"
Jennifer Barrett, Chief Education Officer at Acorns and Editor-in-Chief of Grow, tells Bustle. "I only own about a dozen individual stocks. I look at what's happening in the market every day. But I don't day trade. I buy and hold, and I keep most of my money in funds that mirror major indexes like the S&P 500. Over time, index funds have consistently outperformed the majority of actively managed funds — and they're much less expensive, too, so you're keeping more of your returns."
Impact investing is what it sounds like. "With impact investing, each person can reflect the things they care about and support the changes she wants to see in the world,"
Joshua Levin, Co-Founder of OpenInvest, tells Bustle. "Sometimes that means hand-selecting companies that are making positive contributions, and it can also mean divesting from companies you determine to be unethical. There's a misconception that impact investing means making financial sacrifices. But, in fact, it's quite the opposite. There is now extensive research showing that socially responsible investing tends to provide the same or better returns than traditional investing. As opposed to giving to charities (which is great), the power of impact investing is that you can make a real difference, while you also can make money. This means you can have an impact over and over again while you also plan and save for your financial future. It's OK to make money but also make a difference!"
Plus, if you're already an investor, OpenInvest's free Portfolio Lens tool will give you a snapshot of any red flags in your portfolio in five seconds.
Use An IRA If You Don't Have A 401(k)
Not everyone works 9-to-5 jobs anymore, not to mention ones that offer 401(k)s. So then what can — should — you do? "Some employers make you wait to participate in a 401(k), and some employers don't offer one,"
Arielle O'Shea, Investing and Retirement Specialist at NerdWallet, tells Bustle. "If you're stringing together a few different part-time jobs to create a full-time income, you're also unlikely to have access to an employer plan. So you have to take things into your own hands: If you're in a waiting period before you can participate, or you don't have a 401(k), use an IRA — a retirement account you can open on your own, at any broker — to fill the gap. That way, if you're later offered a 401(k), you can switch your contributions there without feeling like it's a huge sacrifice."
Watch Out For High Fees From Advisors
Sometimes, investing in great causes can cost you more. "Green is good, but it also provides an opportunity for companies to charge you higher prices," Levin says. "Most green mutual funds, for example, charge 1-2 percent in annual fees! Online advisors will often quote a certain price, but then surprise you with hidden underlying fees, such as ETF and mutual fund 'expense ratios.' Only work with someone who provides a single, transparent, low price. OpenInvest, for example, only charges 0.50 percent annually — nothing more."
Like many things in life, when you purchase something is key. "Remember, it is all about the long-term, so the next 10-20 percent correction we get in the market, take advantage by buying (remember buy low, sell high)," McKinnon says.
Begin Investing With Your Very First Paycheck
Perhaps your new job has a 401(k) you can contribute to, but you don't see the point. Well, change your mind, says O'Shea. "Get into the habit of saving that very first paycheck — even a short delay means adjusting to a lower paycheck if you decide to start contributing to a 401(k) later," she says.
"If you sit out of saving for retirement beginning with your very first paycheck, you get used to a certain amount of spending money and it's very hard to later make the decision to give up some of that money so you can save for retirement. If, on the other hand, you start saving with that first paycheck, you get used to the idea of saving. You never had that money to begin with, so it doesn't feel like as much of a sacrifice. It took me several years to finally start saving, because I didn't want to cut into my spending to do so."
Start Small (For As Little As $5)
If you think you need a of money to invest, think again. "There is no set amount of money that you need to invest,"
Ed Robinson, President and Co-Founder of Stash, tells Bustle. "If you aren't comfortable investing, start small, with as little as $5, and learn as you go."
Before Investing, Pay Off Any High-Interest Debt
Should you invest if you have debt?
Sallie Krawcheck , CEO and Co-Founder of Ellevest, weighs in on the topic. "Before you even think about investing, make sure to pay off any high-interest rate debt, like credit card debt," she tells Bustle. "Once that's eliminated and you're ready to start investing, there are three key things to keep in mind: 1). Choose a firm that's a fiduciary (they are obligated by law to act in your best interest), is run by experienced professionals, and charges fees lower than 1 percent. 2) Get invested in a low-cost, diversified investment portfolio. 3) Make investing a good habit. Invest a little of every paycheck — routine investing over time in every type of market climate is the best way to 'play' the long game."
If You Get A Raise, Pretend You Didn’t And Invest It Instead
I know, you might have read this heading and been confused, like whaaaaat?! But it makes sense, I swear. "Figure out how much you need to save monthly with a
retirement savings calculator, and then work your way up," O'Shea says. "That way, you don't feel like you're losing money to savings, because you're saving money you never had. If you get a raise, increase your 401(k) orIRA contribution by that amount, or half that amount."
If you think you need to constantly monitor your investments — and who has the time? — think again. "If you're investing for your retirement, develop the 'set it and forget it' mindset," Robinson says. "Investing for the long-term requires a mentality where you aren't constantly worrying about the day-to-day market. While you should be aware of your investments, you shouldn't be checking your investments on a daily basis if you're in it for the long haul."
Figure Out Your Investing Timeline
Before you invest, think about when you will need the fruits of your investing labor.
Georgia Lee Hussey, President and Founder, Modernist Financial, a female-run RIA that helps creative people and promising entrepreneurs structure their wealth around their values through financial life planning and investment management, elaborates. "Clarify the time horizon for your investments," she tells Bustle. "Need the money in 30 years? Take as much risk as you can (this usually means buying mostly equities aka stocks). Need the money in five years? Take almost no risk (this usually means cash, CDs, or a very low duration bond fund). If you do the opposite of these rules, you're actually taking a huge amount of risk that most people can't afford (inflation in the long-term, volatility in the short-term)."
Build A Diversified Portfolio
Of course, you likely want to, and should, invest in a variety of assets. "No two portfolios are alike, and yours will change over time," Robinson says. "Build a diversified portfolio that's tailored to your risk level and goals."
Invest In Things You Know
You probably hear it a lot in life, how it's all about who you know. When it comes to investing,
Matt Reiner, CFA, CFP®, CEO and co-founder of Wela, believes it's all about the companies you know. "Invest in things you know and interact with," he tells Bustle. "Look at places you buy goods and services from, as well as applications you use, and buy those companies. You're helping yourself with your investments when you buy the products and you understand the business."
Have Investing Rules — And Follow Them
Without rules, where would you and I be? Of course, there are also rules to follow when it comes to money. "Try to set some rules upfront so you can minimize the impulse to make very human, but ultimately bad, investment decisions," Hussey says. "For example, decide what you will do when the market dips. Invest more? Do nothing? Those are your best bets. We believe that investing should be boring. Trying to time the market is exciting and dramatic, which is a good signal that it's a bad idea (research shows that it is)."
OK, now that you learned all of the above, is your head swimming with investing options, or do you feel relieved? When in doubt, remember that you can always find someone to help you juggle the investing landscape. "Despite my criticism of managed investment funds, you should still hire a certified financial planner and develop a long-term relationship with them," Glaser says. "These professionals can help you actually carry out the goals you set for yourself, like managing risk in your investments, or they can help you form those goals in the first place. A CFP does more than just advise on your investment portfolio — they can also help with estate planning, college saving, and more. You might only talk to them once a year, or when you have a major life change like a marriage or child, but it will definitely help keep your financial plan on track."
Glaser's advice sounds good to me, and I wish everyone much investing success!
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