One of the best ways to build wealth is to invest and to do so early. Not quite sure how to get started? Well, let’s say you have an extra $1,000 to spend. First, is your emergency fund stocked with at least six months worth of salary? If not, put the $1,000 in that account. If the $1,000 is truly spendable, check out some ways to invest it instead.
The big plus of Roth IRAs is that there are no taxes for contributions or withdrawals in retirement. No taxes means the Roth IRA offers plenty of room for big-time growth. Put your money in stocks that have a strong probability of growing quickly, or target date funds at least 10 years out. Just remember to contribute to the account each month. Then sit back and watch the account balance grow.
A mutual fund is basically a collection of stocks, and they typically require at least $1,000 to get rolling. If you don’t quite have $1,000, US News reports that there are some cheaper mutual funds options available at places like T. Rowe Price and Vanguard. When investing in mutual funds, do research on management fees and commissions so you’re not getting taken for a ride.
ETFs are similar to mutual funds, but usually have lower fees. Look into online firms like ETrade or Fidelity to get started on ETFs. You’ll likely be surprised by how little you need. Sometimes you can invest as little as $10. This makes ETFs a great option for the beginner investor.